Technology media and telecommunications (“TMT”) industry employers should begin taking steps to mitigate a new litigation risk—reverse discrimination claims. This past year there were a number of news stories regarding the lack of diversity in the technology industry (see, for example, articles in Inc., The Cut, Fusion, The New York Times, and Wired). Numerous advocacy groups pressured TMT employers to focus on increasing workplace diversity in order to eliminate this disparity. As TMT employers continue to defend themselves against these allegations, the recently filed Complaint in Anderson v. Yahoo!, 5:16-cv-00527 (N.D. Cal. 2016), alleges that Yahoo!’s robust attempts to encourage gender diversity constituted unlawful sex discrimination against male employees.

The Complaint alleges that Yahoo! “intentionally hired and promoted women because of their gender, while terminating, demoting or laying off male employees because of their gender” and that male employees who received an “occasionally misses” employee score were subject to immediate termination, while similarly rated female employees were not. The Complaint also finds fault with the fact that a disproportionate number of Yahoo!’s recent hires are female.

The Complaint attempts to put TMT employers in a no-win situation. As we have previously discussed, maintaining a workforce lacking in diversity presents serious litigation risks. However, the Anderson Complaint alleges that taking steps to remedy the problem by exhibiting an explicit preference for certain classes of employees may run afoul of the same statutes.

To mitigate litigation risks associated with both discrimination and reverse-discrimination claims employers should:

• Never take any action “because of” a protected characteristic.

• Promote diversity through recruitment rather than terminations. In fiscal year 2015 the EEOC received more than nine times as many race and sex discrimination complaints alleging wrongful termination as complaints alleging failure to hire.

• Before initiating a reduction in force conduct due diligence regarding each employee who will be impacted. This can provide an opportunity to negotiate release agreements with particularly high-risk employees.

• Ensure that all similarly situated employees are subject to the same rules and practices.