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Ex-Employees Can Challenge Statistical Impact of Reductions in Force

    Client Alerts
  • June 19, 2019

On occasion, employers defending lawsuits filed by their employees raise questions over the legal validity of what most attorneys consider to be settled law. A good example comes from a recent decision by the U.S. Court of Appeals for the District of Columbia Circuit. The case discusses whether corporate reductions in force (RIF) can be challenged under Title VII based on the statistical disparity of the layoff selections on employees in a protected category.

In Davis v. District of Columbia, District workers impacted by an RIF to reduce costs filed suit, claiming that the layoff selections had a disparate impact against African-American employees. The defendant obtained summary judgment on the basis that the portion of Title VII that allows disparate impact claims requires that the plaintiffs challenge a specific employment practice that resulted in the statistical disparity. The district court concluded that an RIF is not an employment practice in and of itself.

In a 2-1 decision, the D.C. Circuit reversed this decision, finding no basis under Title VII for excluding RIFs from disparate impact challenges. Multiple federal courts have found that cutting back on the workforce involves a selection procedure that falls within the definition of an employment practice. It is the selection process and not the mere fact that an RIF occurs that forms the legal basis for the claim.

The dissenting judge did not dispute this conclusion but thought that the plaintiffs’ claims were not properly before the court. Although involving a very original legal argument, this decision confirms the necessity of conducting an analysis of the effects of layoff decisions on employees based on race, age, gender, and other protected classifications.