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Human resource managers and the legal counsel working with them
likely know who the worst performers are at the company. They
likely have a good sense of which employees they would terminate
first for performance-related issues if it ever came time to make
that decision. When the time does come, it is advisable to consider
the following items before implementing the termination
decision.
First, an unsurprising caution: all terminations come with risk.
The quip that every employee falls into some protected
characteristic, including even the white male employee who is under
the age of 40 and without any disability, is technically true.
There are, of course, degrees of risk associated with terminations.
Knowing the contractual obligations a company has with an employee,
as well as which protected characteristics are applicable to
individual employees, will help quantify and manage that risk.
It is important here to re-emphasize the importance of objective
and strong performance evaluations for employees. I have commented
on the elements of an effective performance evaluation process in
a previous post. The employees that the
company considers the worst performers should not necessarily be
surprised to hear it.
The greatest amount of friction—and the greatest
amount of risk for litigation resulting from a
termination—comes when an employee is terminated for
performance problems, but those performance problems are a surprise
to the individual employee. In those situations, the terminated
employee rejects the company's purported reason for
termination and looks to other reasons (such as race, disability,
whistleblowing activities and the like) as the suspected reason for
the termination. Consistent, strong and effective performance
evaluations can mitigate this risk.
Once the decision has been made to terminate employees for any
reason, it is important to consider the contractual obligations the
company has with that employee. A collective bargaining agreement
may govern the termination decision and process. An employment
agreement may call for certain termination procedures, notice or
severance payments.
Companies also should be mindful of offer letters,
correspondence surrounding initial employment negotiations with the
employee and employee handbooks. Employee handbooks should contain
express language making clear that the handbook is not a contract
of employment, and should contain clear language that all employees
are, by default, at-will employees unless they have a written
employment agreement signed by a designated officer of the
company.
In addition to understanding and managing contractual
obligations, it is important to know the protected characteristics
which might apply to an individual employee. Common protected
characteristics include age, race, creed, color, disability, sex
(gender), national origin, ancestry, arrest record, conviction
record and membership in military services. Some states may have
other protected characteristics specific to that jurisdiction, such
as marital status, sexual orientation and transgender identity.
Individual municipalities may also have unique protections (e.g.
prohibition against discrimination based on "student
status" in Madison, Wis.).
Companies also must be cognizant of whistleblowing activities in
which an employee has engaged. If the employee has complained about
financial practices, health and safety issues, discrimination,
harassment or any other kind of alleged inappropriate or illegal
activity, the employee is likely protected from retaliation for
those complaints.
After discerning what contractual obligations the company may
have to the employee as well as which protected characteristics an
individual employee may have, the human resource manager or legal
counsel will have a good sense of what risks and obligations the
company will have associated with the termination. Once the risks
are identified, the risks can be properly mitigated and/or
managed.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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