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HR’s Loose Lips Can Sink Your Company’s Defense

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Sometimes in HR, you know more than you want to know. But as this new court ruling shows, sharing inside information with an employee isn’t a smart move … for your employer or your career.

Case in Point: Laura Makowski, the marketing director for a Chicago law firm, took maternity leave under the Family and Medical Leave Act (FMLA). While she was out, the executive committee decided to eliminate Makowski’s position because "she did not fit into our culture."

The executive committee asked the firm’s HR director to run the decision by outside counsel. The outside attorney suggested they not only eliminate Makowski’s position but also another employee’s job, too. That way, they could label the event a “reduction in force.”

After Makowski was told of her termination, she came into the office to pack up her belongings. She ran into the HR director in the office lobby. The HR director pulled Makowski aside and shared a little secret, telling her the firing was really due to her pregnancy and maternity leave. The HR director allegedly added that "it might be a good idea to speak with a lawyer [as there] might be a possibility of a class action" because this has happened to other employees.

So Makowski did. Thanks for the tip off. Makowski sued for pregnancy discrimination and retaliation under Title VII of the Civil Rights Act and interference with her FMLA rights. So much for “parting gifts.”

What happened next? The HR director denied making the statement to Makowski. Even if she did, the employer argued, the statement would be “hearsay” evidence and not allowed in court. Makowski also asserted that she was not the decision-maker so she wasn’t involved in any of the allegations and, therefore, did not create the liability. The law firm also argued that Makowski was fired because no one liked working with her.

Result: The lower court ruled in favor of the law firm. But the appellate court reversed, rejecting the law firm’s defenses and sending the case to a jury to decide the truth. (Makowski v.  SmithAmundsen  LLC, 7th Cir.,11/9/11)

3 Lessons Learned…Without Going to Court

1. Watch what you say. It can and will be used against you in a court of law. You may be viewed as an agent of your employer and anything you say could be characterized as a party-admission.

2. Watch who you throw under the bus. Eliminating two positions at once does not necessarily create a legitimate reduction-in-force. That’s especially true if one employee is on maternity leave and the other was having performance problems, as in this case. This RIF smelled fishy.

3.  Watch out for “I didn’t do the firing” excuses. You don’t have to conduct the termination to create the liability. In this case, the court said the HR director was involved in the lawsuit because she sought an outside legal review and her general duties included actions related to the decision-making and compliance with federal anti-discrimination laws. She did not have to actually do the dirty deed to be a cause of the employee’s claims.

4. Do the right thing first. HR has a responsibility to guide management to do the right thing first and prevent illegal behavior from occurring in the workplace. The director of HR should have immediately gone to the executive committee with her concerns prior to any employment action being taken. That’s how to best protect employees. The HR professional did not go about this situation in the right way and it resulted in many jobs lost, a lawsuit and bad press.

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