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JPEsq, Lawyer
Category: Employment Law
Satisfied Customers: 5106
Experience:  Experience as both corporate in-house counsel and private counsel
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My company is laying off 4 people and the average age of these

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My company is laying off 4 people and the average age of these 4 employees is 55. The company has 25 employees with the average age of 43. The reason for the lay-off is a slow down in business. The selection of the affected employees is based on the performance, impact to the business, and skill sets. What should the company do to avoid litigation related to age discrimination. Thank you.

It sounds like the company has already covered its bases. For age discrimination purposes, anyone over 40 years old is in the category. So by the fact that the age of the unaffected workers is still in the category, that will help a lot. Of course, this assumes you are not giving me an average that is misleading (like they are all 25 and 1 60 year old manager, dragging the average up).


Also, and more importantly, if the cuts are based on performance, even if the unaffected employees were 25, it wouldn't matter. You are allowed to terminate older employees, as long as it is not motivated by age discrimination. You have a valid reason here, so there should be no issue. This may not stop them from filing an EEOC charge, but it will keep them from winning.

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Customer: replied 4 years ago.

Sorry but I would like to follow up with more details and another question: In term of the age of the unaffected employees 11 of us are between 34 and 43 year old and 10 of us are 44 or older.


If the 4 affected employees decide to sue the company for age discrimination what would be the liability for my company (i.e. how much would they would sue us for?)


Thank you.

Like I said, I don't think there would be any liability, give that the lay-offs are based on performance.


The employees can't just sue you, they would have to file an EEOC charge of employment discrimination first. The EEOC investigates the charge and attempts to resolve it. Eventually, a right to sue letter is issued- this does not mean that the EEOC thinks they have a valid claim, it just means that they are done with it.


Read here:


The vast majority of the time, the EEOC charges die there, and the employees realize there is no case. The process can take a long time, years sometimes.

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Customer: replied 4 years ago.

Do you mean that the EEOC investigation can take a long time? Will the EEOC give any indication to the employee and employer if the charge is legitimate during or after the process? Do you think many lawyers would be willing to work with our 4 employees on a commision-based fee in this situation?


Customer: replied 4 years ago.

I would also like to know what kind of advantages my company has as a small business in this type of law suits (e.g. is it true that small companies with less than 50 employees are not subject to some EEOC requirements?).

The Age Discrimination in Employment Act (ADEA) applies to all employers of at least 20. So it would apply here, and the EEOC would enforce it, if it were applicable.


Yes, I meant the EEOC process can take a long time. But plaintiffs can opt out of the process and demand a right to sue letter at any time (though that is not very common).


As I mentioned, if there is a meritorious defense (such as the lay offs being based on performance) it would be hard for them to win. Discrimination cases are actually very difficult, despite the fact that many disgruntled employees file charges, few actually win.


The EEOC will give an indication of whether the charges have legitimacy, usually by their actions. If they won't pursue it, it means the charges are weak.

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Customer: replied 4 years ago.

I have a couple more questions if you don't mind:


1. You said EEOC would investigate the charge and attempt to resolve it: does it mean that EEOC would try to work with both employee and employer to settle the charge (e.g. asking the employer to pay some compensation to the employee?)


2. If the employee chooses to opt out of the EEOC process then they can get the right to sue letter and go to court at anytime?


3. When I said my company selects some of the affected employees based on performance I meant their performance ratings were lower than other people in the same group. It does not mean that these employees were having serious issues with their performance nor they are being placed in the performance improvement plan. Would this be OK for my company then?


4. The company also selects some other employees because eliminating their positions does the least impact to the company business (their contribution to the botXXXXX XXXXXne is minimum and/or other people can do their job while they don't have the required skills to do other people's job). Would this also be a legitimate business reason for lay-off?

1. Not necessarily. The EEOC has a mediation process, but it is only used when there seems to be some legitimacy. Some people are basically told to go away. It really depends on the merits of the charge.


2. Yes, that's right.


3. That leaves more room for argument. In the scenario you described, the affected employees could easily make the argument that they were given lower ratings (ie, they were treated differently) based on their age. I thought you meant there were verifiable numbers such as sales numbers. In the scenario you described, the company would be better off if there was some quantifiable criteria, rather than just subjective performance reviews.


4. Yes.


Also, keep in mind that just because the individuals all happen to be older doesn't automatically give rise to a claim. In all of the lay offs in the U.S. over the course of a year, just the odds dictate that many of those would only effect certain groups. Usually, to win a discrimination case, the employees would need something more than just the fact that they were fired and they were older. They would need some evidence of motive, like comments from management about age.

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Customer: replied 4 years ago.

I have one more question: If the employee already accepted the severance package and signed the separation agreement, but still files a complaint for age discrimination with the EEOC then will my company be protected against this claim because he already signed the release (the separation agreement includes the release that the employee would waive all claims against the company)?

No, but you would have a breach of contract claim.
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