EMPLOYEE RELATIONS: How to Discharge An Employee...and Stay Out of Trouble While You're Doing It

None of us likes to do it, but every contractor must eventually face up to the unpleasant task of terminating an employee. "Firing people is one of the toughest things you do as an employer," says James Walsh in his book, Rightful Termination.

Now, with the increased risk of legal complications, handling that dreaded responsibility is more challenging than ever.

When you’re faced with the need to discharge an employee, it’s important that you keep yourself aware of the legal pitfalls involved.

Every year, thousands of employers are hauled into court by workers claiming they were fired illegally. Many of those ex-employees are winning substantial judgments. Because of inherently high turnover in lawn and landscape work, your exposure to this risk is perhaps higher than it is in most industries.

An English Common Law doctrine known as employment-at-will used to be widely recognized here. It meant simply that an employer had the right to fire an employee for any reason — or for no reason at all. We’ve all heard stories about people being fired because, ". . . I just don’t like you." Not any more. Lawsuits are popping up everywhere, and many employers are facing costly legal penalties for firing employees "without sufficient cause." "Employees have many rights they didn’t have a century ago," cautions Walsh.

Attorney James McElligott, Jr., McGuire-Woods, Richmond, Va., offers this story from early in his career: "I received a call from an irate client who wanted to know if it was illegal to fire an employee for sleeping on the job. ‘I’ve received a charge from the EEOC accusing me of sex discrimination for firing a woman for sleeping on the job,’ he told me.

"I asked if any other employees had been permitted to sleep on the job. ‘Of course not,’ he replied. I suggested the employer check with his supervisors just to be sure. 

"Half an hour later, the employer called back sheepishly. ‘The week before I fired the woman for sleeping on the job, we had a big project and one of our best workers – a man – worked until 1 a.m. on the project and then showed up for work at his regular time. By afternoon, he was nodding off at his desk. His supervisor told him to punch out but didn’t discipline him.’"

"Fortunately," says McElligott, "we were able to settle the matter by giving the employee who filed the charge two week’s separation pay in exchange for a complete release."

While you aren’t likely to face this specific problem in the operation of your business, the story illustrates the unlikely complications that lie in wait any time you must terminate an employee.

What you should be especially concerned about is the risk of lawsuits based on some form of discrimination. "Every employee has a race, a gender, a religion," says attorney Beth Schroeder, Silver & Freedman, Los Angeles, Calif. "So, every employee, even new and probationary ones, fall into at least one so-called ‘protected’ class." 

"It costs nothing for an employee to file a charge with the EEOC or state fair employment practices agency," cautions McElligott. "State and federal agencies can investigate employers for retaliation charges based on OSHA, wage & hour, environmental, FMLA, or other violations. In addition to the expense of legal fees, employers often must spend hours trying to reconstruct and justify their actions. The moral: Do it right the first time."

Follow these suggestions to help you to avoid a wrongful termination lawsuit:

1. LAY A SOLID FOUNDATION. Avoiding termination problems begins with the hiring process. "At the beginning, tell your employees specifically what you expect from them," McElligott says. "Put your expectations in writing, so there’s no misunderstanding later."

2. KEEP COMMUNICATION LINES OPEN. Many wrongful termination lawsuits are traced to a misunderstanding on the part of the employee. Often, that misunderstanding involves the reason for the termination. "Many employers have the impression that the less they communicate to an employee about the termination, the better," Schroeder says. "My 18 years of experience in both counseling employers and defending lawsuits suggests otherwise. The more an employee understands about where he or she stands, and the reason for the employer’s actions, the less angry, frus-trated and suspicious the employee is likely to become. It is those emotions that drive terminated employees to attorneys. Employees who are terminated with little or no information about the reason assume that they have been kept in the dark purposefully – that there must be an unlawful or ulterior motive."

3. PUT IT IN WRITING. Experts agree that careful documentation in writing is an essential part of every employee termination. Incidents or behavior leading up to the termination should always be recorded at the time of the incident, or as soon thereafter as possible. The documents should be respectful to the employee, but detailed, listing events or issues in a logical or chronological order.

"At the very least, you should put the specific reason for the termination in writing," Schroeder says. "The employee is likely to be emotional and upset and may not hear what you said in the exit interview. If the terminated employee goes to a lawyer, the lawyer will hear the story in the employee’s words, evaluating whether to take the case on the basis of the employee’s description. In that case, the attorney may not hear your side of the story until after a lawsuit has been filed."

"If you are basing the termination on a specific event (theft, assault on a fellow employee, insubordination, careless damage to client’s property, etc)," McElligott says, "you should make a careful investigation of the facts, take notes on your interview of witnesses, and be sure to give the disciplined employee an opportunity to submit a written statement in his own words.

"Writing a termination report with details on past warnings, efforts to resolve the problem, and furnishing a copy to the employee, are effective ways to help reduce your chances of being sued for wrongful termination."

4. BE CONSISTENT.  One of the most dangerous legal pitfalls for an employer is a charge of inconsistent disciplining or enforcing of rules. One of the most common is the charge that one set of work rules was used for men and a different set for women.

"It’s important for you to know at least the basics of employment and labor law," McElligott says. "No discrimination based on race, gender, religion, age, disability or other protected status is allowed under the law. Know about your duty to accommodate employees with disabilities. Know the rules on protected status under USERRA, workers compensation, FMLA and other applicable laws. If you have any doubt about the circumstances, get legal counsel before you terminate an employee."

5. CONDUCT REGULAR EMPLOYEE EVALUATIONS. Your employees are legally entitled to be kept informed on how well they are meeting your expectations. This is true even if you have only one or two employees. Your failure to meet this requirement may have no consequences unless and until a terminated employee files a lawsuit claiming that you made no prior attempt to inform the employee of your dissatisfaction.

Your employee evaluations can be written in simple language; they do not have to be elaborate or follow any specific format. But it is always best if you put them in writing.

Attorney McElligott advises, "Your employees are entitled to know whether or not their performance meets your expectations. In this regard, it helps to make a written record for future reference if that should prove necessary. Always be consistent in evaluating and disciplining your employees, and review previous evaluations and discipline if any have taken place."

6. DEAL PROMPTLY WITH PERFORMANCE PROBLEMS. Because the task is so unpleasant, many employers find reasons to delay firing a problem employee: "Perhaps the employee will improve. Perhaps I’m being too hasty. Perhaps living with the problem will be easier than trying to find a replacement."

If you’ve done a good job of following the guidelines and if you’re confident that a termination is justified, delaying the action is probably not in your best interest. "Not firing a problem worker is often the worst thing you can do," Walsh says. "It keeps the problem worker around to create more trouble, making a bad situation worse. That’s not fair to you or to your other employees."

"Don’t procrastinate or wait for the next evaluation," McElligott adds. "Do it now."