Circuit City's move to replace veteran employees with cheaper workers results in anguish and lawsuits.
During his 11 years as a salesman at Circuit City in Oxnard, Calif., Dan Weidler received regular raises and laudatory performance reviews describing him as "great" and a "superstar." He worked hard, liked what he did, and expected to stay until he retired. He is in his mid-50s.
But those plans ended late last month when Mr. Weidler's boss delivered bad news: Weidler was being laid off, one of 3,400 experienced employees – 8 percent of the staff – whose salary levels made them a liability. They will be replaced by lower-paid workers.
Although large-scale layoffs have become a fact of life in corporations – Citigroup announced last week that it is cutting 17,000 jobs – the move by Circuit City has attracted particular attention and, in some circles, criticism and anger. What sets this layoff apart from most others is the fact that some of the best employees are being replaced. That raises questions about the role and value of experience in an increasingly competitive workplace.
Weidler and two co-workers have filed suit against Circuit City, charging age discrimination and wrongful termination.
"In California, a law specifically states that if a company decides to make a decision based on wages, and that decision adversely impacts the older population – those over 40 – that is an illegal action on the part of the employer," says Nathan Goldberg, a Los Angeles attorney representing the plaintiffs.
"Essentially, the people affected by this were those earning the most money, and, by definition, those are the people who have been there the longest," Mr. Goldberg says. "Some had been there 30 years, 25 years, 20 years. They thought they were being valued for experience, service, dedication, loyalty. They were told they were expendable, simply because they earned too much money."
Weidler was making $15.01 an hour. Although he can reapply for a job after 10 weeks, he would earn only $10.22 an hour.
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