LITIGATION AND DISCOVERY STRATEGIES
IN "DOWNSIZING" CASES:
A PLAINTIFF'S PERSPECTIVE

by: Ellen J. Messing and Jeremy P. Cattani
Messing, Rudavsky & Weliky, P.C.

I. HOW TO ANALYZE "RIF" CASES

A. INTRODUCTION

Reduction in force ("RIF"), or downsizing, is a defense frequently offered by defendants in discrimination cases. While it is typically asserted in age discrimination cases, this defense arises in other discrimination contexts as well. See Resare v. Raytheon Co., 981 F.2d 32 (1st Cir. 1992) (sex discrimination); White v. Michaud Bus Lines, 19 MDLR 18 (1997) (sex and pregnancy discrimination).

There is a three-stage process followed when bringing and defending so-called "disparate treatment" discrimination cases under Massachusetts and federal law. First, the plaintiff makes out a prima facie case by showing that s/he is a member of a protected class; that s/he was qualified for the position held; that s/he experienced adverse employment action; and that her/his position was filled by a person who is not a member of the protected class. If the employee establishes a prima facie case, there is a presumption that the employer engaged in unlawful discrimination. The second stage requires the employer to rebut the plaintiff's presumption by articulating a legitimate, non-discriminatory reason for its action. See generally Thomas v. Eastman Kodak Co., 183 F.3d 38, 56 (1st Cir. 1999); Blare v. Husky Injection Molding Systems Boston, Inc., 419 Mass. 437, 441-42, 646 N.E.2d 111, 115 (1995), and cases cited therein. Once the employer has proffered such a reason, the presumption disappears. At the third stage, the plaintiff has the burden of proving that the reason advanced by the employer for the adverse employment action was a pretext for unlawful discrimination, by showing that the employer's proffered reasons are untrue. Proof of pretext allows, but does not require, the plaintiff to prevail. Abramian v. President & Fellows of Harvard College, 432 Mass. 107, 117-18, 731 N.E.2d 1075, 1085 (2000); Thomas, supra, at 57-58.

In RIF cases, the first three elements of the plaintiff's prima facie case are essentially the same as in other discrimination cases. However, the fourth prong is different. In RIF cases, the plaintiff must establish that the employer did not treat her/his membership in a protected class neutrally, or that employees who were not members of the plaintiff's protected class were retained in the same position. Hebert v. Mohawk Rubber Co., 872 F.2d 1104, 1111 (1st Cir. 1989); Crossman and Havener v. S. Bent & Brothers, Inc., 10 MDLR 1452 (1988), 13 MDLR 2047, 2057 (1991) (full commission adopted RIF prima facie case set forth in Hebert in affirming hearing commissioner decision), aff'd sub nom S. Bent & Brothers, Inc. v. Havener, 1994 WL 879972 (Mass. Super. Ct.1994).

At the third stage of proof, after the employer has asserted downsizing as (at least one of) its reason(s) for its action, the plaintiff must be able to show that the employer's assertion(s) are pretextual. What follows is a brief summary of some strategies for making such a showing.

B. PROOF OF PRETEXT

1. Don't Try to Challenge the RIF Itself

In attempting to prove pretext, the plaintiff's attorney should focus on the selection of the plaintiff for downsizing, rather than whether or not the employer should have reduced the size and/or scope of its operations. It will likely be fruitless to argue that the employer did not really need to lay people off, or that the company was not really losing money. Courts are reluctant "to second-guess the business decisions of an employer." LeBlanc v. Great American Ins. Co., 6 F.3d 836, 846 (1st Cir. 1993) (court could "imagine perfectly legitimate considerations" supporting defendant's hire of employees in one region shortly before eliminating plaintiff's position in another region) (citing Petitti v. New England Tel. & Tel. Co., 909 F.2d 28, 31 (1st Cir. 1990)). But cf. White v. Michaud Bus Lines, 19 MDLR 18 (1997) (respondent's failure to provide evidence that corporate financial situation necessitated downsizing as alleged evidences pretext). Instead, the plaintiff should focus on evidence tending to show that the inclusion of the plaintiff was based on pretextual reasons.

2. Comments

As in most discrimination cases, bigoted comments by individuals with management authority over the relevant decisions can constitute circumstantial evidence that bias was a factor in the challenged decisions. See Kelley v. Airborne Freight Corp., 140 F.3d 335, 347-48 (1st Cir. 1998) (supervisors stated that "age would be considered as a factor in selecting employees for termination" in a RIF and that it was a "good time" to eliminate "some of the older mediocre managers"); Woodman v. Haemonetics Corp., 51 F.3d 1087 (1st Cir. 1995) (statement by plaintiff's supervisor that upper management "want[ed] younger people here" supported plaintiff's age discrimination claim); Crossman and Havener, supra (management consultant commented at plaintiff's exit interview, "you're all alike, you have some [medical] excuse or other"); Resare v. Raytheon Co., 981 F.2d 32 (1st Cir. 1992) (manager's disparaging and sexist remarks, including comments about the anatomy of various female employees, could support plaintiff's claim that sex discrimination led to decision to RIF her).

3. Statistics

Of course, the plaintiff's attorney should look closely at the demographics of who was laid off and who was retained. See Hebert, supra (fact that 13 out of 17 employees selected for discharge were members of protected class provides grounds to reverse summary judgment against plaintiff); Crossman and Havener, supra (eight of nine employees terminated on same day as part of reduction in force were members of protected class); McMullin v. Bull, HN Information Systems, 16 MDLR 1427 (1994), aff'd 17 MDLR 1218 (1995) (all three employees laid off in complainant's department were within statutorily protected age group).

Note that when comparisons between the retention and separation rates of white, male, and younger managers and those of minorities, women, and older workers differ by more than 20 percent, the Uniform Guidelines of Employee Selection Procedures, 29 C.F.R. §1607, require the employer to justify the process under "business necessity"standards of anti-discrimination laws. See Blumrosen, supra, at 11 and 17-18.

4. Manipulation of Process

The plaintiff's attorney should seek information about the employer's selection procedures and decision-making processes through discovery, and look for evidence that the employer did not follow its procedures. Specifically, the plaintiff's attorney should look for evidence:

• that there was no real "downsizing" - in reality, the plaintiff was replaced (see Crossman and Havener, supra (finding "primary functions" of complainant's job assumed by younger employee, despite respondent's argument that complainant's job was eliminated));
  
  
• that purportedly neutral performance ratings were somehow manipulated to the plaintiff's detriment (see Thomas, supra, at 62-65 (plaintiff set forth evidence of racial bias in defendant's manipulation of her performance evaluation scores));
  
  
• that younger employees were transferred to do plaintiff's work shortly before the RIF (see Hebert, supra (younger employee hired as plaintiff's assistant approximately three months before plaintiff's termination told she was "hired specifically to replace plaintiff")); and
  
  
• that the "layoff" terminology disguised what was actually a firing for which the employer had inadequate grounds, as in the cases where there was a "layoff of one" (see White, supra).

Some practitioners suggest hiring an industrial relations or human resources expert to analyze and testify regarding the process used in selecting employees for layoff, and whether it is truly neutral as claimed.

5. Timing

The timing of negative employment actions can be used to establish pretext. See Woodman, supra (negative performance evaluation given five days before RIF supported inference of pretext): Crossman and Havener, supra (complainant established pretext where only two written reprimands issued to him in 37 years of employment with respondent were issued by individual participating in respondent's "reorganization committee").

6. Subjectivity of Decision-Making Criteria

Look for theoretically objective grounds for selection of employees to be RIFed that in fact allow for managers' subjective discretion. Cf. Baker v. Winchester School Committee, 13 MDLR 2026 (1991), aff'd, 14 MDLR 1160 (1992) (criticism of female assistant principal's "manner" in dealing with the public is pretext, where same subjective criterion not equally applied to men); Madden v. Town of Falmouth Harbormaster Waterway Dept., 15 MDLR 1949 (1993), aff'd, 17 MDLR 1593 (1995) (subjective, unsubstantiated "demeanor" criticisms of female applicant for nontraditional job manifested sex discrimination).

7. "Phony" Reasons Cited by Employer

As in any discrimination case, obtain the employer's reasons for terminating the plaintiff under oath (i.e., through interrogatory and/or deposition), and seek to show the falsity of the stated reasons.

8. Uncover the Involuntary Nature of Early Retirement "Offers"

Offers of early retirement may not be genuine, and if not may represent a pretext for an age-motivated discharge. Hebert, supra (employer's offer of a choice between early retirement with benefits or discharge without benefits is not analyzed as an early retirement issue, but as a discharge). But see Vega v. Kodak Caribbean, Ltd., 3 F.3d 476 (1st Cir. 1993) (mere offers for early retirement, even those with attractive incentives, do not violate ADEA).

2. SPECIAL ISSUE OF PROOF: STEREOTYPING

Many statements of bias evince open hostility toward the target group, and are thus readily recognizable as direct evidence of discriminatory animus. However, certain statements that are not openly hostile are less readily recognizable as discriminatory. Yet even subtle generalizations about target groups may be used as powerful evidence that the group status of a plaintiff-employee was considered when an employer instituted a RIF.

Recognizing that the Supreme Court had long recognized that unlawful discrimination can stem from stereotypes and other cognitive biases, as well as conscious animus, the First Circuit has reiterated that "the disparate treatment doctrine focuses on causality rather than conscious motivations, since 'unwitting or ingrained bias is no less injurious or worthy of eradication than blatant or calculated discrimination.' " Thomas, supra, at 60 (citing Hopkins v. Price Waterhouse, 825 F.2d 458, 469 (D.C. Cir. 1987), aff'd, Price Waterhouse v. Hopkins, 490 U.S. 228, 109 S.Ct. 1775 (1989)). The First Circuit further stated:

The concept of "stereotyping" includes not only simple beliefs such as 'women are not aggressive' but also a host of more subtle cognitive phenomena which can skew perceptions and judgments. Price Waterhouse highlighted one such phenomenon: the tendency of "unique" employees (that is, single employees belonging to a protected class, such as a single female or a single minority in the pool of employees) to be evaluated more harshly in a subjective evaluation process.... Other types of biased thinking are also widely recognized.

Thomas, supra, at 61 (citations omitted). See also Eldred v. Consoldiated Freightways Corp. of Del., 898 F.Supp 928, 934 (D. Mass. 1995) (employer's assertions that plaintiff lacked "aggressiveness" and was too "soft" supported "unavoidable conclusion" that plaintiff was passed over for promotion because of her gender).

The MCAD recognizes evidence of stereotyping, recently adopting the First Circuit's analysis of stereotyping in Johnson v. Econolodge of Sturbridge, MCAD Docket No. 96-BPA-3908, slip op. at 15-16 (Mar. 14, 2001) (citing Thomas) (unlawful discrimination where respondent hotel owner motivated by racial stereotyping denied hotel room to complainant). See also Wilder v. Diamond Cab Co., MCAD Docket No. 97-SPA-0789 (Feb. 23, 2001) (taxicab driver's statement that "you people don't like to pay" demonstrated "discomfort rooted in racial stereotypes and bias," for which taxi company was liable); Madden v. Town of Falmouth Harbormaster Waterway Dept., 15 MDLR 1949 (1993) aff'd, 17 MDLR 1593 (1995) (female complainant awarded $194,000 plus interest where respondent's failure to hire complainant for "non-traditional" position of deputy harbor master was based on gender stereotyping).

In addition to statements by decision-makers, the plaintiff's attorney should also look for expressions of classic age stereotypes in performance evaluations as evidence of unlawful bias.

Some practitioners suggest that the plaintiff retain an expert to tap the subjectivity of the employer's selection process, which is what typically leads to bias. Others note that one important role of an expert on stereotyping is to help disabuse jurors of what they believe is "common sense," but may itself be grounded in stereotyping. Additionally, if the decision-maker (or other evidence) says the plaintiff was "rigid" or "not aggressive", "not on cutting edge," etc., you may wish to retain an expert who can testify that such statements are classic age-based stereotyping.

3. DISCOVERY ISSUES IN RIF CASES [4]

Certain discovery issues are common to most, if not all, RIF cases, as outlined below.

A. DISCOVERY TO ESTABLISH "BASELINE"

Defendants seek to prove that their RIF process was neutral and fair. To succeed, plaintiffs need to challenge those assertions. The first step is to ask for (1) a complete list of the layoff criteria applicable to the work group (or larger group; see §(C) below) in which the plaintiff worked, and (2) a full description of procedures used to select employees for layoff. As discussed below, you can then test the criteria for subjectivity, hidden stereotyping, etc.; and you can test the procedures for fairness, fitness to the task, and thoroughness. (If the criteria are fair, appropriate, and thorough, you can then determine if defendants complied with them.) But the first step is to insist, via interrogatories and document requests, that defendants fully set forth the applicable criteria and procedures. Be alert for documents that suggest that the criteria or procedures are different from what defendants now assert - it's amazing how often this occurs!

Depending on your theory of the case, the next step may be depositions (Rule 30(b)(6) depositions may be necessary) of the company's human resources or other officials who designed and/or applied these criteria and procedures.

To establish this baseline, for example, the excerpts from the sales case document requests (attached as Attachment A) sought all documents specifically constituting or relating to RIF policies and procedures, including draft and final lists of employees selected for layoff (Request 9); all handbooks or policies regarding selection of employees for layoff, transfer, reassignment, promotion, or demotion (Request 14); all documents setting forth the criteria used to evaluate the company's salespeople (Request 23); and all documents regarding the company's decision to eliminate our client's department (Request 26).

The excerpts from interrogatories from the sales case (attached as Attachment B) sought the identification of the individuals involved in the decision to lay off employees (Interrogatories 7(i), 8(i), and 9(i)), as well as the specific criteria supposedly used for selection of employees to lay off (Interrogatories 7(j), 8(j), and 9(j)). Interrogatory 27 sought information specifically regarding the company's decision to eliminate our client's department.

Answers to these discovery requests begin to establish the respondent's "baseline" against which we could then compare what actually happened to our client.

B. PERSONNEL FILES OF CO-WORKERS AND OTHER COMPARATIVE DATA

RIF cases put a premium on comparative evidence. Since a genuine RIF, by definition, is a single employer action affecting a number of individuals, it provides an ideal laboratory for the comparative analysis necessary to proof of disparate treatment of a particular plaintiff. Thus, plaintiffs' lawyers need to pursue actively any and all information that helps prove that the plaintiff more closely resembles those staffers retained along the dimensions cited by the employer as relevant to the RIF selection process, such as type of job held, performance evaluation ratings history, disciplinary history, skills possessed, training completed, etc. The best initial source for such information is comparators' personnel files, followed by depositions of the decision-makers highlighting the similarities between your client and the people retained by the company. Plaintiffs' attorneys will likely have to fight to get these, but it is worth it. See, e.g., Barbee v. Boston College School of Nursing, MCAD Docket No. 97-BEM-2972 (decision of investigating commissioner Feb. 20, 2001) (granting probable cause for complainant where respondent refused to disclose comparator tenure data) (copy attached as Attachment E). N.B.: One Massachusetts court has recently held that a plaintiff seeking comparators' personnel files is not required to make the "particularized showing of relevance" required by federal case law. Dalessio v. Mass. Mutual Life Ins. Co., No. 00-0070 (Hampden Cty. (Mass) Super. Ct. Aug. 16, 2000) (order on plaintiff's motion to compel production of documents) (copy attached as Attachment F) (rejecting reasoning of Whittingham v. Amherst College, 164 F.R.D. 124, (D. Mass. 1995) (personnel files of alleged comparators not discoverable, absent showing that they were similarly situated to plaintiff)).

In our document request from the sales case (Attachment A), we were seeking to show that the work history of our client, a salesperson, was superior to those of retained colleagues who were male. Thus, in Request 8, we sought the personnel files of her comparators; in Request 21, we sought comparative sales performance data for our client and her comparators; Request 25 sought documents related to the sales performance of our client and her comparators; Request 28 sought documents related to the selection of comparators, but not our client, for a company award; and Request 31 sought documents relating to the availability of positions with the employer, as well as the employer's consideration of employees for placement in those positions.

In Attachment B, from the same case, the interrogatories sought various comparative data illustrating the different treatment of the plaintiff versus her colleagues, including the identification of employees selected for company awards (Interrogatory 15), as well as the individuals involved in the selection of individuals for such awards (Interrogatory 14); the compensation of each individual from complainant's department (Interrogatory 21), and the compensation each such individual earned both within that department (Interrogatory 19) and outside that department (Interrogatory 20).

In the engineering case, our document request (Attachment D) explicitly defined the term "personnel file" (Definition P), and sought the personnel files of several individuals whom we had previously identified as comparators (Request 3).

C. COMPANY-WIDE COMPARATIVE DATA

Plaintiffs' attorneys need to figure out how broadly to define the group of people who should appropriately be compared with the plaintiff for purposes of analyzing the company's justifications for the plaintiff's selection. If there is a company-wide (or site-wide, or department-wide, or whatever unit you think appropriate) RIF, then you should be able to compel the production of documents concerning the entire unit.

Defendants typically resist, often successfully, broad requests for records, on the grounds that requests seek privileged information, are unduly burdensome, are invasive of corporate and/or employees' privacy, or are not reasonably calculated to lead to the discovery of admissible evidence. See, e.g., Mack v. Great Atlantic & Pacific Tea Co., 871 F.2d 179, 186 (1st Cir. 1989) (plaintiff not entitled to discover data on broad range of job classifications or job sites in case challenging her selection for RIF, since she failed to show a connection between her circumstances and those classifications and sites). On the other hand, courts do award broad access to data about the company as a whole, or a broadly-defined unit within it, if the plaintiff is challenging a company-wide policy as discriminatory. See Dalessio, supra (court ordered production of corporate affirmative action plans, executive development and succession plans, severance agreements, and a summary of an employee survey regarding equal employment opportunities).

Similarly, in Afrow v. Cumberland Farms, Inc., 1996 WL 1185115 (Mass. Super. 1996), the court compelled production of information regarding other complaints of discrimination and other discharges by the company, even those not implicating the decision-maker in plaintiff's case, because they tended to show the existence of an overall discriminatory climate at the company. (However, such discovery was limited only to the company site where plaintiff worked.)

Turning to our discovery samples, in the sales case, we sought detailed information about every company RIF to begin to define the appropriate group of comparators. Thus, we asked separate interrogatories (see Attachment B) to seek information about each RIF: for the company as a whole (Interrogatory 6); within our client's department (Interrogatory 7); for each department within the company (Interrogatory 8); and for each of the company's regions (Interrogatory 9).

Further seeking to broaden the ranks of appropriate comparators, Interrogatory 31 sought information regarding every open sales position within the company, as well as the identification of the individual(s) hired for each position and the decision-makers involved in each hire, at the relevant times. Similarly, assuming a company-wide comparator group, our document requests (see Attachment A) sought the production of all documents regarding any comparisons between employees conducted by respondents (Request 17).

In the engineering case, we were seeking to show that work appropriate for our client was actually available elsewhere in the company, whether or not within his immediate work unit. Thus, in our interrogatories (see Attachment C), we sought information about the employer's other available engineering projects on a company-wide basis (Interrogatories 1-5), and further sought information identifying, and tracking the work assignments of, all engineers assigned to each such project (Interrogatories 4(h), 5(h), and 6-8). In the same case, our document requests (Attachment D) sought lists that ranked engineers anywhere in the company by their perceived value to the company (Request 6).

[1] The authors highly recommend two excellent overview articles, from which a number of the themes in this article are borrowed: Alfred W. Blumrosen et al., Downsizing - Employee Rights or Employer Prerogative?, 2 Employee Rts. and Employ. Pol'y J. 1 (1998); and Laurie A. McCann, The ADEA: Overcoming the Downsizing Defense and Other Employer Tactics, (Proceedings of NELA 1999 Tenth Annual Convention, New Orleans, LA.), June 30 - July 3, 1999, at 1124.

[2] Disparate treatment cases generally involve situations where an employer "purposefully uses race, color, religion, sex, or national origin as the determinative factor in employment decisions." School Comm. of Braintree v. MCAD, 377 Mass. 424, 428, 386 N.E.2d 1251 (1979). Disparate impact analysis involves employment practices that are facially neutral in their treatment of different groups, but in fact fall more harshly on one group than another. Id. at 429, 386 N.E.2d 1251. Disparate impact analysis is less frequently available in RIF cases. While the First Circuit does not permit disparate impact analysis for age discrimination cases brought under the ADEA, Mullin v. Raytheon Co., 164 F.3d 696 (1st Cir. 1999) (speculating that the SJC would follow First Circuit precedent), disparate impact claims of age discrimination have been brought in Massachusetts courts. See, e.g., MacAlpine v. Digital Equipment Corp., 1998 WL 184184 (Mass. Super. 1998) (denying defendant's motion of summary judgment as to plaintiff's disparate impact age discrimination claim). Moreover, in observing without comment in Blare v. Husky Injection Molding Systems Boston, Inc., 419 Mass. 437, 646 N.E.2d 111 (1995), that the case was a disparate treatment age discrimination case rather than a disparate impact case, the SJC has suggested that disparate impact claims in age cases are viable in Massachusetts courts. Blare, supra, at 439, 646 N.E.2d at 114, n.3.

[3] For excellent insights into the law regarding the use of stereotypes as direct evidence and the retention of expert witnesses in stereotyping, respectively, see Kent Spriggs, Representing Plaintiffs in Title VII Actions , §25.03 [2] and §17.03 [3] [g] (Panel Publishers, 1998).

[4] The attached discovery samples are from RIF cases where we challenged selection criteria, including one case where the employer utilized a purportedly objective, "scientific" selection process (the "sales case," where we sought to prove the company's process was entirely subjective and based on the managers' selection of favorites to retain based on their own biases) and another where the defendant asserted inadequate quantities of available work (the "engineering case," where we sought to demonstrate that projects were available, but were assigned to a favored group of younger employees).