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Preparing for possible litigation

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in Employee Benefits Program,Firing,Human Resources

Q. We recently had to discharge an employee for poor work performance. We are a relatively small company (70 employees) and don’t often fire people. Because of special circumstances that forced us to terminate the employee rather than try corrective action, we think it is very possible there will be some kind of litigation. Do you have any recommendations for what we should do or think about now, even before any lawsuit has been filed?

My first recommendation would be to consult with your labor attorney if you have not already done so. Generally speaking, you want to make sure that you have preserved any documents or other evidence that you would need if you had to tell your story in court.

If certain employees have knowledge of specific facts that you think are important, you may want to preserve that information with written statements or even affidavits while their recollections are fresh. Written statements are discoverable (meaning the plaintiff employee would have access to them), so prepare them carefully.

You should be aware that, if you can reasonably anticipate litigation (any litigation, including employment), the Federal Rules of Civil Procedure require you to suspend any document destruction procedure that you have in place that would result in the destruction of relevant information. This includes electronic information such as e-mails.

You may want to pay particular attention to how you handle any unemployment compensation claim. While unemployment compensation proceedings are not usually admissible in court proceedings, you may want to have legal counsel present to develop testimony under oath from the terminated employee before he or she has filed
a lawsuit and has thought about how to couch his or her testimony. You also don’t want your employees testifying at an unemployment compensation hearing without having thought through how they should respond to questions that may be asked.

Consider how you intend to respond to employment inquires from prospective employers. Make sure responses to such inquires come from a single person in the organization. Some prospective employers will call supervisors directly to avoid standard company responses, or your former employee may identify individuals within your organization as references. Make sure everyone within the company understands that any inquiry is to be responded to by only one individual. No exceptions!

Finally, if it’s not too late, you may want to consider entering into a severance agreement with the former employee. Sometimes something as simple as a neutral reference or an agreement not to contest unemployment compensation benefits is all it takes to avoid a lawsuit. An ounce of prevention is worth a pound of cure. 

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