I get lots of interesting employment and labor law questions from Western Growers members. Perhaps the most typical question I receive is one that almost invariably goes like this: “We have this ’problem employee’, is it okay if we terminate him today?” More often than not, after asking a few questions, I discover that the best guidance I can give is to encourage the member to slow down to ensure that they do it right — because getting it wrong can lead to an expensive lawsuit. Even if they ultimately win, they will still end up paying many thousands of dollars in legal fees to defend the case. The best course of action is to prepare for the termination, and then to execute the plan.
Planning for termination decisions helps employers justify their decision and defend against potential litigation. Before employers make a termination decision they should understand applicable employment-related laws; develop and consistently apply appropriate policies and procedures; and document performance and disciplinary issues fully and objectively.
Understand Applicable Laws
The general rule for private employers in the United States is that employment is at-will, meaning employees may be terminated for any lawful reason. The question of whether a termination was conducted for a lawful or unlawful reason is a question of fact for the judge in a bench trial or a jury in a jury trial. While a manager may have perfectly legitimate (in their own mind) reasons for terminating an employee, if the employee is in a “protected class,” she may claim she was terminated due to discrimination, retaliation or harassment. For example under both state and federal law, discrimination on the basis of race, color, sex, pregnancy, national origin and religion is unlawful. Other protected classes include, but are not limited to, age (40 and over), disability, and military service.
Other litigation risks include terminating an employee who has invoked a protected leave under the Family Medical Leave Act (FMLA) or California Family Rights Act (CFRA), USERRA military leave, workers’ compensation leave, or Americans with Disabilities Act (ADA) disability leave, among others.
In addition, employers should proceed very cautiously before attempting to terminate employees who engage in protected activities such as union organizing, whistleblowing, or enforcing their rights under various wage and hour laws.
There are exceptions to the general rule of at-will employment, such as termination because an employee refused to break the law. Many employment laws interpret termination to include constructive discharge, meaning that the terms and conditions of the workplace were so intolerable that they made it impossible for the employee to remain with the employer and the employee was compelled to resign.
Develop and Consistently Apply Policies
Proper documentation and implementation of an employer’s policies and procedures are keys to an employer’s success in avoiding or defending against wrongful discharge claims. If an employee’s wrongful behavior leads to an employee’s termination, the employer can undercut the employee’s burden to prove that she was fired because of unlawful conduct by pointing to a violation of a clear policy prohibiting the relevant behavior. For example, an anti-harassment policy can help an employer defend against a termination decision based on an employee’s engaging in harassing activities.
Companies should require each employee to sign and date a printed acknowledgment that she received, reviewed and understood the handbook. Such a signed acknowledgement is important to rebut a claim that the employee was unaware of the particular policy for which she was fired.
Policies are useful to employers only to the extent they are actually followed consistently. The only thing worse than not having a policy is having a policy that is not consistently followed. Employers that inconsistently impose discipline against various employees for the same offense risk litigation.
Assess the Reason for the Termination
Managers often give vague reasons for wanting to terminate an employee, such as that he or she is not a “good fit,” or not a “team player” or not “keeping up with the times” — conveniently vague terms that may include legitimate business reasons or may in fact be code for unlawful discrimination. HR managers need to drill down to get to the facts that support the real reason the manager wants to terminate the employee at this time.
Document Reasons for Termination
Employees who prevail on wrongful termination claims often succeed based on a lack of documents showing lawful reasons for termination or a lack of objectivity in those documents. Employers often face challenges to their legal defense based on the shortcomings with their documentation.
Employers often fail to effectively document the issues that ultimately led to termination, such as shortcomings in the employee’s performance. When employers lack documentation establishing the justification for the termination, juries becomes suspicious and ascribe discrimination or other unlawful motives as the actual basis for the employment decision.
Good documentation is critically important because in wrongful termination cases, the employer often must offer a lawful reason for its employment decision. An employer should be able to support its termination decision with documentation including: written performance evaluations; notes of management meetings during which the terminated employee was discussed; written warnings or poor attendance records; documentation evidencing a clear violation of specific employer policies.
Terminations should be documented in an objective and professional fashion. Often documents include personal comments or emotionally charged language that tend to undermine a company’s defense in a wrongful termination case. If there is an allegation of wrongdoing against the employee (e.g., sexual harassment), management should conduct a timely and adequate internal investigation, and document the results.
Delivering the Termination Message
The termination message itself should be documented and carefully worded. The actual termination meeting should be planned to occur in a relatively private location and at a time when there will be few interruptions. A human resources representative should be present to assist in note taking and document the termination, to act as a witness to any comments or questions that arise at the meeting, and to go over the housekeeping details (e.g., tender of final paycheck, COBRA eligibility, unemployment benefits, return of keys and company equipment, etc.)
The manager should make the necessary points directly without making excuses or minimizing the reason for the decision and ensure that the employee understands that employment has been terminated. Don’t get dragged into an argument regarding the decision, but be open to concerns and questions. Finally, avoid comments that may encourage litigation by demonstrating inconsistency in the employer’s motive, such as “This is not my decision.”
Termination is a difficult and emotional matter so the employer’s representatives should be sensitive. The fairness and professionalism that company representatives exhibit at a termination meeting can minimize the chances an employee will sue the employer. If the employee does sue, a caring approach can support the company’s position that it acted for lawful business reasons and was at all times fair and reasonable in its decision-making.
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