It seems to be an accepted view that the U.S. economy is in a recessionary state, with fuel prices on a steep upward slope, the residential housing market in a crisis related to rising interest rates and mortgages in default, and a number of other economic indicators trending negatively. In such times, many employers anticipate the need to reduce their workforce and make other decisions that lead to employee terminations.
Most employers understand that, unless there is a collective bargaining agreement or other such contract, employment is “at will,” meaning that there need not be a justification for the termination of an employee. At the same time, employers are well aware that employee terminations are often a source of litigation and, sometimes, result in decisions in court imposing significant liability, even when there is no contract granting tenure to the employee. When the employment relationship is at will, the law still prohibits actions for a number of reasons as a matter of public policy. When the time comes that an employee must be laid off or terminated, avoiding certain behaviors or statements can help reduce the chances of litigation or, when litigation cannot be avoided, an unpleasant result.
First and foremost, employers must avoid acting with motives that are unlawful. These include basing termination upon race, gender, religion, national origin, age, and disability. In hard economic times, it is often the employer’s goal to reduce costs, and employees who draw a higher wage are sometimes selected for elimination because of this. Even though the higher wage may be related to length of service (and older employees tend to have served for longer periods), this expense consciousness is not unlawful age discrimination. Employers must be careful, however, to insure that the decision is based on expense, as opposed to making assumptions about savings based on the age of the employees involved.
Similarly, when evaluating who is best qualified to remain employed in a reduced workforce, it is important to remember that a disability cannot be viewed as making the employee less qualified if the employee can perform the essential functions of the job or a reasonable accommodation for the disability allows the employee to perform those functions.
In addition, managers should use caution when making statements in connection with the termination process. Asking questions that relate to whether the employee intends to continue working may indicate assumptions about age or anticipated pregnancy. Some managers attempt to reassure an employee that his or her termination is not related to his or her membership in a protected category, but these kinds of statements may only cause the employee to suspect that it is. Less is often more when explaining the reasons for termination in a reduction-in-force situation.
Apart from what is disclosed to the employee at the time of discharge, the reason for termination should be well documented in the employer’s files. Without doubt, it is recommended that the employer be able to prove its non-discriminatory reason for a decision, but managers sometimes get into trouble in their zeal to create supporting documents for their actions. In many employment litigation situations, an inference of unlawful intent is allowed when there is evidence that the reasons offered by the employer turn out to be false or distorted. If the employee can produce evidence that negative statements in performance evaluations are false, this inference comes into play.
Illegal motives are not necessarily the only reason for misleading statements by managers. If a manager decides to retain a friend over another more qualified employee, it may be a perfectly lawful reason. Friendship has never been made an unlawful motive for employment decisions. But, if the manager is embarrassed to admit this motive, he or she may decide to write a review that suggests the reason for the decision was performance. When the terminated employee later shows that his performance was unfairly criticized, the inference will be that there was an unlawful motive, and the friendship explanation will ring hollow due to the falsified explanation. There is no faster way to find trouble than to be caught in a falsehood.
Employee terminations raise complex issues and are often the source of anxiety and legal exposure for employers. They are, nevertheless, often unavoidable, especially in a declining economy. Employers are advised to consult counsel before implementing decisions where the potential for a claim may be present.
The following article is informational only and not intended as legal advice. Speak with a licensed attorney about your own specific situation. © Copyright 2011 MacElree Harvey, Ltd. All rights reserved.
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