"Last Hired, First Fired" and Public Employee Layoffs: the Equal Employment Opportunity Dilemma

• DOI: 10.1177/0734371X8100200104
• Date: 01 September 1981
• Published date: 01 September 1981
• Author: Robert N. Roberts
• Subject Matter: Articles

"LAST HIRED, FIRST FIRED" AND PUBLIC EMPLOYEE LAYOFFS:
THE EQUAL EMPLOYMENT OPPORTUNITY DILEMMA
Robert N. Roberts
The University of Virginia
Introduction
During the 1960s and 1970s, public employees made substantial gains in pay
levels and other types of employee benefits. In fact, the level of pay for certain
public sector personnel has caused debate over whether public employee com-
pensation has exceeded the ability of the governments to pay (Pierce, 1975:1199).
Yet, the most important non-monetary benefit of public employment has been
the job security provided to the majority of civil servants at the local, state,
and federal levels. Since the depression, public service employment has grown
steadily, particularly within state and local governments. The growth in govern-
ment has insulated public employees from the recession-induced layoffs that
periodically hit the private sector. When cuts in government expenditures have
occurred, the majority of public employers have used hiring freezes, attrition,
and early retirement incentives to avoid employee layoffs.
Recent trends indicate that the unwritten rule of no public employee layoffs
is becoming an anachronism for a period of deepening financial problems for
government at all levels. As efforts to slow the growth of government expen-
ditures continue, public employers will find it increasingly difficult to avoid
the layoff of some employees (Stanley, 1977; Slack and Weishaar, 1976).
The education community has been the first to experience necessary layoffs.
Large numbers of teachers in school districts across the country have been laid
off because of declining enrollments at the elementary and secondary school
levels (U. 5’. News and World Report, 1976:65). Many of those laid off entered
the teaching profession with the expectation that their positions would be secure
as long as they satisfactorily performed their assigned responsibilities.
During the 1960s and the 1970s, significant progress has also been made in
the area of equal employment opportunity for minorities and women. Over the
last two decades, numerous statutes, executive orders, and administrative regula-
tions have been enacted or issued to prohibit discrimination in employment
because of race, color, religion, sex, or national origin. 1 Besides the more prom-
inent provisions of Title VII, 2 other statutory grounds have proved effective
in ending employment discrimination by state and local
3
governments.
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In addition to the trends of fiscal austerity and the drive to end discriminatory
employment practices in both the private and public sectors, the increase in the
size and power of public employee unions has made collective bargaining the
most important means of resolving disputes over the level of compensation for
public employees. Following the practice of private sector unions, public
employee unions have directed their resources towards obtaining better monetary
and non-monetary benefits. Of the non-monetary benefits, the awarding of
seniority, providing job security to those employees with the longest service,
has been regarded as one of the most important.
Briefly, seniority is the measure of time an employee accrues with an employer.
A
seniority system contains &dquo;rules of when and how to apply this measure of
time&dquo; (Weiner, ~91~Oo440). Both public and private employee unions have regard-
ed negotiated seniority provisions an essential element of any comprehensive
collective bargaining agreement. The rule of &dquo;last hired, first fired&dquo; determines
the order in which employees receive layoff notices. As the phrase implies, those
hired last are laid off or furloughed first. Accordingly, the longer an individual
stays with one employer, the less likely it is that the employee will receive a
pink slip.4
I
The Employment ®p~®~°t~~~ty lle a
Through the mid-1960s legal commentators, civil rights groups and public
and private employee unions raised a few questions regarding the use of seniority
as the basis of making employee layoffs. Employers and employee unions regard-
ed seniority systems as a fair and equitable way of deciding what employees
would lose their jobs. But within a few years of the enactment of Title VII of
the 1964 Civil Rights Act, legal scholars began to raise questions about the im-
pact of the &dquo;last hired, first fired&dquo; rule on equal employment opportunity pro-
~r~rr~s. 5 At first, these writers directed their attention to the effects of seniority
systems on the promotion opportunities for minorities and women (Cooper and
Sobal, 1969). They expressed concern that promotion systems based on the
seniority of employees would unfairly discriminate against minorities recently
hired pursuant to affirmative action 6
6
Subsequently, other writers shifted their attention to the impact of the &dquo;last
hired, first fired&dquo; rule on the long-term success or failure of Title VII to eliminate
discriminatory employment practices. They argued that the strict application
of seniority for purposes of layoffs had a disproportionate impact on minorities
and women, since they were the last to be hired. In other words, the operation
of the seniority system perpetuated the effects of previous employment
discrimination. Employees recently hired had little opportunity to build up suf-
ficient seniority to avoid being laid off during periodic downturnes in the
economy. Years of effort to increase the representation of women and minorities
could be wiped out in a few months.
30

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Title Vtl and the Bona Wide System
Supporters of seniority-based layoffs directed the attention of critics to sec-
tion 703(h) of Title VII:
Notwithstanding any other provisions of (Title VII), it shall not be
an unlawful employment practice for an employer to apply different
standards of compensation, or different terms, conditions, or
privileges of employment pursuant to a bona fide seniority or merit
system ...provided that such differences are not the result of an in-
tention to discriminate because of sex...
The language of 703(h) and its legislative history tend to support the interpreta-
tion that Congress intended to immunize otherwise neutral seniority systems
from attack even if such systems tended to perpetuate the effects of past
discriminatory employment practices. However, Congress failed to provide much
guidance on what it meant by a bonafide seniority system. Critics of this inter-
pretation of 703(h) argued the Congress could not have intended to permit the
continuation of employment practices that institutionalized the effects of past
discritr~ination.’ 7
Through the early 1970s the debate over the meaning of 703(h) remained
basically an academic exercise. But the recession of 1974-1975 brought home
the reality of the &dquo;last hired, first fired&dquo; rule to millions of workers. 8 The reces-
sion had a particularly severe impact on minorities and women who had entered
the labor force as the result of increased employment opportunities brought
about by the enforcement of equal employment opportunity laws. Not unex-
pectedly, many of those laid off brought suit to block the layoffs on the grounds
that the seniority systems operated to perpetuate the effects of past discrimina-
tion and therefore violated Title VII. 9
While the 1974-1975 recession did not directly affect the operations of state
and local governments, the financial crisis that rocked the foundation of the
City of New York demonstrated that public employees were not immune from
large-scale layoffs. In response to the financial crisis, the City of New York
laid off thousands of employees during the spring and summer of 1975. As part
of these layoffs, some 2,500 police officers received pink slips. The New York
Civil Service Law requires that employees hired last be laid off first in event
of a reduction in force. 10 The same requirement was contained in the contracts
negotiated with the police officers’ bargaining representatives.
The layoffs had a devastating impact on women and minority police officers
of the New York Police Department. The action reduced the number of women
on the police force by 73.5070. It required the discharge of only 23.9~10 of male
police officers. Of the male police officers released, a significant number were
black or Hispanic. Shortly thereafter, women and minority police officers
brought suit to block the layoffs (Acha v. Beame, 1975).
31

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The layoff of significant numbers of minorities and women in the private
and public sectors shifted the debate over the scope of 702(h) to the federal
courts. It is the purpose of this article to examine the developments regarding
the legal status of neutral seniority systems allowed to operate in such a man-
ner as to throw a disproportionately large percentage of women and minorities
out of work. There is still much confusion about the authority of the federal
courts to modify seniority systems to prevent the layoff of certain classes of
employees. This confusion remains, notwithstanding a number of important
decisions by the United States Supreme Court on the meaning of 703(h).
This article will also suggest how the courts might apply existing legal theory
to a number of different types of layoff situations Although the law dealing
with employee layoffs has changed significantly over recent years, it is impor-
tant for public administrators to familiarize themselves with current applica-
tion of the appropriate case law on the subject
The Legal of
Equal Employment Opportunity
Litigation in the...