BUSINESSWEEK ONLINE : JULY 31, 2000 ISSUE
ECONOMIC TRENDS A Firing by Any Other Name More are called "layoffs" now It may not be strong, but Paul Oyer and Scott Schaefer of Northwestern University spy a link between the rise in wrongful termination lawsuits and the increase of mass layoffs in the 1990s. In a study in the RAND Journal of Economics, they note that the Civil Rights Act of 1991 vastly increased the potential penalties and legal costs of employers accused of wrongfully dismissing employees on the basis of race and sex. Reasoning that a fired worker in one of these groups would be less likely to sue if let go as part of a layoff, the two economists figured that employers would tend to morph terminations of such workers into layoffs to avoid problems. Sure enough, an analysis of survey data available for black male workers indicated that they were significantly more likely to be let go via layoffs after the 1991 act was passed, even though their overall job termination rates relative to whites didn't change. In contrast, the share of white job terminations by firing was unaffected by the law. These findings don't necessarily chart any rise in job discrimination. What they do indicate is that employers seeking to terminate ''protected'' workers tended to change the way they did it to minimize the costs of potential lawsuits. By GENE KORETZ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ BACK TO TOP					INTERACT E-Mail to Business Week Online

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