Circuit City’s decision to get rid of some 3,400 workers because they were getting paid “well above the market-based salary range for their role,” according to the company, seemed to me to be a curious way to handle your workforce. Why would a company struggling to compete with strong competitors like Best Buy think that canning the highest-paid (and therefore, probably its best) workers is a winning workforce strategy.

It’s not, of course, and now the other shoe has dropped: Three older Circuit City workers who lost their jobs as a result of this “wage management initiative” (the company-speak for firing people) have sued the company, claiming that the electronics retailer violated California’s age discrimination laws when it laid them off.

California’s Fair Employment and Housing Act is tougher than laws in most states, and a 2002 amendment says that using salary as the basis to terminate workers may constitute age discrimination if older workers, as a group, find that they are negatively affected.

The three workers suing Circuit City are all age 57 or older. Their attorney, Gloria Allred, told the Los Angeles Times that the Circuit City action had an “adverse impact on older employees.” She is seeking class-action status for the case, although it is unclear how many of the more than 600 Circuit City employees fired in California are 40 or older. “Terminated employees in other states may or may not have any rights depending on their state laws,” Allred told the Times, “but California is on the cutting edge of laws that protect employees’ right from age discrimination.”

This is not only a bad decision (as I wrote in my latest Last Word column), but it is also incredibly stupid and shortsighted. I’ve created a new honor, the Stupidus Maximus Award, to recognize the “most ignorant, shortsighted and dumb workforce management practice of the year.” If you have a good nominee, send them along to me at jhollon@workforce.com. Circuit City is clearly a front-runner for 2007 “honors.”