“We are sorry. Due to unforeseen circumstances caused by the current pandemic, we have to lay off x number of workers. While we can’t predict the specific duration, we expect the layoff to be temporary. It is our intent to recall all laid-off workers in the hopefully near future”.
Were you in this position on behalf of your company? Many companies had to lay off workers due to the pandemic. If you didn’t have to do so, you probably know someone who did.
Suppose this scenario later results in the following several months later: “We regret to inform you that, given the sustained impact of the pandemic-induced downturn, we are unable to recall you to your position at Company. Effective (insert date here) your employment with Company is hereby terminated”. Suppose this hypothetical company learns that one of the laid-off employees has sued on behalf of themselves and all others similarly situated (aka a class-action lawsuit), for age discrimination.
Wait. If a company takes a big hit from a pandemic-induced downturn and has to let go of workers, can that be age discrimination (or any type of discrimination)? How? Yes, it can be. Read on to see how… We have, as always (or usually) a real, live case example–just filed yesterday, as a matter of fact. The case is Penaloza v Kimberly Hotel, Inc. Here, in a nutshell, is what allegedly went down:
The Kimberly Hotel is a boutique hotel located in the heart of Manhattan, NY. Darci Fernandez Penaloza is 64 years old, and worked at the Kimberly as a housekeeper for 25 years. Ms. Penaloza received a letter from the hotel’s VP and General Manager on March 20, 2020 that she was being laid off from her job. On April 7, 2020, she received another notice that she was being laid off due to “unforeseen business circumstances prompted by the COVID-19 pandemic.”, that her layoff would be “temporary” but that the duration would be “impossible to predict” and that the hotel would “close temporarily”. In and of itself that type of occurrence was fairly common in March 2020 and not problematic legally.
The hotel re-opened in September 2020, but Ms. Penaloza was not recalled to her job. On November 10, 2020 Ms. Penaloza received another letter, advising her that she would not be recalled, that her “employment will terminate effective February 9, 2021”. The letter cited travel restrictions and lower hotel occupancy rates as the reason for her termination. This too would seem a very valid, plausible reason for a termination, but there’s more. The hotel terminated 30-40 other workers holding the same or similar positions (housekeepers, porters, dorrpersons, etc.) the majority of whom were over 40 years of age and had a significant amount of experience working at The Kimberly Hotel. The hotel again temporarily closed from December 13, 2020 to February 28, 2021, then reopened on March 1, 2021 and has since remained open. The hotel has still not recalled Ms. Penaloza to work, and the hotel allegedly hired other, younger, less experienced housekeepers once occupancy rates started to rebound. The hotel’s General Manager and VP allegedly said he was “cleaning house”.
(Now, I can’t resist pointing out word choices and ironies, so I’m just going to say it: The hotel wanted to clean house by firing housekeepers? Just sayin’…)
Anyway, Ms. Penaloza filed a class-action lawsuit on behalf of herself and others similarly situated, alleging age discrimination under the federal Age Discrimination in Employment at (ADEA), the New York State Human Rights Law, and the New York City Human Rights Law. It’s very early in the case, so right now we just have the allegations from Ms. Penaloza. We haven’t heard from the hotel yet. With that said, however, the Kimberly Hotel is not in a great position right now. Yes, a business has a right to fire employees. Yes, during a pandemic that the world hasn’t seen in over 100 years, one that induces a recession that many experts say is more severe than the previous one, many businesses had no choice but to terminate employees. Isn’t filing a lawsuit against such an employee like kicking someone when they’re already down?
Here’s the problem. Anti-discrimination laws, employment laws, in fact, most laws, were not — and are not– on hold during a pandemic. Assuming the allegations in the case are all true, most of the employees who were terminated were over 40 and they were replaced with younger employees. That’s age discrimination. An employer cannot hide behind the pandemic and use it as a reason to do something illegal. At best, that looks and sounds like an employer that did not think its actions through, did not consider its legal obligations or seek legal counsel regarding the legal implications. At worst, it looks and sounds a lot like an employer effectively seeking to profit from a pandemic, which, if it happened, is truly despicable.
If you find yourself having to terminate employees during a recession, a pandemic, or both, remember: You still have obligations under federal and state employment laws. Your legal obligations are not on hold during a pandemic or a recession (or both). If any of your employment practices have an adverse impact on a disproportionate number of employees in one or more classes protected under federal, state, or local employment laws, those practices will leave you open to discrimination claims.
Sounds like The Kimberly Hotel needs to some more housekeeping…
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