To establish a prima facie case under the New Jersey Law Against Discrimination, a plaintiff must demonstrate that (1) they are a member of a protected group; (2) they were performing the job at a level that met the employer’s legitimate expectations; (3) an adverse employment action was taken against the employee; and (4) the challenged decision took place under circumstances that give rise to unlawful discrimination. See Williams v. Pemberton Twp. Pub. Schools, 323 N.J. Super. 490, 502 (App. Div. 1999). If the employee establishes a prima facie case, the burden of production shifts to the employer to establish a legitimate non-discriminatory reason for the adverse employment action. See Bergen Commercial Bank v. Sissler, 157 N.J. 188, 210 (1999). If a non-discriminatory basis is shown, the plaintiff must establish, by a preponderance of the evidence, that the alleged justification is a pretext for discrimination. See Zive v. Stanley Roberts, Inc., 182 N.J. 436, 449 (2005). However, it is important to understand how New Jersey courts analyze the employer’s “legitimate non-discriminatory” explanation for the termination in the context of a reduction in force.
Indeed, among the factors that courts analyze when reviewing whether an employee’s termination is the result of a “good faith” reduction in force are as follows: (1) whether the business reasons for the reduction in force and the anticipated economic savings thereform were adequately documented; (2) the number of employees or percentage of the company’s work force affected by the reduction in force; (3) the existence of adequately documented selection criteria and procedures for implementation of the reduction in force; (4) whether reduction in force decisions were made on the basis of objective job related criteria and procedures or by reference to the individuals occupying the affected positions; (5) whether reduction in force decisions were based on fair and objective performance evaluations of the affected employees; and (6) whether there was any consideration of alternatives to laying off employees to achieve the economic savings anticipated from the reduction in force, such as shortened work weeks or work days, temporary shutdowns, voluntary reverse seniority layoffs with partial-pay, work-sharing, reductions in authorized overtime, salary freezes or reductions, hiring freezes and/or early retirement incentive programs. See Leahey v. Singer Sewing, Co., 302 N.J Super. 68, 79-80 (Law Div. 1996).
Based on the foregoing, employers should consult with legal counsel prior to conducting a reduction in force. Likewise, affected employees should consult with legal counsel if they are subject to a reduction in force. If you have any questions about reductions in force and/or claims under the New Jersey Law Against Discrimination, please contact Curcio Mirzaian Sirot LLC.
* Frank A. Custode, Esq. is the Managing Partner and Chair of the Employment Practice at Curcio Mirzaian Sirot LLC.
