Discriminating behavior

With the myriad of federal and state
laws protecting employees, employment-related lawsuits have steadily increased in our litigious society.
Since anyone can file a lawsuit and allege
anything, lawsuits by current and former
employees cannot be completely avoided.
However, they can be reduced in number
and potential exposure can be minimized.

“Certain claims are completely fabricated,” says J. Ronald Ignatuk, a partner in the
law firm of Shulman Hodges & Bastian
LLP. “But other cases present egregious
conduct, not only by employees and supervisors but by the very HR department
charged with investigating and remedying
the improper conduct.”

These lawsuits are significantly impacted
by the policies and procedures instituted
by the employer and whether or not those
policies are strictly followed.

Smart Business spoke with Ignatuk
about ways that employers can minimize
discrimination and wrongful termination
lawsuits by former employees.

Please explain what is meant by ‘wrongful
termination.’

While an employer can terminate an ‘at-will’ employee for no reason or for any
number of reasons, the employer may not
terminate an employee for an improper
reason, such as age, gender, race, disability,
religion or national origin. If this occurs,
the employee has a claim against the
employer for wrongful termination.

However, the employer does not have to
fire the employee to be subject to a claim
for wrongful termination. If the employee
is subjected to a hostile environment in the
workplace that would be intolerable to a
reasonable person, such as continuous and
severe sexual harassment, and this causes
the employee to quit his or her job, the
employee can bring a lawsuit for ‘constructive termination.’ In other words, the law
treats this situation as if the employer actually fired the employee. If the employee
proves that the work environment was
intolerable, the employer is liable to the
employee to the same extent as if the
employer fired the employee for an
improper purpose.

What exposure does an employer face when
sued for discrimination or wrongful termination?

First, unless the employer has insurance
coverage for these types of claims, the
employer may incur significant attorney’s
fees and costs in defending the lawsuit. If
the case goes to trial and the employee prevails, the employer could be held responsible for all damages caused by the discrimination or wrongful termination. These
damages could include emotional distress,
lost wages — both past and future — and
medical care, including psychiatric treatment. If the conduct is sufficiently egregious, the jury could award punitive damages against the employer, which are above
the amount to compensate the employee,
and serve as a form of civil fine to punish
the employer and make an example in
order to deter others from similar conduct.
Finally, the employer could be required to
pay the employee’s legal fees.

How can the employer minimize discrimination and wrongful termination cases?

First, the employer should establish a
zero-tolerance policy regarding all forms of
discrimination. The policy should explicitly state that violation of these polices will
result in immediate discipline, up to and
including termination.

Second, the employer should have a procedure for reporting discrimination that
does not involve the alleged perpetrator
and that is handled as confidentially as possible under the circumstances. Employees
should be informed that there will be no
retaliation for reporting discrimination.

Third, the human resources department
should have a procedure in place to
promptly investigate all forms of discrimination, including interviewing the victim,
perpetrator and all witnesses.

Fourth, the HR department’s response is
critical. When there is a complaint, the
employer has an obligation to promptly
investigate and take remedial action. The
appropriate remedial action depends on
the nature of the complaint and what the
investigation reveals.

These policies and procedures should be
contained in the employee handbook distributed to all employees. The employee
should sign a receipt after the handbook is
provided to him or her.

Finally, every employer should retain a
knowledgeable employment law attorney
who can create materials or review materials created by the HR department.

What should the employer do if it intends to
take a negative job action against an employee for a legitimate reason?

In order to minimize the chance that a
lawsuit will be filed — or if it is filed, to
maximize the chance of obtaining a favorable outcome — the employer must document the legitimate reasons for the negative job action.

If the employee is performing poorly,
chronically late for work, insubordinate,
etc., written warnings should be provided
to the employee by the HR director or stated in the employee’s file. The warnings
should be specific, provided to the employee with another witness present and signed
by the employee. Then if termination is
necessary, the employer has a well-documented legitimate defense to a claim of
wrongful termination. These warnings may
make the employee reluctant to claim discrimination and will serve the employer
well in court should a lawsuit be filed.

If the employer is truly concerned about
a lawsuit, he or she can offer the employee
a severance package in exchange for a
release of all claims. It is advisable to have
an attorney prepare this document.

J. RONALD IGNATUK is a partner at Shulman Hodges &
Bastian LLP. Reach him at [email protected] or (949) 340-3400.