Whenever a company demotes someone, it should deliver the message in a way that preserves the dignity of the individual who is demoted so the worker can live with the decisio. A danger with demotion is that the employee might resent being moved to the new position and become a toxic force in the workplace.
Also, the employee might allege that the demotion violated equal employment opportunity laws, such as Title VII or state fair employment practices laws. And those allegations might result in a jury trial.
In the cookie sheet of complaints, demotion usually is accompanied by other charges, such as an employee unlawfully losing an office or being ostracized by co-workers. Sometimes it’s better to discharge.
But most cases that are litigated involve termination, because typically there is not a lot of money involved in demotion cases. However, there might be substantial damages involved in a class action alleging mass demotions or if a very senior person has a significant reduction in their salary.
Those who have been demoted rarely think that it’s because of a performance deficiency. They often think that it is because of some prohibited reason such as age or race.
Sometimes demotions are the result of paternalism in violation of the Americans with Disabilities Act or other anti-discrimination laws. Employers might assume erroneously that a woman can’t travel because of her family responsibilities or that a person battling a disease, such as someone in chemotherapy, shouldn’t continue to do as much work as had been done when the person was well.
Employers often do a disservice to themselves and employees by demoting rather than discharging and then these demoted employees cautioning poison the work environment with ill will.