January 13, 2023

Law360 Quotes Nick Reiter on Taking a Measured Approach to Layoffs and Avoiding Litigation

2 min

On December 7, 2022, Nick Reiter was quoted in Law360 in an article about recent high-profile mass layoffs amongst recession fears and the steps employers can take to protect themselves from future litigation.

According to the article, fear over a possible recession has led to high-profile mass layoffs or reductions. Some of the layoffs have spurred litigation within days of being announced, including lawsuits and arbitration demands lodged against employers by workers, many of whom claim they had virtually no notice of their dismissals.

In mass layoff situations, it isn't uncommon for some workers to challenge the basis for their layoff, with some employees asserting that they were picked for discriminatory or retaliatory reasons. According to Reiter, employees tend to become more litigious in tough economic times and are more likely to turn to federal regulators with complaints.

The U.S. Equal Employment Opportunity Commission in fiscal years 2009, 2010 and 2011 — the three years following the stock market crash of 2008 — received over 293,000 charges alleging unlawful workplace discrimination. In the three years leading up to the Great Recession, nearly 254,000 new charges were filed.

That increase in bias charges necessarily sets the table for a spike in enforcement activity by the EEOC during recessions, said Reiter. Because of that, employers should consider both the possibility of one-off employee lawsuits alleging bias in how they were selected for RIF, and broader cases or class actions in which the company is accused of having a policy that had a disproportionately negative effect on workers in a protected class. 

“They should conduct a disparate treatment analysis so that they, statistically speaking, ... [can project] who's going to be laid off, who isn't going to be laid off, and see if there are any statistical inferences to be drawn that suggests employees in a particular protected class are disproportionately selected for layoffs for one reason or the other," Reiter said.

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