You’re fired! Before you utter those words, you better be sure that you have taken the necessary precautions to protect your business from employee lawsuits. One of the biggest misconceptions is that because you are in an at-will State you can terminate someone’s employment at any time and for any reason with or without cause. While that may be true, the law also provides that you cannot terminate someone for an unlawful or discriminatory reason. If you are not able to establish a non-discriminatory reason for a termination, you risk spending tens if not hundreds of thousands of dollars defending your decision in litigation. Here are 4 critical questions to ask yourself before pulling the trigger on that termination.
When it comes to employee wrongful termination lawsuits, employers are often asked to demonstrate that it has effectively publicized the rule that was violated or the job standard that was not met. By having written workplace policies and job standards, you are putting all employees on notice as to what expectations you have with regard to how to conduct themselves in the workplace; what it means to successfully perform their job duties; and what consequences exist for failing to satisfactorily meet these expectations. Once you have communicated these standards, you are in a better position to hold your employees accountable for any failures to meet them.
2. Can you establish that the employee was aware of the existence of the policy and/or performance standard? When deciding whether there is a justifiable basis to fire an employee, the existence of a policy or standard alone is not enough. As an employer, you will still want to be able to prove that not only does the policy or standard exist, but that the employee was aware, or should have been aware, of the rule or standard that is the basis of the termination. The best way to do that is to have employees sign-off on any policies or procedures that they will be held accountable to. Having proof of having provided employees with notice of workplace expectations and consequences will become critical in any legal disputes that may arise from a termination.
3. Have You Documented Prior Poor Performance or Policy Violations? Documentation to support your decision to terminate is another important component to being able to defend your business from employee lawsuits. You might think, “Well, I’ve had several conversations with the employee about their poor performance,” but the reality is, in the eyes of the courts, if the conversation wasn’t documented, it never happened. When it comes to failing to meet performance standards or violations of company policy, a conversation is not enough. Any performance issues or policy violations that are addressed with an employee should be confirmed in writing and acknowledged by the employee.
4. How have similar situations been handled in the past? While it is understandable to look at the circumstances of each employee incident on an individual basis, if your business has an established rule or standard and it was knowingly violated, the consequences should generally be the same for all employees (outside of serious mitigating factors that may exist). So, whatever the consequences are for violating company policy or for failing to meet work standards, it is up to you as the employer to enforce it consistently. If you make exceptions, even with the best of intentions, and you terminate an employee for a violation that you allowed another employee to slide on, you risk claims of disparate treatment due to a discriminatory reason which can become very expensive for your business to defend in employment litigation.
Terminating an employee always has its risks. Can you ever eliminate your risks completely? Unfortunately, no. However, the more prepared you are before you act on a termination the better position you put your business in to defend its decisions and actions. If you don’t already have dedicated in-house HR support for your business or need additional support, The HR Hotline® is an experienced HR company that partners with your business to assist you with your day-to-day human resources needs so that you can focus on growing and managing your business. Contact us to see how we can help – firstname.lastname@example.org or 855-4HR-LINE.