Employee Rights and Employment Policy Journal

The Rights of Employees Subjected to Reductions in Force: A Critical Evaluation
By
Parisis G. Filippatos and Sean Farhang

Abstract

In this article we set forth and evaluate the current regime of American employment law with respect to workers subjected to reductions in force ("RIFs") and suggest needed reforms. We first examine judicial elaboration of the anti-discrimination statutes with respect to disparate treatment and disparate impact claims brought by employees subjected to RIFs. While courts have broadly recognized an employee's right not to be treated discriminatorily in the context of a RIF, we find unfortunate departures in the RIF context from the standard frameworks of anti-discrimination analysis, all of which work to the disadvantage of employees and to the advantage of employers. We also highlight the extension of RIF doctrine in the anti-discrimination context from age discrimination cases where it has been most common in the past to other protected classifications such as race, gender, and disability. Second, we consider the law governing releases executed by employees of legal claims against their employers in exchange for severance and other benefits when terminated pursuant to a RIF. We conclude that the statutory release requirements enacted by Congress in the Older Workers Benefit Protection Act of 1990, as applied by the courts, provide far more robust protection to employee rights than the common law doctrines applied to the release of employment claims outside the age discrimination context. Third, we briefly review express and implied employment contract rights that have come into play in the RIF context and find that they provide protections only in narrow circumstances not applicable to most employees. Finally, we examine the rights provided by the Worker Adjustment and Retraining Notification Act of 1988, and conclude that the excessive number of exceptions and exemptions contained in the law, combined with deficient enforcement mechanisms, have hampered its efficacy. We suggest possible directions for statutory reform to address these problems.