Subjective criteria for hiring or reduction in force decisions may be problematic

Mergers and acquisitions bring lots of financial opportunity, but they can sometimes result in upheaval in the workforce as the new entity determines whether it will operate the business differently from its predecessor. If the new business decides to change the workforce, how should it make those decisions? A recent appeals court opinion sheds some light on that question.

Background

Merit Energy Company, LLC, acquired part of an ongoing oil and gas company from XTO Energy in the Ozark, Arkansas area. Merit determined that it didn’t need all of the former XTO lease operators. Seventeen-year XTO employee Kimberly Connors wasn’t included in the 20 lease operators chosen to be rehired.

Connors had operated one of the longest routes and had more experience than several of the other operators chosen. She sued Merit, claiming age discrimination and gender discrimination.

The U.S. 8th Circuit Court of Appeals (whose rulings apply to Arkansas, Missouri, Iowa, Nebraska, North Dakota, South Dakota, and Minnesota employers) reviewed the hiring decisions and found that Connors couldn’t continue with her age discrimination claim. It found that Connors was qualified to be hired for the position, but there was no age discrimination because Merit also rehired several other operators who were older than 40, and several who were the same as age she was (55) or older.

The court ruled differently on Connors’ gender discrimination claims. All of the rehired lease operators were men, so she was able to satisfy the initial proof to show the possibility of gender discrimination.