Sometimes, you don’t know how lousy an employee was until he or she is gone. That may be when you find out about missing work, or even missing money. Or you may discover that the employee was essentially dishonest.
If that’s the fact, promptly document what you discovered—just in case there is a later lawsuit. Then be prepared to show that—if you had known then what you know now—you would have terminated the employee immediately. Don’t wait until after the lawsuit has been filed. Make a note in the personnel file right away.
Recent case: Richard Rinaldi was a corporate CEO who had an employment contract that guaranteed severance payments if he were terminated without cause. The agreement also required him to conduct himself with honesty.
The parties had a falling out, and Rinaldi sued for his severance payment.
The company said he had quit and had not been terminated. Then it discovered that Rinaldi had been booking travel using frequent flier miles, but then received reimbursement from the company for the flights as if he had paid full price. The scheme netted him more than $22,000. The company said the practice was dishonest and that it would have fired him if it had known.
The court said employers can use such after-the-fact discoveries to justify termination. However, the court didn’t buy it in this particular case, because the employer didn’t prove that it would have fired Rinaldi if it had discovered the scam. (Rinaldi v. CCX, et al., No. 09-1622, 4th Cir., 2010)