“The cost of good employee relations is minimal compared to the cost of defending against a lawsuit,” he says. “Litigation often can be avoided if employers implement good strategies for discipline and performance management before a discharge ever occurs.”
Smart Business spoke with Grimaldi about steps employers should take long before a termination occurs and ways employers can protect themselves from employment litigation.
What steps should an employer take for terminating an employee to best protect the company from a lawsuit?
The steps should begin at the time the employee is hired. Employers should have an employee handbook that covers things like disciplinary procedures, performance reviews, terminations and other important policies and procedures. Of course, the key is to not just have a set of policies and procedures, but to follow them and enforce them consistently from employee to employee.
In most jurisdictions, employers can hire and fire someone for basically any legal reason with certain exceptions. However, employers are vulnerable when they do not have a valid, nondiscriminatory business reason for terminating someone.
When it appears that an employee is on a path to termination, employers should focus on being objective with the employee. Stay away from statements that could be construed as defamatory or personal attacks. Rather than state that someone isn’t a team player, employers should be prepared with specific examples to demonstrate that point. Unless the termination is based on some act of misconduct, employers should try to keep the discussion focused on the duties of the job. Lastly, it’s essential to utilize a progressive disciplinary process so that the employee is made aware of the employer’s expectations and also the consequences of not meeting them. This forces the employee to take responsibility for the performance problem or conduct and provides him or her with an opportunity to improve, while at the same time creating the proof necessary to defend against a challenge to the employer’s action.
How should employers communicate with employees about disciplinary or other concerns that might eventually lead to termination?
It really boils down to maintaining an open and ongoing dialog and being honest with employees when problems or concerns arise. Good employers are consistent in yearly performance reviews, and they make sure there’s good informal communication throughout the year between the employee and his or her supervisor.
The more fair and transparent the process, the less likely employers are to find themselves in a litigation situation. And if they do, they will be more likely to be successful in defeating the challenge. It all goes back to the concept of maintaining good employee relations.
How should employers document discipline issues and other concerns?
There is a perception that if something is written, it’s true; if something is typed and written, it’s really true; and, if something is typed and written on a form, it’s really, really, true.
The point is that communication about employee performance should always be documented and the documentation should confirm that both parties understand the issues that were discussed and the steps to be taken as a result. This is true whether the documentation consists of notes made contemporaneous to an informal discussion, or is a form utilized during a formal performance review or disciplinary action.
How can employee handbooks help employers protect themselves when disciplining or terminating an employee?
It is certainly easier to be fair with employees when an employer has a handbook to rely upon for guidance. Employers should know and understand what is contained in their handbook and work rules, and be prepared to consistently adhere to the letter and spirit of both.
How can employers defend themselves if a terminated employee files a lawsuit?
Employers can’t stop an angry former employee from suing, but they can prepare strategically to defend and win a lawsuit if they practice good employee relations. This includes, from time to time, auditing employment practices; reviewing policies, handbooks and work rules; and, always communicating with employees.
RICK GRIMALDI is counsel at the law firm of White and Williams LLP. Reach him at email@example.com or (215) 864-6350.