Layoff Implementation May Be Challenged Under Title VII

​The D.C. Circuit Court of Appeals cautioned that an employer is not immunized from scrutiny under Title VII of the Civil Rights Act of 1964 simply because it asserts that the implementation of its layoffs were the result of a budget cut.

Faced with budget cuts, the District of Columbia Child and Family Services Agency implemented a reduction in force (RIF), which resulted in the termination of 115 employees. Ninety-three percent of those laid off were black employees. The brunt of the terminations occurred within the agency programs office, where two positions were eliminated: social worker associate and social service assistant.

The agency did not use uniform criteria nor a uniform test or requirement in determining whom to terminate, nor were the terminations based on the cost of employing certain workers, employee performance or proportional cuts across all departments. Instead, the layoffs were the result of individual, subjective decisions by the agency director, who worked with the chief of staff, deputy directors and senior-level managers to determine who would be laid off.

Forty-seven former employees filed suit against the agency, alleging violations of Title VII and a similar Washington, D.C., statute. Among other challenges, the former employees asserted a disparate impact challenge against the agency's elimination of job categories and positions that were held primarily by black employees. The agency's implementation of the layoff—targeting the social worker associate and social service assistant jobs for elimination and allowing managers to make subjective termination decisions—was the employment practice that was challenged.

The district court did not view a RIF as a particular employment practice subject to Title VII review, and it rejected all the claims brought by the former employees, reasoning that the employees failed to identify a specific employment practice that was actionable under the disparate impact theory of discrimination.

The D.C. Circuit was asked to decide whether the practices behind the implementation of a RIF are subject to Title VII's disparate impact review. The court saw no basis to exempt RIF implementation practices from Title VII scrutiny. The D.C. Circuit noted that other courts have applied Title VII in the RIF context, and those cases demonstrate how to analyze layoffs as a particular employment practice. The court noted that the disparate impact theory of discrimination exists to scrutinize an employer's targeting of demographically disproportionate departments for layoffs, because such a practice means that the likelihood of selecting a person in a protected class for layoff is significantly increased.

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The D.C. Circuit reversed the district court's decision regarding the plaintiffs' disparate impact claims and sent the case to the district court for further proceedings on the specific employment-practice issue. The appeals court reasoned that disparate impact analysis applies when the "object of the suit is an identifiable practice, criterion or bundle of criteria behind a specified employment event like the rash of contemporaneous layoffs challenged here."

The court also stated that an actionable specific employment practice could be a set of subjective criteria, as well as objective and standardized criteria. Here, the adverse employment practice was the layoff of a large group of employees in a short period of time. The D.C. Circuit found that the way in which the agency implemented the RIF was a particular practice subject to Title VII scrutiny. The court is clear in its decision: It does not hold that a RIF, in general, is a particular employment practice subject to Title VII review; instead, the process by which the RIF is implemented is subject to Title VII review.

Davis v. District of Columbia, D.C. Cir., No. 17-7071 (June 7, 2019).

Professional Pointer: This case is a reminder that the way in which a RIF is implemented should be carefully considered by the employer based on objective criteria that is justifiable. Employers should keep in mind that Title VII exists to scrutinize the process by which RIFs are implemented when the implementation targets demographically disproportionate departments. If a laid-off employee brings a Title VII challenge following a RIF, the plaintiff bears the initial burden of proving the discriminatory impact of the employment practice. But, once that is shown, the employer must show that the actions were reasonable and the result of business necessity. An employer will have difficulty prevailing using only subjective criteria.

Bryant S. Banes is an attorney with Neel, Hooper & Banes, P.C., the Worklaw® Network member firm in Houston.