YOU’RE FIRED
Sexual harassment,
defamation, ADA, EISA, whistle blower statues, etcetera are all
employment practices issues that should be addressed by all companies in
some way, but wrongful discharge procedures and practices must be
addressed. Lawsuits are six times as likely under this category than any
other issue. Below is a true situation that recently occurred. See if
anything seems familiar. A list of strategies to help curtail this type
of suit follows the story.
Bill worked for an
electronics firm for over 15 years. He is 52 year’s old and works in
Southern California. Over the years, Bill has received very good reviews
and regular salary raises that have placed him at the top of his salary
classification. He is well thought of by upper management. In 15 years,
Bill has seen many supervisors come and go. As part of the quality
assurance department, supervisors have used the position as a stepping
stone to even higher positions.
About 1 ½ years ago, Bill
got another new supervisor, Bob. Bob was 20 years younger than Bill and
was anxious to make a name for himself in the company. We were now in
the 90's and watching and increasing the profit margin was imperative.
Bob also knew that Bill made a lot more money than he did and this
bothered Bob a lot since he was in a "superior" position. When Bill got
his first review from his new boss, it was less than sparkling. He had
never received a poor review and his work habits had not changed at all.
He worked long hours, often hooking his home computer into the work
computer by modem so he could do some extra work, 9:00 at night. Another
year passes (Bill figured he would have a new boss before the next
review) and Bill still has the same boss. The new review still appraises
Bill as a very mediocre performer. Bill is very unhappy, feels that he
is being mistreated and gets only a token 2% raise.
A month later, Bill is
informed that they are eliminating his job, but Bob generously reminds
him that he can accept a job elsewhere in the company. Everywhere Bill
applies within the company had a reason not to hire him. He knew that
his supervisor was sabotaging his ability to move within the company.
Another department would, of course, call Bill’s existing boss for
general references. The final blow was when he was told he was not
qualified for a job that he held for his first 4 years with the company!
It couldn’t be any more blatant, he was no longer wanted. Bill was given
six months paid severance but left after 15 years with a bad taste in
his month. Frankly, he knew he was really screwed.
The job market in
Southern California for electronics experts was very tough with all the
aerospace engineers laid off looking for similar positions. Bill,
getting very discouraged, decided to consult an attorney about a
wrongful termination suit. The attorney felt the had an excellent case
and would accept it on a contingent basis.
Any of this seem possible
in your company? Maybe you can provide your own horror story, but what
can your company do to help protect itself from receiving a wrongful
termination suit? Below are some important suggestions that should be
implemented into your company’s policy:
SPECIFIC STRATEGIES FOR WRONGFUL
DISCHARGE:
- Take steps to resolve problems that
can lead to termination.
- Require direct supervisors to obtain
top management’s’ approval before initiating any discharge action.
- Require complete documentation of
the reason(s) for discharge.
- Review all written company policies
and documents that address termination or layoff to ensure they are
current and do not convey any impression of guaranteed long term or
permanent employment.
- Define the organization’s employee
conduct expectations and make sure they are reasonable and
attainable. Eliminate the language "just cause."
- Document critical incidents, such as
hiring and exit interviews, disciplinary actions, performance
reviews. Require employees to sign forms stating they have received
and understand the information
- Handle performance evaluations
carefully. Ensure supervisors are completely candid in their
appraisals. Wrongful evaluations can lead to wrongful discharge
suits.
- Develop a written progressive
discipline policy. The existence of such a policy will help
demonstrate fairness in the event of a wrongful discharge suit.
- Appoint someone within the
organization who is responsible for objectively reviewing all the
factors relating to a firing.
- Thoroughly investigate the facts
before dismissing any employee. These include the employee’s age,
the strength of the evidence, the consistency of your application of
policies,and whether the employee was give the opportunity to
present their side of the story.
- Be sure that the discharge notice
candidly states the reasons for the dismissal, and avoids statements
that might be viewed as defamatory.
- Give employees an opportunity to
respond to any misconduct charges and provide a means for appealing
discharge decisions.
- Ensure that the discharge is
properly conducted. Be mindful of an employee’s dignity and
confidentiality concerns throughout the termination process.
- In certain circumstances, give the
employee the option of resigning voluntarily or taking early
retirement.
- Consider whether litigation can be
avoided by agreeing to "a deal" with the discharged employee.
Examples include agreements to submit the
termination issue to arbitration or extend benefits for a specified
period.
By carefully developing
and consistently applying clear discipline and discharge policies and
practices, most wrongful discharge suits can be avoided. This is good
risk management. Employment Practices Liability Insurance coverage is
available so it still would be worthwhile to at least bring up the
subject with your professional insurance agent.
Terry Koplan, CIC
HOFFMAN BROWN COMPANY
Sherman Oaks, CA
Terry Koplan is an Account Executive with
Hoffman Brown Company Insurance. He would be happy to answer any
questions you have regarding employment practices liability coverage's
at 818 986-8200.
Acknowledgment:
List from: Employment Practices Quarterly Vol. 1 #2
Portland, Oregon 97202
Back To Top
Hoffman Brown
Company is here to serve your
insurance needs.
