10.18.2012

Using “Subjective Criteria” During Employee Layoffs

The Sixth Circuit recently held that using subjective criteria — such as whether an employee is a “team player” — during layoffs does not by itself show discrimination.

In Beck v. Buckeye Pipeline Services Co., No. 11-3655 (6th Cir. Sept. 28, 2012), the employer assembled a group of company leaders as part of a “design team” to reform the company’s organizational structure. The team developed a new structure promoting decentralized, team-based leadership rather than top-down control. It then evaluated company employees based upon their ability to succeed in the new environment. The team considered criteria such as whether the employees were good listeners and communicators, willing to work in a team, and accepted accountability. It decided that the plaintiff, a fifty year-old female who had worked at the company for over sixteen years, was not a “team player” because she complained about the workplace, refused to fill-in for her coworkers, and was generally uncooperative. The employer fired the plaintiff, along with over a hundred other employees, as part of a company-wide reduction in force. The plaintiff was replaced with a younger, male employee with less experience.

The plaintiff sued her employer, alleging age and gender discrimination. She argued that the employer’s use of “subjective criteria” in selecting her for termination permitted the inference that she was singled out because of her age and gender. The court rejected this argument, noting that the use of subject criteria during layoffs deserves “careful scrutiny” but does not by itself show discrimination. Further, none of the criteria the employer used to evaluate employees, such as whether the employee was a “team-player,” discriminated on the basis of gender or age.

The court also rejected the plaintiff’s argument that her employer discriminated against her because the design team’s evaluation conflicted with the assessment of her immediate supervisor, who stated that the plaintiff was a good employee. The court noted that the supervisor said the same thing about all of his subordinates. Moreover, the company entrusted only the design team with deciding what qualities to require of employees under the new team-based system. The team was therefore entitled to disregard the supervisor’s opinion, which did not have an influence on the plaintiff’s evaluation.

This case offers several lessons for employers planning their own layoffs or reductions in force. Using subjective criteria in deciding which employees to terminate is lawful. Layoffs need not be based on objective criteria or “hard numbers,” such as the employees’ number of write-ups within the past year. However, employers using subjective criteria during layoffs must tread carefully. They should expect that a court will give the criteria “careful scrutiny” and be prepared to defend the criteria. Further, employers must consistently apply the criteria across their workforce. Finally, employers must ensure that the criteria do not affect protected groups at a disproportionately high rate.



Contact: Nathan Pangrace
216.615.4825
npangrace@ralaw.com

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