Remote Workers Often First to Get Laid Off Despite Legal Risk

(Bloomberg Law) — Remote workers are more likely to be laid off or miss out on promotion opportunities than their peers who work in the office or in hybrid environments, potentially exposing employers to costly discrimination lawsuits.

A January survey from Live Data Technologies Inc. found that in 2023 fully remote white-collar workers were 35% more likely to get laid off than colleagues who put in at least some time in the office. The software development firm, which tracks job trends, analyzed a sample of two million workers and also found that remote employees were 31% less likely to get promoted.

The data follows a similar survey in December by ResumeBuilder.com, which said that employees' work arrangements could impact their career advancement.

Employment attorneys say businesses evaluating future workforce cuts and benefits for in-person and remote workers must proceed with caution because they could expose themselves to liability if a worker can prove an employment action based on work location violated federal or state anti-bias laws.

Studies show remote workers are more likely to be women, people of color, and those with disability accommodations, so evidence that any of these factors contributed to an adverse employment action could give rise to claims under Title VII of the 1964 Civil Rights Act and the Americans with Disabilities Act of 1990.

Related:Who Is Most Likely to Get Fired? Remote Workers, Middle Managers

"In any situation, it's preferable to have very objective criteria if you're analyzing people for either a promotion or a reduction in force. Unless the location of the individual is clearly integral to the job or is an important component of that job, it's difficult to make the argument that remote work should be included there," said Lynn Vuketich Luther of Eastman & Smith Ltd.

"While remote work in and of itself is not a protected classification" under federal and state civil rights laws, "the reasons for that remote work could be," Luther said.

"If an employee is working from home as an accommodation for a disability and they are passed over for a promotion or they're let go because they're not in person, then that very well could result in a discrimination claim," she said. "And we have seen instances of that."

In such a situation, the employer should assess whether it has a duty to engage that employee in an interactive process and allow remote work as a reasonable accommodation, "rather than considering that employee 'non-promotable,'" said Angela Reddock-Wright, a mediator and managing partner of Reddock Law Group.

Related:IT Workers Want More Than Just a Paycheck

Equity Risks

Announcements of reductions in force have become common, particularly in the tech industry, where San Francisco-based e-signature provider DocuSign Inc. recently joined a growing list of companies — including Amazon.com Inc. and Salesforce Inc. — that have announced mass layoffs.

At the same time, the post-pandemic, return-to-office mantra continues. Companies like IBM are instructing managers working remotely to report to an office three days a week or quit their jobs, while United Parcel Service Inc. has ordered workers to be in the office five days a week starting in March.

Employment attorneys haven't seen a massive wave of terminations or promotion denials solely because of where people are working, but acknowledged that there's growing discomfort among companies that believe remote work undercuts collaboration and connection among workers as well as corporate culture.

The pushback into the office disproportionately impacts women and people of color, who tend to prefer hybrid or fully remote work at higher rates than White men because they experience fewer implicit biases and microaggressions than in person, according to a 2023 study by Lean In, an organization that advocates for workplace equity.

And at least some employees say they'd rather quit than give up their remote arrangements.

"Employers should evaluate the reasons employees are opting to work from home and whether there are any underlying issues the employer should address to ensure a fair and equitable work environment for all," Reddock-Wright said. "To do otherwise could subject employers to claims of race and other forms of discrimination."

In addition to potential litigation risks, companies could harm employee morale and damage their brand, hindering future hiring efforts at a time when more workers are filming their layoffs and sharing them on social media.

There could be legitimate, legal business reasons why having an in-person presence is essential for the promotion or retention of certain workers, said Meredith Cavallaro, a partner at Paduano & Weintraub LLP. But employers must communicate effectively and be transparent with workers, and also document their specific reasons in case they're challenged later, she said.

Employers must be creative in balancing the competing desires for in-person, hybrid, or fully remote work "to harmonize the workforce because they don't want to have retention issues because of it," Cavallaro said.

Jurisdiction Matters

Title VII prohibits companies from making employment decisions based on race, religion, sex, pregnancy, or national origin. The US Supreme Court's 2020 Bostock v. Clayton County decision clarified that Title VII also bans discrimination on the basis of sexual orientation and gender identity.

A disparate treatment, or intentional discrimination, claim arises when an employer outrightly treats an employee or job applicant differently because of a protected characteristic, requiring a worker to prove that their protected characteristic caused the adverse employment action. That's a heavy burden because many workers would lack such evidence, attorneys have told Bloomberg Law.

But a policy that's neutral on its face — like laying off or denying promotions to remote workers — can in some cases lead to a disparate impact claim if it has a discriminatory effect.

Employers that target remote workers also run the risk of violating certain state and local employment discrimination laws that grant even broader protections than Title VII.

For instance, New York City explicitly designates family caregivers as a protected category. That means a caregiver who may need a flexible or remote work schedule could have grounds to sue if there's evidence to connect their caregiver status to an adverse employment action — such as being fired — based on work location.

Employers should be attuned to the legal requirements of the jurisdictions where employees reside and work because the law invoked in a bias claim wouldn't necessarily be applicable where the company itself is based, Cavallaro said.

"This is something we often see companies overlook," Luther said. "The biggest thing that we see continuously" in employment bias cases is how jurisdiction "comes into play."

"A lot of employers just aren't aware that they're on the hook for some of those state law requirements merely because they have one employee working in the jurisdiction," Luther said. "Sometimes that's something that surprises them and it's already too late to fix if they haven't vetted that before they make an employment decision."