Terminations: Tips for Reducing Liability

“You’re fired!”

Donald Trump makes it look easy on his reality television show, “The Apprentice,” but savvy employers understand that workplace terminations must be carefully planned and executed to reduce the potential for costly legal claims.

For most employers, discharging an employee is difficult enough without the additional stress of a lawsuit for wrongful termination, discrimination, retaliation, or other claims under federal and state employment laws.

Employers too often subject themselves to unnecessary liability through hasty decision-making, inadequate investigations or common misunderstandings about the legal protections afforded to employees. By following a few basic principles, however, you can reduce the likelihood of successful claims against your company stemming from terminations.

Pre-Termination

Before discharging an employee for misconduct or poor performance, consider taking the following steps to determine whether a lesser punishment might be appropriate.

Find out what actually happened. Investigate the alleged misconduct by talking to witnesses and reviewing relevant records—such as production records, timecards, absentee reports and doctors’ notes—before reaching any conclusions. Consider whether the employee would benefit from special training.

Conduct a “due process” interview. Allow the employee a reasonable opportunity to tell his or her side of the story. In doing so, you may learn additional facts that are worth exploring. In addition, you will increase the perception of fairness toward the employee if a jury is ever asked to decide the merits of a subsequent claim.

Document your findings … with caution. For those who remember the television show “Dragnet,” don’t forget Joe Friday’s famous words: “Just the facts.” Stick to the facts and leave anything that could be construed as a personal opinion or legal conclusion out of your notes. Remember, anything that you write down might someday be viewed by a jury. Thus, a statement that “John clearly harassed Sally in violation of the company’s sexual harassment policy” may not be something you want to memorialize in writing.

Be consistent. Consider the bigger picture before imposing any type of discipline. You are setting a precedent for similar offenses in the future. For instance, if John was late in submitting his timecards and was merely suspended for a day, but Sally committed the same offense and was discharged, how will that look to a jury if Sally pursues a gender discrimination claim?

Termination

Letting an employee go is sometimes the only reasonable solution. While most states follow the “at will” employment doctrine, don’t be fooled into believing that terminations are without risk. Before discharging an employee, ask yourself:

*Does the employee have an employment contract? If so, have you reviewed it to see if your decision complies with its terms?

*Is the employee involved in union activity or covered by a collective bargaining agreement?

*Does the employee have a disability or medical condition? If so, have you offered the employee a reasonable accommodation or advised the employee of his or her rights under the Family and Medical Leave Act?

*Will the termination violate a state law or public policy against discharging employees—for instance, firing someone for attending jury duty, for filing a worker’s compensation claim, or for refusing to engage in an illegal act?

*Is there any inference of retaliation raised by the termination? For instance, has the employee recently filed a charge or otherwise complained of discrimination or harassment?

This list is by no means exhaustive, but if you find yourself answering “yes” to any of these questions, you should stop and reconsider the decision to terminate.

Post-Termination

Finally, remember that employees are owed certain obligations even after their employment ends. For instance, under the Virginia Wage Payment Act, a discharged employee’s final paycheck must be issued no later than the next regularly scheduled pay date.

Employers must ensure that applicable continuation coverage notices—as required by the Consolidated Omnibus Budget Reconciliation Act of 1985—are issued in a timely manner. In addition, courts have recognized that retaliation can occur even though the employment relationship has ended.

No employer is immune from claims related to a termination, but following the above guidance and working closely with your human resources department or legal counsel can greatly reduce your company’s exposure to potential claims.

Tevis Marshall is of counsel in the Richmond office of Ogletree Deakins.