Common Sense Advice And Uncommon Legal Results
  1. Home
  2.  | 
  3. Covid-19
  4.  | A View From A Litigator and An Independent Investigator: Permissible Layoff Or Discriminatory Behavior? – How To Recognize It And How To Investigate It

A View From A Litigator and An Independent Investigator: Permissible Layoff Or Discriminatory Behavior? – How To Recognize It And How To Investigate It

| Jul 20, 2020 | Covid-19, Employment Law |

About The Authors

This blog post is jointly authored by attorney Christina Bucci Hamilton of Duggan McHugh Law Corporation and attorney Matthew Rose of Van Dermyden Maddux Law Corporation. Christina’s practice focuses on representing employers in litigation as well as with employment law advice and counsel. Matthew’s practice focuses on conducting workplace investigations for public and private employers.

Setting The Scene: Why Is This Topic Important Right Now?

California was easing into the third stage of Governor Gavin Newson’s four-stage plan to gradually reopen the state amid the COVID-19 pandemic. However, on Monday July 13, 2020, Governor Newsom issued directives requiring the re-closure of restaurants, movie theaters, family entertainment centers, wineries, zoos and bars for indoor service. Additional sectors were closed in 31 counties. For consumers, reopening was a step toward normalcy. Many employers, however, continue to reel from the economic impacts of COVID-19. To stay afloat in these turbulent times, businesses across the state have laid off workers in record numbers. The trend does not appear to be slowing. Some workers subjected to layoffs may accept losing their job as a natural and understandable consequence of the pandemic. Other laid off workers, however, may not be so accepting. They might feel like a target of illegal discrimination. The most recent directives may lead businesses who were on the brink to make further layoffs.

In part one of this blog post, Christina Bucci Hamilton discusses the differences between a legally permissible layoff and impermissible discriminatory behavior. In part two, Matthew Rose provides practical tips for workplace investigators tasked with investigating complaints of discriminatory behavior as a result of a layoff necessitated by COVID-19.

Part One: What Is A Layoff And How Can It Be Discriminatory?

There is no specific legal meaning of “layoff” under California law. However, it is commonly understood that an employee has been “laid off” when they are placed off work through no fault of their own. Typically, this occurs when an employer has closed, downsized, or no longer has enough work or funds to keep the employee. This makes a layoff distinct from retirement, quitting, or being terminated for cause. Some employers mistakenly believe that classifying an employee termination as a “layoff” reduces or eliminates the risk of litigation. However, even layoffs precipitated by the economic effects of a global pandemic can give rise to a claim of unlawful termination, as illustrated below.

Most employees in California work “at-will,” which means they can be laid off at any time, with or without notice, so long as the reason is not an illegal reason. An example of an unlawful termination is one that is based in whole or in substantial part on an employee’s membership in a protected class (for example, age, race, gender, or sex), or an employee’s participation in protected activity (for example, making a health and safety complaint, or taking protected leave). Consider these real-world possibilities:

  • Manny works in the sales department of a large construction team. The construction industry has remained open from the start of the pandemic because of its “essential” nature. During the last two months, Manny made two complaints to his supervisor about the lack of safety precautions taken by the company. Specifically, he complained because hand sanitizer was not provided at job sites. Then he complained because none of the office workers observed social distancing guidelines when they met in conference rooms. Manny believed both of these problems ran afoul of the County’s public health order. Last week, the company’s owner announced layoffs. Most of the layoffs applied to office support staff. However, Manny and his direct report were also laid off. The layoffs did not impact the company’s other 15 sales representatives, however, Manny and his subordinate’s sales numbers had been low in comparison to the rest of the team. Manny feels targeted for having lodged his two complaints.
  • Abigail retired from teaching elementary school at age 50. Afterwards, she began working at a large brewpub located downtown near the town’s university. During the last three months, the brewpub stayed afloat by offering curbside pickups for customers. In light of the re-closure order issued this week, the owner emailed all staff and announced she “had no choice” but to layoff some workers due to financial trouble. Abigail, as well as five other workers, all of whom are over 45 years old, were laid off. The employer stated that it chose who to layoff based on seniority, and Abigail is one of the brewpub’s newest hires. Abigail thinks the owner used COVID-19 as an opportunity to eliminate older workers.

Part Two: How Should Workplace Investigators Investigate These Kinds Of Discrimination Claims?

In our current climate, workplace investigators should not be surprised to see an uptick in claims from employees asserting they were terminated for illegal purposes under the disguise of a layoff necessitated by COVID-19. Determining motive is not easy in these types of complaints, so investigators must know how to conduct thorough and probing inquiries.

To do so, investigators must first fully understand the employer’s stated rationale for its layoff decisions. The investigator’s job, however, is not done there. The next critical step is to test that rationale to determine whether the stated reasons are the real reasons for the layoff.  While it is the investigator’s job to uncover this evidence, these same questions should be posed to the complainant – why does s/he believe the stated reasons were not the real reasons? To test the rationale, investigators must study the entire record and ask themselves whether the evidence suggests the employer acted with improper pretext, or whether the employer had legitimate, non-discriminatory reasons for the layoff decision.

For instance, were similarly-situated employees laid off, such as workers of similar racial or ethnic backgrounds or workers over the age of 45? Does the timing seem suspicious, such as layoffs being instituted soon after workers lodged COVID-related safety complaints or harassment complaints against management? Similarly, when notifying workers of the layoffs, did management provide false information meant to mislead workers?  Did the complainant’s supervisor make comments at the time of the layoff indicative of bias?  Does the complainant have a history of performance issues– documented or not?  Does the complainant, and perhaps others in the layoff group, have relatively low seniority status?  When was the decision made relative to any protected activity by the complainant?

To address these questions adequately, investigators must gather an array of evidence. Seek out documentary evidence, including emails and text messages. If management asserts the layoffs were necessitated by funding, for instance, obtain financial records to verify. Interview a variety of witnesses, including those not impacted by the layoffs. Try to determine whether other witnesses share the complainant’s suspicions. Only after the full picture comes into view can an investigator make sense of the allegations and determine whether to sustain the allegations.

Conclusion

Employment actions, including layoffs, will likely be subjected to increased scrutiny as California eases its way out of the lockdowns necessitated by COVID-19. Employers, employment lawyers, and workplace investigators must anticipate these changes to effectively do their jobs.