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How mergers and acquisitions can lead to widespread discrimination

Feb 26, 2023 | Employment litigation

There can be cultural conflicts when the existing workforce at two organizations merge into one, as a significant degree of redundancy is likely. This overlap can drive interpersonal tension and lead to a massive increase in operating expenses. Workers often feel intense pressure as they worry about whether they will keep their jobs or not after such a dramatic company transition.

After expansion typically comes contraction, often in the form of layoffs and downsizing. Companies, motivated by their short-term budgetary issues, may make drastic staffing changes following a merger or acquisition.

Organizations will often identify target numbers regarding how many positions they need to eliminate. They may give workers in different departments the opportunity to take early retirement or to leave with severance to reduce the overall workforce. Other times, a company will strategically terminate specific employees.

When workers get let go against their will, there are often hard feelings about the situation. In some scenarios, they may actually have a viable case for claiming that the company discriminated against them or wrongfully terminated them. When could large-scale terminations lead to such claims by the workers who have been let go?

When there is a pattern to the decisions

Sometimes, those in management or human resources expose their unspoken personal biases when making decisions for the company. For example, when looking at the pool of workers let go, it may become quite obvious that those of a certain racial background or a specific sex are overrepresented in the group of people let go from the company.

Any time there is a trend regarding the decisions the company makes that negatively impacts a group of employees who share a protected characteristic, those workers may have grounds to take action against the company. Religion, race, national origin, disability and age are all protected characteristics that employers should not consider when determining who to retain and who to let go in a large-scale staff reduction.

Companies that do not carefully evaluate decisions about hiring and firing in the wake of a merger or acquisition could unwittingly let staff members with personal biases make discriminatory decisions that negatively affect certain workers. Learning more about common grounds for employment law claims will benefit workers concerned about company conduct and employers trying to avoid potentially costly employment law missteps.