Employers can minimize the risks of lawsuits when terminating employees, but it requires preparation that should begin before the employee walks in the door, according to two attorneys who recently led a BLR audio conference.

Diane O'Malley, a partner in the labor and employment section of Hanson Bridgett Marcus Vlahos and Rudy, and Mary L. Topliff of the Law Offices of Mary L. Topliff described how to avoid the common mistakes that lead to lawsuits.

O'Malley and Topliff said that employers should have the right policies in place and ensure that they are followed.

They said that the at-will doctrine is a major defense against an employee claim in jurisdictions where it applies. The at-will doctrine is that the employee or the employer may, with or without notice, terminate the employment relationship at any time and for any reason--other than an illegal reason, such as discrimination.

O'Malley and Topliff said employers must be careful to avoid anything that might jeopardize an employee's at-will status. For example, a manager could make promises to an employee that would create an exception to the employment at-will doctrine. Topliff said that's a reason why employers should train managers on at-will employment and how to protect it.

Performance-Based Terminations

Performance management has to be done carefully to avoid jeopardizing at-will status, according to O'Malley. She said performance-improvement plans should avoid having unattainable goals. Performance-improvement plans should be written, identify the level of performance required, let the employee know that a certain level of performance must be sustained, describe the tools the employer will offer the employee for help, and the consequences if the employee fails to succeed, she said.

O'Malley said that if the employer includes those elements in the plan, it will have a track record of how it gave the employee the opportunity and tools to succeed. She noted that it is important for the employer to monitor the plan closely to ensure that the employee is meeting the identified goals.

When creating the plan with the employee, she recommended that at least the immediate supervisor and a human resources person be involved.

She said a progressive-discipline policy is good for employee morale because employees won't think the employer is terminating workers for no reason. She stressed that employers should be careful when drafting and implementing a progressive discipline policy.

She recommended that the policy be in writing and note exemptions for activities that will result in immediate termination, such as theft, harassment, and workplace violence.

Topliff noted that the employee shouldn't be surprised by a performance-based termination. She said that employees often file lawsuits when they are suspicious of the reasons behind their termination.

Topliff said that employers can reduce the risks of a lawsuit by treating employees in a respectful and professional way during terminations, so the employees have no hurt feelings. She said it is a lot harder for an employee to argue that a termination is unfair if performance problems are documented.

She recommended that employers have two managers at the termination meeting so that one can act as a witness. She also said employers should be as upfront, brief, and concise with employees as possible.

Both experts said that when it comes to any termination meeting, employers should be prepared. Managers and the human resources should work together to ensure that they address all the relevant issues, including final paychecks, vacation payouts, healthcare continuation coverage, returning company property, escorting the person out of the office, and security issues.

Misconduct-Based Terminations

Employers must ensure that misconduct-based investigations are prompt, thorough, and unbiased, Topliff said. They must be fact-finding investigations and free of anything that may put their objectivity into question.

She said investigations should avoid making determinations of whether an employee broke the law--that's for juries to decide. Instead, they should focus on whether the employee violated company policy. The results of the investigation provide a basis for remedial action, including termination, she said.

Layoffs

When employers have layoffs, they must comply with laws like the Worker Adjustment and Retraining Notification ACT (WARN Act) and the Older Workers Benefit Protection Act (OWBPA).

The WARN Act requires covered employers to give their affected employees 60 days' notice of a "mass layoff " or a "plant closing" that is expected to last six months or longer. Employers also have to notify local government officials and the state dislocated-worker unit. The OWBPA contains specific requirements for waivers of age discrimination claims.

O'Malley said that employers sometimes make the mistake of using a layoff to remove an employee whom the employer would actually like to terminate for misconduct or poor performance. She said a layoff should be done for a position--not a person.

Severance Agreements

Both presenters stressed that severance agreements, especially those containing a release/waiver of claims against the employer, must be drawn carefully and reviewed frequently to ensure that they are adequate and accurate.

Order a CD copy of the Terminating Employees Without Getting Sued audio conference.