Tell a Friend

Your Name :
Your Email :
Email To :
Comments :

Human Resources Today is a new e-publication designed to help keep the Western University “Leadership Team” apprised of new trends, developments and body of knowledge in the Human Resources Management Arena. This column will include guest contributors that will appear on a periodic basis going forward.

THE LEGAL AND PRACTICAL IMPLICATIONS OF EMPLOYEE TERMINATION

Involuntary Termination of an employee requires consideration, planning and delicate handling. Wrongful discharge may prompt litigation which can result in punitive and compensatory awards.

Periodic job performance evaluation and written documentation are essential to controlling termination actions.

Most involuntary terminations occur for one of the three reasons: (1) unacceptable job performance, (2) misconduct, or (3) economic conditions. A comprehensive record of the reasons for an employee's discharge is crucial to a successful defense of a wrongful discharge action. While documentation of poor performance or misconduct is not legally required, the absence of documentation could be held against an employer. In poor performance and reduction in force cases, employers must rely on the employee's entire personnel record to illustrate the employee was incapable of performing the job.

The termination should be managed with empathy, respect and planned in advance.

Many organizations have policies and practices concerning poor performance by employees, but many managers in today's litigious society often neglect two key rules of Human Resource management:

• Managers should document all remedial efforts, including counseling sessions, probationary notices and warnings and:

• Managers should document both favorable performance and remedial efforts on an equal and consistent basis.

Managers who choose to supervise in a manner of the least challenge and commitment by rating all employees excellent or outstanding usually find great difficulty in justifying performance issue terminations in subsequent lawsuits.

Employee files should be reviewed periodically to determine if available documents are appropriate in making personnel decisions. Outdated materials should be removed in concert with legal counsel.

A progressive and rehabilitative approach which embodies a series of counseling steps must occur before termination occurs. Regardless of written disclaimers and at-will statements, it is important to show the basics of fair and humane treatment.

Severance benefits demonstrate the employer's desire to cushion the economic impact of termination. Judges and juries often view employers that provide severance pay and outplacement services as more humane and compassionate than those who discharge longtime employees with little, if any, severance/re-employment assistance.

Outplacement counseling commonly referred to as career transition, can be extremely helpful to the terminated employee in their re-employment efforts.

While outplacement assistance is not designed to reduce or eliminate lawsuits, there are trends that fewer employers using outplacement services end up in court.

Effective career transition counseling helps ease the fired employee's pain and helps redirect negative thoughts to positive actions through a well designed re-employment market campaign.

The use of an outplacement firm sends a signal to the remaining employees that the organization cares about the welfare of its employees.

Severance policies can be designed in such ways that are cost effective when compared to potential costly legal expenses, the erosion of the employee relations climate and negative publicity for the organization.

Recent six-figure jury settlements have prompted many organizations to be more sensitive to potential termination issues.

Since 2002 courts in 46 states have ruled that job security promises constitute legally binding contracts.

The outcome has been an explosion of lawsuits by employees, especially in liberal states.

Internal resolution dispute procedures, revised at-will statements in employee handbooks and job application forms and disclaimer statements are a few examples of action taken by organizations to enhance their immunity to litigated cases…all of which have yet to fully stand the test of legal challenge by a terminated employee.

Tantamount to the wrongful discharge issue are statements made by employers during the hiring process. Statements made in hiring letters, during interviews, or on job applications can be construed to be binding. Statements made in employment offer letters or in letters describing a position are particularly troublesome when they involve higher level executives who often leave lucrative positions in reliance on them. Employers also may be bound by statements made by executives, employment agencies, or other agencies that represent the organization in the recruitment process.

References to length of employment, service, the likelihood of continued employment, statements that allude to a long-term career, a working until retirement, job security, longevity or career paths should be avoided.

Interviewers should explain to all applicants that hiring, retention and discharge decisions are made on an individualized basis based on the facts and circumstances of each case.

Focus should be placed on the desirable aspects of employment with the company, such as a favorable work environment, competitive salary situation, comprehensive benefit programs, diversity of work assignments and job responsibilities.

A special effort should occur in assessing applicant skills, talents and track record. Sound hiring practices to include verification and background and references can be a successful deterrent to potential wrongful discharge litigation. The up front assessment of the potential new hire is the area probably most neglected by most organizations.

Although the employment-at-will doctrine exists today, it is but a shadow of its former self. In many states the exceptions have virtually obliterated the rule.

The prudent employer must monitor all terminations with care, documentation and in compassion to escape the legal mine fields already in place.

Reference: Without Just Cause, A BNA Special Report

Prepared by:

Howard M. Pardue, PhD, SPHR
Vice President, Human Resources/Compliance Officer
Western University of Health Sciences

8-21-2009