On Friday, May 29, 2009, the U.S. Equal Employment Opportunity Commission (“EEOC”) announced that it settled a race and retaliation lawsuit against Area Erectors, Inc, a Rockford, Illinois-based construction company (“the Company”). After first trying to reach a voluntary settlement, the EEOC filed suit against the Company in September 2006 under Title VII of the Civil Rights Act of 1964 charging that the Company terminated Giles Jefferson and a class of 23 other black employees because of their race. According to the EEOC, the Company had a policy of laying off black employees after they had been with the Company for short periods of time, while retaining white employees for long-term employment.

As part of the settlement, the Company will pay $630,000 to Jefferson and the 23 other claimants and offer to reinstate the eligible claimants. While settlements are generally without admission of liability, the Company is also enjoined from engaging in future discrimination and retaliation, required to implement a policy against race discrimination and retaliation and provide periodic reports to the EEOC regarding layoffs and complaints of discrimination and retaliation.

Prior to implementing any layoff or reduction-in-force, companies must undertake a risk analysis to determine if the proposed action will have a disparate impact on a select group of employees based on their race, age, sex, or any other classification protected by federal, state or local law.