Is downsizing a defense for discriminatory termination of employment?

As one California court recently pointed out in Kelly v. Stamps.com Inc. (2005), downsizing alone is not necessarily a sufficient explanation, under the Fair Employment and Housing Act, for the consequent dismissal of a worker. An employer’s freedom to reduce its workforce and to eliminate positions in the process, does not mean that it may use the occasion to conveniently get rid of protected workers.

Invocation of a right to downsize does not resolve whether the employer had a discriminatory motive for cutting back its work force, or engaged in intentional discrimination when deciding which individual workers to retain and release. At least two facts were considered by court as casting serious doubt of discriminatory motive on the employer’s decision to terminated a pregnant employee, when the employer tried to argue that the reason for that termination was a reduction in force in the Stamps.com case: (1) the employee’s track of excellent performance; (2) hiring a new employee, who was not pregnant, instead of the terminated pregnant woman.

If you have been, or are about to, be laid off due to the alleged downsizing of your employer, but you suspect that the true reason for your termination might be discriminatory and has little to do with the downsizing itself, contact Arkady Itkin – San Francisco employment lawyer to discuss your situation at work.