Decision in Age Discrimination Case Provides RIF Guidance for Employers

A recent United States Court of Appeals for the Tenth Circuit decision in an age discrimination case provides valuable guidance for employers who are planning to terminate employees as part of a reduction in force (RIF), Cooley writes in a recent alert.

In Raymond v. Spirit AeroSystems Holdings, the plaintiffs, former employees of Spirit AeroSystems, alleged that they were selected for termination in a reduction in force due to their age—a violation of the Age Discrimination in Employment Act.

The court rejected the plaintiffs’ claims. It determined that the company did not implement its 2013 RIF with discriminatory intent, despite the fact that Spirit had concerns about its aging workforce. The RIF targeted 10% of the workforce at Spirit’s Wichita, Kansas plant.

According to Cooley, lawyers advising clients on workforce reduction should thoroughly document the business rationale for layoffs, establish clear and objective selection criteria, and carefully control both internal and external communications to mitigate potential discrimination claims.

To illustrate those points, Cooley cited examples of measures Spirit took prior to the RIF. The company explored multiple cost-saving strategies, including optimizing shifts, reducing management overhead, increasing performance-based terminations, and offering voluntary severance packages.

Ultimately, these measures proved insufficient in preventing the RIF, as Spirit’s viability was at stake.

Training decision-makers on proper workforce reduction and ensuring compliance with legal requirements, such as WARN Act and Age Discrimination Act disclosures, can also help prevent litigation.

The court also addressed the plaintiffs’ allegations that Spirit refused to rehire post-RIF workers, ultimately siding with the company due to a lack of substantive evidence supporting age discrimination.

Spirit’s victory underscores the necessity of planning, documentation, and strategic messaging when conducting workforce reductions.