Reductions in force (RIFs), also referred to as layoffs, downsizing, or restructuring, remain one of the most challenging workforce management decisions college and university employers face. Beyond the operational and financial considerations, RIFs carry significant legal, reputational, and strategic risks and considerations. Institutions must carefully navigate federal, state, and local laws, as well as policies and procedures unique to higher education such as tenure and faculty handbooks, while also ensuring that their actions are fair, transparent, and sensitive to affected staff and faculty.
Below are key best practices and considerations institutions should keep in mind when planning and executing a RIF.
1. Employment Laws, Policies, and Contracts
Several employment laws intersect with RIFs, making compliance a critical priority:
- Title VII of the Civil Rights Act and other anti-discrimination statutes (such as the Age Discrimination in Employment Act and the Americans with Disabilities Act) prohibit institutions from making termination decisions based on protected characteristics like race, sex, age, disability, or national origin.
- State and local laws may expand protections (e.g., covering sexual orientation, gender identity, or caregiver status) or impose additional requirements around notice, severance, and earned leave payouts.
- National Labor Relations Act (NLRA) protections may apply if a unionized workforce is involved, potentially requiring bargaining over the effects of a RIF. Unionized faculty and staff may have additional procedural protections, notice requirements, and severance provisions in their collective bargaining agreements.
Higher education employers should also review any policy and contractual obligations. The institution may have policies or practices around standard severance packages for staff terminations. High-level administrators, including but not limited to college presidents, may also have executive employment agreements with notice requirements, board votes, and payout or severance benefits. Faculty terminations are likely based on faculty teaching agreements and/or the provisions in faculty handbooks and special attention needs to be paid to concerns about academic freedom..
2. RIF-Specific Laws – WARN Act and State Mini-WARN Laws
The federal Worker Adjustment and Retraining Notification (WARN) Act requires certain employers to provide 60 days’ advance notice of mass layoffs or plant closings. Key considerations include:
- Coverage: Applies to employers with 100 or more full-time employees.
- Triggering Events: Plant closings involving 50 or more employees or layoffs affecting at least 33% of the workforce and 50 employees (or 500 employees at a single site).
- Notice Obligations: Employees, unions, and local government agencies must be notified.
Several states, such as California, New York, and New Jersey, have mini-WARN laws that impose stricter thresholds or longer notice periods. Institutions must confirm their obligations under both federal and state statutes.
3. Conducting a Disparate Impact Analysis
Even when employers use neutral selection criteria for layoffs, they may inadvertently create a disparate impact on employees in legally protected categories. A disparate impact analysis is a critical risk mitigation tool:
- Step 1: Identify Selection Criteria – Common factors include performance, skills, tenure, and redundancy of roles.
- Step 2: Analyze the Demographics – Employers should evaluate whether selection disproportionately affects groups based on age, sex, race, or other protected characteristics.
- Step 3: Adjust as Needed – If significant disparities exist, employers may consider revising criteria or exploring alternatives to minimize risk of a discrimination claim.
Documenting the decision-making process and analysis is key to defending against potential discrimination claims. Employers should work with outside legal counsel when doing any self-critical analyses, including disparate impacts, to maximize protection.
Higher education employers should be aware that certain selection criteria may have unintended disparate impacts on employees in legally protected categories. For example, selection criteria based on tenure status or rank may have a disparate impact on junior faculty or non-tenure track faculty which may tend to be more diverse.
4. Severance Agreements and Releases
Providing severance pay and release agreements can help ease the transition for employees and reduce legal exposure. Institutions should:
- Offer Consideration: A severance payment or benefit not otherwise owed in exchange for a release of claims.
- Comply with OWBPA: When obtaining releases of age discrimination claims under the Older Workers Benefit Protection Act (OWBPA), employers must meet strict requirements, including providing 21 days’ notice for individuals (45 days for group terminations), a 7-day revocation period, and detailed disclosures about the layoff group.
- Tailor Agreements: Ensure severance agreements and releases are compliant with federal and state law and any applicable CBA provisions or institutional policy requirements, avoid overbroad confidentiality or non-disparagement provisions, and align with regulatory guidance from the EEOC and NLRB.
These times of transition can be difficult for higher education employees, so approaching them with compassion and thoughtfulness are important. As a result, many institutions should consider also providing job placement assistance for terminated employees.
5. Communication and Employee Relations
How an institution communicates about a RIF can significantly impact morale, reputation, and litigation risk:
- Transparency: Clearly explain the institution’s rationale and decision-making criteria and how both support the institution’s broader educational mission to avoid the perception of unfairness. For faculty terminations, engage early with faculty governance bodies to ensure transparency and meet any procedural requirements in the faculty handbook.
- Dignity and Respect: Deliver the news in a private and empathetic manner, and provide information about severance, benefits continuation, and support resources.
- Support Services: Consider offering outplacement assistance, counseling, or job search resources.
- External Stakeholders: Be prepared to address questions about academic continuity and program from stakeholders, including the institution’s Board, students and parents, accreditors, and local community.
6. Documentation and Consistency
Institutions should maintain thorough documentation to demonstrate that decisions were legitimate, consistent, and non-discriminatory. This includes:
- Written records of business justifications for the RIF.
- Documentation of the selection process and criteria applied, as well as compliance with termination provisions in the faculty handbook, CBA, or institutional policies, as applicable
- Copies of employee communications, notices, and agreements.
Consistency across the organization is critical. Inconsistent application of criteria or benefits or failure to follow required policies can expose the institution to claims of unfair treatment.
7. Post-RIF Considerations
After implementing a RIF, institutions should:
- Monitor Morale and Retention: The remaining faculty and staff may experience decreased engagement or productivity. Leadership visibility and communication are key.
- Reassess Workload: Ensure that the remaining faculty and staff are not overburdened and that critical functions are adequately staffed. Assess the impact of the RIF on academic programs, student services, and mission continuity at the institution.
- Review Litigation Risk: Monitor for EEOC charges, lawsuits, or union grievances that may arise.
Conducting a reduction in force in higher education is never easy, but careful planning, legal compliance, and empathetic execution can significantly mitigate risk. Institutions should:
- Understand the legal framework, including federal and state employment laws, faculty handbooks and contracts, and any applicable institutional policies;
- Conduct disparate impact analyses to identify and minimize discrimination risks;
- Structure severance agreements to secure enforceable releases; and
- Communicate with transparency and respect to maintain trust within and outside the campus community.
These steps are recommended at a high-level and are not a one size fits all. Employers should work with counsel to prepare actionable steps that are appropriate for its organization and consistent with its policies and practices and applicable law. By balancing compliance with compassion, institutions can navigate RIFs responsibly while protecting both the university and its academic mission.