Just How Badly Do You Need to Fire that Employee?
Can you say, "appearance of impropriety"?
On a regular basis, I get calls from companies that apparently found it essential to terminate an employee that had just announced she was pregnant, or one who had just requested a leave under the Family Medical Leave Act, or another who just filed a Workers Compensation claim, etc. In all cases, the employers swore to me that the termination had nothing to do with the pregnancy, FMLA request or Workers Comp claim, and I'm convinced that they were sincere.
You see, unscrupulous employees who know how to work the system will take actions to create the appearance of a wrongful termination when they know the ax is about to fall. Sometimes it is blatant to the point of being laughable. I was recently involved in a case where the employee, when summoned to her supervisor's office to discuss a major infraction, took a detour to Human Resources to claim sexual harassment. She didn't have much time to think up a story, so she reported that the sexual harassment she had suffered was seeing her supervisor hug another female employee -- a year earlier -- when that employee's mother had died. Silly yes, but that didn't keep her from claiming that her subsequent termination was retaliation for reporting this unforgivable "sexual harassment."
As an employer, you need to know that the deck is stacked against you if an employment claim goes to the jury. Most jurors do not know about at-will employment, and go into the trial with the preconceived notion that an employer must have good cause to fire an employee. Of course the judge will instruct the jury on the law of at-will employment, but if the jurors hear that you fired an employee for anything less than murder and/or mayhem, right after the employee, say, filed a workers compensation claim, you will be fighting an uphill battle.
The recent court decision of Crawford v. Metropolitan Government of Nashville and Davidson County provides a perfect example of, "what was the employer thinking?" There, the plaintiff employee was questioned about whether she had witnessed sexual harassment by a certain supervisor. She had never volunteered any information, but when specifically asked, she related two instances she had witnessed. Two other employees gave similar accounts.
All three employees were terminated after reporting what they had seen. Crawford sued for wrongful termination on a theory of retaliation, but the case was thrown out by the District Court on the grounds that she had not instigated any sort of investigation, but had merely answered questions. The Court of Appeals agreed, but the Supreme Court reversed the decision and sent the case back for trial. The Supreme Court correctly held (in my opinion) that reporting what she had seen was sufficient to bring her under the anti-retaliation provisions of Title VII. Back in the trial court, Crawford won $1.5 million in damages.
Clearly something was rotten in Nashville, and it certainly appears that justice prevailed. But the case illustrates the hubris of some employers. Don't engage in this type of behavior, of course, but also be aware of any facts that make it look like you are engaging in this type of behavior. Do you really need to terminate that employee who is out on a disability claim? Do you really need to terminate that employee that just broke off her affair with the boss? If his or her work performance is that bad, then document it along with any future infractions. If the employee is beyond redemption, their performance will justify the termination on a later, not so inopportune day. If not, then maybe the employee was not as bad as you thought, and you will have avoided trying to explain your way around some very bad circumstances. Some may view this as caving, but I view it as a pragmatic recognition that when it comes to a trial for wrongful termination, sometimes perception is reality.
For more information about the Crawford decision, read the excellent summary provided by attorney Ellen Simon here.
Don't Shoot Your Business in the Foot With Your Employee Handbook
Most employers and human resource directors are familiar with the concept of at-will employment, but may not know the statutory basis. In California, at-will presumption comes from a short and simple Labor Code. Section 2922 provides:
“An employment, having no specified term, may be terminated at the will of either party on notice to the other. Employment for a specified term means an employment for a period greater than one month.”
A contract that is for a specific term is by definition not an at-will agreement. If you hire an employee under a one-year contract, then you have agreed to employ that person for one year. You thus need cause to fire the employee prior to the expiration of the contract. Terminating without cause would be a breach of the agreement.
Any employee that does not have a contract for a specified term is thus presumed to be at-will. An employer does not need a contract stating that the employee is at-will or even a document signed by the employee acknowledging he is at-will. At-will employment is the default, absent a contract to the contrary. The mistake employers make is to do something to defeat the at-will presumption, and employee handbooks are fertile ground for such mistakes.
The pendulum swings with judicial interpretations of employee handbooks. At one time, employee handbooks were the bread and butter of employment attorneys, who used them to create employment contracts that defeated the at-will presumption. If the handbook provided for a disciplinary process, and the employee relied on that representation, it was argued that an implied contract had been created by the handbook. So, if the handbook provided that no employee would be terminated without first receiving a written warning, then it was a breach of the agreement if the employee was fired with no warning. Businesses responded by printing on page one of their handbooks that the handbook was not an agreement, and that the company was not required to follow its own policies.
That approach is effective only to a point. The courts are mindful and open to the mixed message argument. A classic misstep involves creating a probationary period. If your handbook states that an employee is probationary for their first 90 days at the company, then what do they become on day 91? The classic meaning of “probation” is a test period, where the employee can be fired without cause. Be definition, then, after that 90 days, cause will be required.
It is not enough that your employee handbook states that all employees are at-will, and that it is not at agreement, if there are still internal inconsistencies. After all, if your handbook states that employees can be terminated without cause, and then goes on to set forth what constitutes cause for termination, why should the first statement be elevated over the latter? You and/or your attorney should review every clause and make certain they are all consistent and achieve the intended result.
Next time, a few more handbook provisions that have tripped-up employers.
