Unequal or Unfair: Recognizing Discrimination in Company Layoffs

In today’s unpredictable economy, layoffs have become an unfortunate reality and a new norm for many workers.

However, as companies downsize, employers must be prudent in how these decisions are made—and employees should be all the more cognizant of why these decisions are made.

That’s because layoffs can sometimes be a front for illegal discrimination, and it's important to recognize the signs.

Below are key areas to watch for to ensure that layoffs are conducted fairly and without discrimination. 

However, if you believe you are a victim of workplace discrimination, contact Morgan & Morgan for a free case evaluation to learn more about your legal options. 

6 Signs of Discriminatory Layoffs

1. Disproportionate Impact on Protected Classes

If certain groups—whether based on age, race, gender, disability, or other protected characteristics—are disproportionately affected by layoffs, this could be a red flag. Even if the layoff policy seems neutral, it may have a discriminatory effect in practice, which can lead to claims of disparate impact discrimination.

 

2. Targeting Older Workers

Age discrimination is one of the most common issues during layoffs. If a significant number of older workers (those over 40) are targeted for termination while younger employees are spared, this could be a violation of the Age Discrimination in Employment Act (ADEA). Employers should be able to justify their decisions with legitimate, non-discriminatory reasons.

3. Gender or Racial Bias in Layoff Decisions

Similarly, watch for trends that show employees of a specific race or gender are being let go while others are retained. Employers must ensure that layoff decisions are based on performance, business necessity, or other non-discriminatory reasons, and not on the basis of someone’s race, gender, or ethnicity.

4. Retaliation Disguised as Layoffs

Employees who have recently filed complaints about discrimination, harassment, or wage violations are protected from retaliation. If someone who has made such complaints is suddenly included in a layoff, this could be a case of unlawful retaliation. Employers cannot use layoffs as a cover to retaliate against workers who have exercised their legal rights.

5. Lack of Clear Criteria

A common issue in layoffs is a lack of transparency or clearly defined criteria for making decisions. Employers should have clear, objective standards for determining who stays and who goes. If these criteria are vague or applied inconsistently, there may be grounds for suspicion that the layoffs are not being conducted fairly.

6. Offering Severance in Exchange for Waiving Legal Claims

Employers may offer severance packages that require employees to sign a waiver of any potential legal claims. While this is a common practice, employees should not feel pressured into signing these agreements without fully understanding their rights. Consulting with an attorney before agreeing to any severance terms is always a good idea, especially if there is concern about potential discrimination.

What You Can Do

Layoffs are difficult for everyone involved, but they should never be an excuse for discrimination. If you believe you’ve been unfairly targeted in a layoff due to discrimination, you have options. 

The first step is to document everything—keep records of who was laid off, who was retained, and any communications or documents related to the decision. Next, consider speaking with an attorney at Morgan & Morgan who specializes in employment law and discrimination cases. We can help you assess whether your layoff was lawful or if you have a potential case of discrimination.

As the nation’s largest personal injury law firm, Morgan & Morgan has the size, resources, and know-how to take on cases of any size, and with an army of over 1,000 trial-ready lawyers with offices in every state, there’s no bully too big for us to handle.

Hiring one of our lawyers is easy, and you can get started in minutes with a free case evaluation.