In most states, workers are employed on an “at will” basis, meaning they can leave the company at any time. Conversely, employers typically retain the right to terminate workers at any time for any legal, nondiscriminatory reason.
But if the worker is under contract—including a signed employment agreement, a collective-bargaining pact or even an implied contract—employers can usually fire only for “cause.” Typically, that encompasses insubordination, nonperformance or dishonesty, or cases in which the employer must eliminate the employee’s position.
Not all states recognize implied contracts. But if your state does honor such agreements, any written or verbal statements alluding to job security may be construed as contracts.
Courts continue to chip away at the at-will doctrine, providing less flexibility to employers. This has led to an increase in wrongful discharge lawsuits.
Federal laws prevent organizations from firing employees because of their age, race, religion, sex, national origin or disability. Some states add other limitations, ranging from marital status to sexual preference.
“Whistle-blower rules” prohibit firing workers for reporting health and safety violations or for refusing to perform illegal acts. And in some states, courts will hold you liable for wrongful discharge if your firing violates “public policy,” such as firing someone for filing a workers’ comp claim or reporting to jury duty.
You also cannot fire an employee for complaining about discrimination or harassment, or for filing a lawsuit or EEOC claim. In 2007, the EEOC received 26,663 charges of retaliation for discrimination complaints. Of those, the EEOC resolved 22,265 to recover more than $124 million from employers. Firing employees after they have returned from federally mandated leave or filed a lawsuit or complaint against your company is almost certain to trigger retaliation charges.
How to comply
By taking a few simple steps, you can minimize your exposure to charges that you broke a contract, violated public policy, acted in retaliation or engaged in discriminatory practices.
1. Create a policy. Establishing a step-by-step process for discipline is the most reliable way to protect your organization from charges. Be explicit when outlining the behaviors that may trigger discipline and the actions you will take as a result. Spelling this out ensures that poor performers are treated fairly and consistently. Make it clear to all supervisors that they’re expected to follow the procedures. A written policy is a powerful defense in court.
2. Publicize your policies. Ensure that all employees and managers are on the same page by publishing your policy. Have employees read and sign it. In addition to providing documentation in case of lawsuits, this gives employees a chance to correct .
Advice: Regularly review all policies for relevance. Attendance and misconduct policies, for example, are always relevant, but your dress code may be outdated.
3. Conduct regular . Employees who are surprised by firings are more likely to sue. Also, employees often introduce in court inconsistencies between and adverse decisions to demonstrate that the company’s reasons for termination were just an excuse to fire employees for other, unlawful reasons.
4. Document all warnings. Develop forms for oral and written warnings. Use them religiously. Include a section that asks the manager to describe the problem and what the employee was asked to do to improve it, plus any warning about what would happen if the problem resurfaced. Finally, document what the employee said in response and ask the employee to sign it.
5. Educate supervisors about constructive discharge. Some managers try to sidestep the unpleasant task of firing by resorting to “constructive discharge.” The logic: If I make an employee’s work experience intolerable, he or she will choose to quit. This exposes your organization to charges of discrimination by the targeted employee. The employee will argue in court that he or she was singled out for special treatment.
6. Avoid firing employees in the wake of complaints. One test courts use to determine whether a worker was fired in retaliation for a complaint is timing. Firing workers just after they file a complaint or return from protected leave is asking for legal trouble. In such cases, it is best to wait and build an airtight case for dismissal before acting.
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