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There is a Proper Way to Issue Severance for Reduction in Force Situations, Says Chicago Employment Lawyer

There is a right way and a wrong way to issue severances. Employers need to follow a strict protocol or run afoul of the law.

To avoid a charge of ageism, or age discrimination, there are rules a company needs to follow if their reorganization or consolidation process ends up affecting older workers. An older worker may well feel he is losing his job because of his age and that management chose to reorganize to have the chance to let him go,” said Timothy Coffey, a Chicago employment lawyer and principal attorney for The Coffey Law Office, P. C., an employment litigation firm dedicated to representing employees in the workplace.

If a company has its head on straight, they will structure any layoffs or reduction in their workforce by approaching it strictly in a business-like manner, clearly outlining the reasons for all changes and/or the blending of positions. They need to also be able to demonstrate why another worker was given the new position, based on qualifications,” Coffey said.

If someone in a company makes off-the-cuff remarks about age, it would be harder for them to prove that age was not a determining factor in letting an older worker go. A case in point is Duffy v. Belk, Inc., No. 11-1757, 4th Cir., 2012, where a 63-year-old customer relationship manager was re-organized out of a job.

What happened in this case is that the store merged his job with the job of company vice president and then offered the newly creation position to the woman currently holding the VP job. The lady was 43-years-old. Although the man was offered other jobs, he turned them down for two reasons: they did not pay what he was used to making, and they were lesser-ranked jobs. He sued the company, alleging he should have been offered the new position and that he did not get it because of age discrimination,” Coffey said.

When the case got to court, the process the furniture company had used to reduce their workforce was explained in great detail. It involved combining common job functions and reducing duplication in the workplace. The woman was offered the newly blended job, as she had an MBA and credible job experience in an area where the company wanted to expand in the future.

There had been no criticism of older workers in the workplace, remarks made about bringing in younger blood or any other incidents that indicated to the court that they were antagonistic towards older managers. The court discharged the man’s case.

However, this case could just as easily have gone the other way, with a win for the plaintiff, if there had been any indications of age discrimination. If employers want to treat their employees fairly when it comes to reorganizing or reducing their workforce, they need to have every step and reason carefully documented,” said Coffey.

Timothy J. Coffey is a Chicago employment lawyer with, and owner of, The Coffey Law Office, P.C., a Chicago employment litigation firm. To learn more, visit