A layoff can be unlawful even when no one involved meant to discriminate. If a reduction in force (RIF) removes older workers, women, or members of a particular racial group at a noticeably higher rate, a former employee can bring a disparate impact claim based largely on the numbers. The best protection is planning. A workplace discrimination defense attorney can help you set objective selection criteria, review the results under attorney-client privilege, and prepare the required notices before anyone is told their job is ending.

What Is Disparate Impact in a Layoff?

Disparate impact occurs when a neutral rule or practice harms a protected group significantly more than others. Unlike a disparate treatment claim, it does not require proof of intent. Under Title VII, once an employee shows an adverse impact, the employer must demonstrate that the practice is job-related and consistent with business necessity. The employee can still prevail by pointing to a less discriminatory alternative the employer chose not to use.

Age is where layoffs most often run into trouble. In Smith v. City of Jackson (2005), the U.S. Supreme Court held that disparate impact claims are available under the Age Discrimination in Employment Act (ADEA). Then, in Meacham v. Knolls Atomic Power Laboratory (2008), a RIF case involving manager ratings of “flexibility” and “criticality,” the Court ruled that the employer must prove its layoff factor was a reasonable factor other than age.

California adds another layer. The Fair Employment and Housing Act (FEHA) covers employers with five or more employees and protects workers who are 40 and older, so small Santa Cruz County businesses are not exempt. For a closer look at these claims, see our guide to age discrimination defense under the ADEA and FEHA.

Which Layoff Selection Criteria Carry the Most Risk?

Several common criteria look neutral on paper but track protected characteristics closely:

• Salary or cost savings. Cutting the highest earners often removes the longest-tenured and oldest employees. California Government Code § 12941 warns that using salary as a basis for termination can amount to age discrimination if it adversely affects older workers as a group.

• Subjective ratings. Labels such as “adaptability,” “culture fit,” or “future potential” invite challenge when no written definition exists.

• Uncalibrated manager scores. One supervisor’s recent rankings, with no cross-check against other reviewers or earlier review cycles, are hard to defend.

• Attendance counts. Absences tied to CFRA leave, pregnancy, or disability should not be counted against anyone.

• Automated or AI scoring tools. California Civil Rights Council regulations on automated-decision systems took effect October 1, 2025, and apply FEHA’s anti-discrimination rules to these tools.

Criteria that tend to hold up better include the elimination of a defined position or function, documented skills tied to the work that remains, and performance history measured across several review cycles.

Consider a Scotts Valley software company cutting 12 of its 60 employees. Managers rank engineers on “growth mindset,” and most of those selected are over 50. Without a written definition of that phrase and evidence linking it to the work ahead, the company will struggle to explain the results. A stronger approach lists the specific skills the product roadmap requires and scores every engineer against that same written standard.

How Can Employers Test a RIF for Adverse Impact?

Run an adverse impact analysis before any notices go out. The usual starting point is the four-fifths rule from the federal Uniform Guidelines. If a protected group’s retention rate is less than 80 percent of the rate for the most favored group, that is generally treated as evidence of adverse impact. Larger RIFs typically add statistical significance testing.

• Define the decisional unit with care. This is the pool you actually selected from, such as a department or job family, and it drives every comparison.

• Test every draft list, not only the final one, so you can revisit criteria that skew the results.

• Have counsel direct the analysis. Keeping draft numbers within the attorney-client privilege helps protect them from discovery if a claim follows.

Notice and Documentation Requirements

Three documents deserve attention before a layoff is announced:

• OWBPA disclosures. To obtain a valid release of federal age claims in a group layoff, employees 40 and older must receive 45 days to consider the agreement, 7 days to revoke it, and a list of the job titles and ages of those selected and not selected in the decisional unit. Plaintiffs’ lawyers often read that list first. Our guide to severance negotiation during layoffs and RIFs explains how it fits into the broader process.

• Cal-WARN notice. Covered establishments with 75 or more employees generally must give 60 days’ notice before laying off 50 or more workers within a 30-day period. Since January 1, 2026, SB 617 requires added content, including CalFresh information and local workforce board contacts. Our California WARN Act overview covers the details.

• A written business rationale. Prepare it before selections are made, explaining why the RIF is happening and how each criterion serves that goal.

Mistakes That Weaken a RIF Defense

Even a well-designed plan can unravel in execution. These errors appear repeatedly in layoff litigation:

• Changing the criteria after seeing who they affect

• Manager emails about wanting “fresh energy” or “digital natives”

• Selecting someone who recently complained or took protected leave without a separate review, which can add a retaliation claim

• Rehiring for an “eliminated” role within a few months

Talk to a Workplace Discrimination Defense Attorney Before the List Is Final

A RIF is one of the few employment decisions you can plan weeks or months in advance, which makes most disparate impact claims preventable. A workplace discrimination defense attorney can help you choose defensible criteria, run a privileged impact analysis, and prepare OWBPA and Cal-WARN documents that withstand scrutiny. If a claim has already been filed, see how employers build a strong workplace discrimination defense.

The employer defense team at Brereton, Mohamed, & Korte LLP advises Santa Cruz County businesses on layoffs, severance, and discrimination claims. Call 831-429-6391 to speak with an employment defense lawyer before your RIF plan is final.

Read More: Layoff Selection Criteria and Disparate Impact: Defending RIF Decisions in California

Frequently Asked Questions

Can a layoff be discriminatory if no one intended to discriminate?
Yes. Disparate impact claims focus on results, not motive. If neutral criteria remove a protected group at a significantly higher rate and the employer cannot justify them as job-related and necessary, the layoff can still create liability.

Is it legal to lay off the highest-paid employees to save money?
Cost savings can be a legitimate goal, but salary is one of the riskiest criteria in California. Government Code § 12941 states that using salary as a termination basis may be age discrimination if it adversely affects older workers as a group, so run an impact analysis first.

What is the four-fifths rule in a layoff?
It is a screening test for adverse impact. You compare each protected group’s retention rate with the rate for the group retained most often. A ratio below 80 percent is generally treated as evidence of adverse impact and should prompt a closer look at your criteria.

Do we have to give OWBPA disclosures to every laid-off employee?
Only if you want a valid waiver of federal age claims from employees 40 and older in a group termination. Without the required disclosures and time periods, the release of ADEA claims is unenforceable even if the employee signs and accepts severance.

How long do laid-off employees have to file a discrimination claim in California?
Under FEHA, employees generally have three years to file a complaint with the California Civil Rights Department. For federal claims, the EEOC filing deadline in California is typically 300 days from the layoff.

Will a severance release fully protect us from disparate impact claims?
A properly drafted release can waive many claims, but not all. Employees keep the right to file charges with the EEOC or CRD, and a release that misses OWBPA requirements will not bar federal age claims.

When should we involve an employer defense attorney in a RIF?
Before you set selection criteria, ideally at least 90 days before notices go out. That leaves time for an impact analysis, revisions, and the 60-day Cal-WARN notice period if it applies.