Terminating an Employee You Know is Going to Sue You
Michael G. Trachtman |
Michael G. Trachtman
Powell Trachtman Logan Carrle & Lombardo, P.C.
MEA General Counsel
Here’s the situation… You have an employee who is mistake-prone and uncooperative. You want to terminate the employee, and you have ample grounds to do so. But you know that the employee is litigious and unreasonable, and you know that if you do terminate the employee, the employee is going file a claim against you. What do you do?
This conundrum arises in many contexts. For example, in last month’s Workplace Advisor, I wrote about retaliation claims, which make up almost half of all EEOC claims. As I explained, retaliation claims typically arise when an employee complains about a discrimination, harassment or ADA issue, and the employer thereafter terminates the employee for completely justifiable reasons, having nothing to do with any prior complaints – but the employee claims that he was unlawfully terminated for trying to enforce his legal rights.
Or, post-termination, many employees will shop for a “creative” employment attorney who will be willing to file a claim asserting that the employee was terminated because of her minority status, or because of her religious beliefs, or because of her age, or because she took FMLA leave…
You cannot stop an employee from filing a claim, but you can make it less likely that the employee (or the EEOC, the DOL or the employee’s attorney) will file or seriously pursue a claim. And if you do end up having to defend against a claim, you can put yourself in a much better position to defeat it.
If You Can’t Prove You’re Right, You May As Well Be Wrong: Part One
Most employers know that the ultimate weapon in this war is documentation. However, not all documentation is created equal — in order for the documentation to serve its purpose, it has to meet certain criteria. There are many variations and nuances that apply in specific workplace circumstances, but here are the most important characteristics of the documentation that will usually win the day.
- In order to be credible, the documentation must have been created at or around the time of the event – that is, at or around the time the employee failed to follow instructions, or was insubordinate, or was late for the fifth time that month. Memos to the employee’s file or written warnings created (or edited) more than a few days after the misconduct may look like evidence fabricated for the purpose of justifying a termination decision that had already been made.
- The documentation must communicate to the employee that the employee’s conduct is unacceptable, and except in truly egregious instances it should give the employee an opportunity to improve while also conveying that the failure to do so could lead to termination. A well-designed progressive discipline policy can be of great help.
- Regularly scheduled employee evaluations that are detailed and real – not vanilla, “meeting expectations” evaluations in which the evaluator takes the easy way out – are crucial. Good luck trying to justify a termination that has been preceded by a wishy-washy evaluation.
If You Can’t Prove You’re Right, You May As Well Be Wrong: Part Two
I see the following situation virtually every week.
A manager meets with a company executive and advises the executive that an employee should be terminated for a litany of valid, performance-based and documented reasons. The executive asks the right questions and confirms that the employee should be terminated. However, the manager and the executive both recognize that the employee may challenge the termination – for example, if the employee is in a protected category (over 40, a racial minority, pregnant, entitled to ADA or FMLA protection…) a discrimination case may be around the corner. So the executive calls me to make sure the company is on solid ground.
I will want to address two issues at the onset. First, I will want to validate the documentation establishing the bases for the termination. Second, I will want to know how the executive will prove that the executive made the termination decision on the basis of that documentation – as opposed to for some unlawful reason. Much more frequently than not, I find out that there is no documentation of the dialogue between the manager and the executive – nothing to show that they made the decision for lawful, documented reasons.
My advice in those instances is to create the documentation that establishes the basis on which the termination decision was in fact made, before the termination is implemented (and to run that documentation by me before it is finalized). For instance, the executive might send an email to the manager confirming what the manager told the executive about the grounds for termination; confirming that the executive agrees that the termination should be made on that basis; and discussing how and when the termination should be implemented.
Now, when the employee challenges the legality of the company’s decision, the company can present evidence, created just before the termination was made, documenting that the decision was properly based on the employee’s performance. Not foolproof – the employee can still claim that the email was fabricated – but much better than having no documentation at all.
Other Important Tools in the Termination Toolbox
The termination letter. Simultaneous with the termination, the employer should provide a termination letter to the employee, summarizing the basis for the termination. That will underline and corroborate that the termination was made for proper reasons.
Handbooks and job descriptions. Handbooks and job descriptions can be crucial. Except in situations involving obvious misconduct, it can be difficult to prove that your real reason for terminating an employee was the employee’s failure to do X, if there is no handbook or job description making it plain that the failure to do X is a serious matter.
Release and severance agreement. If your policy is to provide severance to terminated employees, then, in my view, you must obtain the employee’s release of all claims in exchange for that severance. Do not put yourself in a position of paying the employee for not working while the employee brings a claim against you. These kinds of release and severance agreements are hyper-technical, and how they are best presented to an employee is more of an art than a science – get counsel.
And, of course, let us know if we can help.
Michael G. Trachtman is MEA’s general counsel and the President of Powell Trachtman Logan Carrle & Lombardo P.C., a 30+ attorney King of Prussia-based law firm that has represented businesses and business people for almost thirty years. He can be contacted at email@example.com. See www.powelltrachtman.com for more information.