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4 WWW.BASICONLINE.COM – 800.444.1922 The Employment Relationship On its face, the employment contract is very simple. Employer sets wages, hours and working conditions. Employee shows up at the appointed time, works as directed and receives compensation for it. Both sides can walk away at any time.
5 WWW.BASICONLINE.COM – 800.444.1922 The Employment Relationship The Employment Relationship is one of the most heavily regulated contracts any business enters into. State and federal legislatures, and some municipalities, have imposed hundreds of legal obligations on employers that govern pay, benefits, insurance, job safety, hiring and firing.
6 WWW.BASICONLINE.COM – 800.444.1922 The Employment Relationship The federal government and almost all states accept the definition that the employment relationship is “at will” and that the employer and employee have an equal right to end it at any time for any reason. Your business must have an HR policy manual that clearly tells employees their employment is “at will” and defines to employees what that means.
7 WWW.BASICONLINE.COM – 800.444.1922 The Employment Relationship Exceptions: –Notably in Montana and California, so be aware if you have employees in either state. –Some states have quirks on how they interpret this “at will” concept –It is a good idea to familiarize yourself with what your state says on this issue. –Government employees and members of a collective bargaining unit (labor union) are not “at will” employees. Today’s discussion does not apply to them.
8 WWW.BASICONLINE.COM – 800.444.1922 The Employment Relationship The decision to fire an employee is a complex mix of legal and factual issues that need to be thoroughly considered before telling the employee he or she is discharged. Rushing the decision or basing it on less than a full understanding of the facts and applicable laws leads to verdicts against employers, not to mention the cost of defense. Be careful, but don’t be afraid to make a decision.
9 WWW.BASICONLINE.COM – 800.444.1922 The Employment Relationship While almost all employees are “at will,” employers are legally prohibited by federal, state and municipal law from firing workers for discriminatory reasons. These “protected statuses” are as follows.
10 WWW.BASICONLINE.COM – 800.444.1922 Protected Statuses Under federal law, it is illegal to terminate someone on the basis of their race, sex (including pregnancy and sexual harassment), age, national origin, religion, color or disability. State laws generally mirror federal law but add some other protected statuses such as sexual orientation, military or veteran status or marital or parental status. Check your state and local laws to be sure.
11 WWW.BASICONLINE.COM – 800.444.1922 Protected Statuses It is also illegal to retaliate against employees by terminating or disciplining them when they have asserted their rights under these laws either on their own behalf or a co-worker or if they are “whistleblowers” who have reported illegal activity by the employer.
12 WWW.BASICONLINE.COM – 800.444.1922 Protected Statuses Federal law and some states also protect workers from being fired when they have taken leave for military service or who qualify for leave under the Family and Medical Leave Act. Employees are guaranteed their positions upon returning from leave and may only be discharged when business circumstances have changed significantly. Terminating someone with these reinstatement rights will subject your company to a lawsuit.
13 WWW.BASICONLINE.COM – 800.444.1922 Protected Statuses Your company HR manual must have policies on compliance with these laws as well as a code of conduct outlining the level of discipline for violations of workplace rules. Every employee must receive a copy and have signed off on receipt. Whether they read it is up to them.
14 WWW.BASICONLINE.COM – 800.444.1922 A Hypothetical Situation You’re the VP of HR in a company with 300 employees. A newly hired officer calls you up and says he has a terrible employee he needs to get rid of right away. He assures you he has reviewed the situation thoroughly and that discharge is fully justified. He is most insistent that the employee be fired immediately.
15 WWW.BASICONLINE.COM – 800.444.1922 A Hypothetical Situation Upon further questioning you learn that the employee is a minority with ten years of service and is known throughout her unit as “high maintenance.” She repeatedly challenges management’s decisions and threatens to file a lawsuit if she doesn’t get her way. What do you do?
16 WWW.BASICONLINE.COM – 800.444.1922 A Hypothetical Situation The first thing you must do is advise the employee’s manager that it is company policy to fully review a situation before employee terminations. Ask for all relevant data, including the employee’s complete personnel file, correspondence and performance appraisals. You also need to see any evidence the manager has to support the reason for discharge.
17 WWW.BASICONLINE.COM – 800.444.1922 A Hypothetical Situation Ask for any documents the manager keeps in a “desk file” on his employees. These documents will form the basis for the company’s defense and must be thoroughly examined to see if the record supports the manager’s contentions about the employee. The employee’s lawyer will ask for and review all these documents if there’s a lawsuit and will use them against you. You must know what they say.
18 WWW.BASICONLINE.COM – 800.444.1922 Steps to Protect Your Business Once you’ve assembled all the relevant data, look closely at them with a critical eye to see if they support the manager’s claims for wanting to fire the employee. Do the appraisals criticize the employee’s performance deficiencies? Are the appraisals objective or based on a manager’s opinion? Objective information is better.
19 WWW.BASICONLINE.COM – 800.444.1922 Steps to Protect Your Business Did the employee have consistently strong performance appraisals until the new manager arrived? What is different now that causes the manager to downgrade the employee’s performance? Is there a personality conflict between the employee and the manager? Do you believe that the conflict might be based on some illegal motive? Be blunt with the manager in asking these questions since he may have to do so under oath someday.
20 WWW.BASICONLINE.COM – 800.444.1922 Steps to Protect Your Business If there is a violation of the code of conduct, what do the statements of witnesses say about it? How was the manager aware of the violation and what proof does he have? Is the evidence written or oral? Is the evidence believable?
21 WWW.BASICONLINE.COM – 800.444.1922 Steps to Protect Your Business Are there other employees in the unit who are non-minority who committed a similar violation? What level of discipline did they receive? Treating one employee differently from another will result in a finding against the employer. This “disparate treatment” is what the EEOC looks for and it will cause either the EEOC or a jury to find against your company.
22 WWW.BASICONLINE.COM – 800.444.1922 Steps to Protect Your Business Does the manager have a history of having “pets” among his employees? Is he known for disliking certain employees for no reason? Is there any suspicion of bias by this manager in the treatment of his employees? Is the manager personally involved with someone in his department? What do the other employees say about the manager as well as the employee being considered for discharge?
23 WWW.BASICONLINE.COM – 800.444.1922 Steps to Protect Your Business Has the employee been warned about other performance issues or rules violations? If so, what has her response been? Does she accept responsibility or shift blame to co-workers? Does she always have an excuse for absences, tardiness, missed assignments or poor performance? Are the warnings documented?
24 WWW.BASICONLINE.COM – 800.444.1922 Steps to Protect Your Business What does the employee say when she threatens to sue? Is she using the threat to deflect justified criticism or are there valid complaints?
25 WWW.BASICONLINE.COM – 800.444.1922 Steps to Protect Your Business After reviewing everything it is important to meet with the employee to get her version of the events leading up to the possible decision to discharge her. Be very frank about her deficiencies and tell her this is her opportunity to correct any misstatements. Let her talk but don’t let her ramble into irrelevant territory in an attempt to muddy the water. Keep her focused on the issue at hand.
26 WWW.BASICONLINE.COM – 800.444.1922 Steps to Protect Your Business Meet again with the employee’s manager and discuss the strong and weak points of the documentation he has assembled. The decision to discharge must be supported by a clear and well documented factual record. Remind the manager that if the employee brings a lawsuit he is the star witness for the company and will have to defend his decision in the face of cross examination from the attorney for the employee. Now is the time to assemble the strongest case, not when the case goes to trial.
27 WWW.BASICONLINE.COM – 800.444.1922 Steps to Protect Your Business Remember: –There can be no evidence of personal bias on behalf of the manager or co-workers. –The enforcement of company rules must be consistent and the discharged employee should have the opportunity to offer a defense.
28 WWW.BASICONLINE.COM – 800.444.1922 Steps to Protect Your Business In order to win a discrimination case the US Supreme Court requires the employer to “articulate a legitimate business reason” for taking the action that it did. If the employer has documentation of the reason for discharge and has consistently applied standards of conduct, you will likely win the case either before the EEOC or a jury. If you don’t have either of those or even just one, the company’s chances of prevailing are much less. Losing could cost your company back pay and benefits, reinstatement of the employee to her old job and payment for all her attorney’s fees and costs.
29 WWW.BASICONLINE.COM – 800.444.1922 Termination Rules to Live By Never authorize an individual manager to make termination decisions alone. Make sure HR and a higher up has input into the decision. Have a neutral, objective third party, preferably your employment lawyer, review the situation prior to discharging the employee. You need someone who is not emotionally invested in the decision to take a hard look at the facts and the law and give you an objective assessment of the risks.
30 WWW.BASICONLINE.COM – 800.444.1922 Termination Rules to Live By Never transfer a problem employee in the hopes that a change of scenery or manager will alter his behavior. Doing so will only embolden the employee with the perception that he has the upper hand. Never allow an employee’s threat to file a lawsuit to dictate your decision. If you cave, you can only expect more trouble from this employee.
31 WWW.BASICONLINE.COM – 800.444.1922 Termination Rules to Live By Document everything, but make sure you’re doing it with valid records assembled in the course of business. If a jury or the government has the sense that the employer is fabricating evidence to pick on a particular employee, you will lose all your credibility as well as any lawsuit. Take your time. Review the evidence. Don’t accept anyone’s assurance on what the document says without looking at it. You can take an employee of out service pending a decision if need be.
32 WWW.BASICONLINE.COM – 800.444.1922 Termination Rules to Live By You MUST have a current policy manual that reflects all changes to the law on both the state and federal level in the last three years. If you are ever reviewed by the EEOC this will be the first thing they ask for. If you don’t have one or are using one that’s outdated, investigators will view that as a sign the company doesn’t take its legal obligations seriously.
33 WWW.BASICONLINE.COM – 800.444.1922 Termination Rules to Live By Be consistent in the enforcement of all company rules and expectations for conduct. Address any biases you perceive immediately even if you must do so with higher up managers. HR needs to have a role as the judge of how rules and performance standards are applied company-wide. Appearances matter.
34 WWW.BASICONLINE.COM – 800.444.1922 Termination Rules to Live By Once you’re satisfied the record supports a discharge, assemble any documents like COBRA information and discharge notice and meet with the employee face to face as soon as possible. The discharge meeting is to notify the employee and not a time to debate the merits of the decision. It should take no more than three minutes. If the employee wants to argue just tell him the decision has been made and is final.
35 WWW.BASICONLINE.COM – 800.444.1922 Termination Rules to Live By Even if you don’t discharge the employee now due to lack of documentation, be patient. Bad employees usually don’t correct their behavior. If you document further problems you will likely have a reason for discharging the employee later.
36 WWW.BASICONLINE.COM – 800.444.1922 EEOC Procedures What to do if the employee files a discrimination charge with the EEOC or a similar state agency: –Don’t panic. You’ll receive a notice in the mail with a copy of the discrimination “charge” setting forth the employee’s allegations. –Employees have between 180 and 300 days to file a discrimination charge, so don’t assume the passage of time has diminished the merits of the employee’s case. Keep all documents available.
37 WWW.BASICONLINE.COM – 800.444.1922 EEOC Procedures What to do if the employee files a discrimination charge with the EEOC or a similar state agency: –Let everyone involved in the discharge decision know that a charge has been filed. Tell them they are legally required to preserve all documents relating to the allegations. –Contact your employment lawyer for help in fashioning your response to the charge. This is in the form of a “position statement” that sets forth the company’s reasons for firing the employee and why the allegations of discrimination are untrue. You will also submit any documentary evidence at this time.
38 WWW.BASICONLINE.COM – 800.444.1922 EEOC Procedures What to do if the employee files a discrimination charge with the EEOC or a similar state agency: –The position statement is a critical document in that it sets forth on the record exactly why the company determined to fire the employee. This is your first, and possibly only, chance to do so and will form the basis for your defense throughout the investigative process and any lawsuit later. If you make misstatements or offer unsupported evidence the employee’s lawyer will seize on that and make the company look foolish at trial. TAKE YOUR TIME AND GET IT RIGHT.
39 WWW.BASICONLINE.COM – 800.444.1922 EEOC Procedures What to do if the employee files a discrimination charge with the EEOC or a similar state agency: –If you need more time to respond, ask for it. The EEOC will give it to you. –Be prepared to wait. The investigative stage of the discrimination charge process can take up to 18 months. The former employee can ask for a “right to sue” letter and end that process but that’s not common.
40 WWW.BASICONLINE.COM – 800.444.1922 Any Questions? Presented by: Lawrence M. Donoghue Practice Concentrated in Labor and Employment Law Tel 847-509-9177 Ldonoghue@Ldonoghuelaw.com