Most employment lawsuits and EEOC complaints are triggered by terminations. Hasty termination decisions that are not supported by documentation, or analyzed for legal risk, or handled in a respectful way, are more likely to be challenged in court. The relatively small cost spent on legal fees to ensure a sound decision pales in comparison to the tens of thousands of dollars your business will have to spend in the first few months of a lawsuit that could have been avoided. These are some key points for your organization to consider for every termination:
- Have you collected actual and provable facts regarding the reason for termination?
Collecting the facts is your first step. This means nailing down facts you can prove. This can involve pulling emails and texts; compiling performance data; interviewing witnesses and managers. Relying on rumors or suspicions, not interviewing a key party, or making emotional decisions can get your company into hot water.
- Have you pulled all relevant documentation?
At a minimum, the employee’s prior discipline and performance reviews should be pulled. If the employee has a medical condition, all doctor’s reports, leave of absence forms, workers’ comp forms, and the job description should be reviewed. If the employee has made complaints or sent emails that could possibly constitute “protected activity,” all of those items should be reviewed for legal risk. Employment agreements and offer letters are also important: the employee may have “for-cause” protection, meaning the reason for termination must fit the contractual definition of “cause” and withstand higher scrutiny. There also may be a severance obligation or a notice provision to be mindful of. These items should all be reviewed well in advance of any decision to terminate.
- Has the employee been confronted with the issue and given a chance to respond?
This step is critical and it is routinely left out. In almost every situation, employees should be confronted with the facts against them in a respectful manner and given a chance to respond. There are three primary benefits to this:
- Fairness: It not only feels right to have a conversation with the employee who may be about to lose their job, it also may provide information that is exculpatory or absolves the employee’s perceived misconduct, giving the employer the chance to make a fully educated decision. The employee may also feel less angry about the ultimate termination decision if the process was fair and impartial. A jury would also expect this step be taken before the employer ends someone’s livelihood. Providing “due process” can eliminate the chances the employee feels blindsided, and can greatly decrease the chance the employee will challenge the action.
- Getting Admissions: While the face-to-face confrontation can be uncomfortable, many times it actually may provide information that bolsters your company’s termination decision. The employee may admit the underlying conduct or at least part of it. The employee may refuse to cooperate, or say something inappropriate to the interviewer. He or she may also make statements that are clearly contradicted by documents, emails, or other testimony, creating grounds for a discharge based on dishonesty.
- Understanding Their Story: By asking the employee about the allegations against them, you can have a better understanding of the entire situation, which could result in the employee being retained. If the decision is to terminate, you also have the benefit of having heard the employee’s story, which is what he or she will likely argue if there is litigation.
- Is the reason for termination wholly unrelated to any legally protected class or protected activity?
An employee’s protected “classes,” like race, disability, sex and age, cannot be considered in a termination decision. There are also many other protected traits that can vary from state-to-state, some that may surprise you. In Colorado, you cannot discharge an employee for “lawful off-duty conduct;” in Wisconsin, having an arrest or conviction record is off-limits.
Protected “activity” is also a critical area to think about, possibly the most overlooked area by employers. Protected activity can take many forms. Did the employee recently ask for or return from FMLA leave, file a workers’ comp claim, or request a reasonable accommodation under the ADA? If you are terminating an employee because he or she is a “troublemaker,” are you inadvertently relying on activity that cannot be considered, like the employee’s recent complaint about wages, unpaid overtime, suspected illegal activities, fraud, or discrimination? In order to avoid a retaliation claim, these questions should be carefully considered.
- Have other employees who have engaged in similar misconduct also been terminated? (or did they receive lesser discipline—if so, why?)
Most discrimination claims are proven by comparative evidence. This means that your organization’s terminations should be carried out equally across the board for the same types of offenses. If you are terminating a female, think about whether male employees have engaged in the same misconduct and were not terminated. If three employees were involved in falsification, but only the Hispanic employee is being terminated, you must have a solid non-discriminatory explanation why. A careful review of your past termination decisions, as well as discipline that was not imposed on certain employees, is a must.
- Do all decision-makers agree with termination?
If at all possible, it is important to get consensus with all managers in the employee’s chain of command and Human Resources before a termination decision is made. The fact that the decision-making team has a dissenter will come out in litigation and could weaken the employer’s defense if a lawsuit is filed.