Q: I have an employee who I would like to fire for reasons that I don't really want to get into. My manager says we need to document her transgressions more, but I thought that I can fire employees for almost any reason. What should we do?
A: Well, let's begin with a quote from Confucius that I like: "I can try a lawsuit as well as other men, but the most important thing is to prevent lawsuits."
If you have ever been party to a lawsuit, you know only too well how true Confucius' words are. Lawsuits are a civilized form of war, pitting one side in a battle against the other, both willing to do and spend almost anything to win, and both usually losing plenty in the process. Lawsuits are an expensive, time-consuming, exhausting, frustrating, and often ineffective way to resolve disputes.
And for employers, one lawsuit to be especially concerned about is the employment discrimination lawsuit, which usually arises when employees were either fired or not hired, and they contend the reason was discrimination.
So the question is, when can you fire someone without fear of a lawsuit? While seemingly a simple question, the answer is not so simple. The basic rule is this: Almost all employees are considered "at-will." An at-will employee can be fired at any time, for almost any reason.
"Just cause" employees cannot — you need, well, a just cause reason to let them go. What makes an employee "just cause"? Usually, it is some sort of employment contract or promise of continued employment. If for example, you have an employee handbook that promises job security, that could, by a court of law, be inferred as a promise of continued employment, and then your employees cannot be let go absent a valid reason like stealing or some such thing. Tough times and the need to cut back would not count as just cause.
It is harsh, but also smart therefore to have all employees sign a document acknowledging their at-will status. That way, it will be very difficult for them to come back and say you had no right to fire them because they were a just cause employee; a letter stating that they know they are at-will protects you.
However, there are three times when even an at-will employee cannot be fired:
- You cannot fire someone in retaliation for the exercise of a statutory right, such as filing a worker's compensation claim.
- You cannot fire someone in retaliation for their exercising a legal duty, such as jury service.
- Most importantly for this topic, you cannot fire someone on the basis of their color, sex, religion, age, ethnic background, or disability. Membership in the armed forces also cannot be a reason to fire someone, and neither can past debts or bankruptcy. In the law, these are called protected classes.
If you are found guilty, either of not hiring someone for discriminatory reasons, or firing someone for discriminatory reasons, the penalties are harsh indeed. If an ex-employee wins, she might be awarded back pay, reinstatement, attorney's fees, money for emotional distress, and even double damages as a way to punish you.
There are a few things you can do to protect your business from employment discrimination claims:
- Have an employee handbook that explains what is expected of employees, that they are at-will, how the discipline system works, and that explains that non-discrimination is your policy and discrimination claims will be investigated promptly and thoroughly.
- Document, document and document some more. Have regular written performance reviews. When you do have problem employees, warn them in writing. Have them sign the warning. Have them sign any second warnings. The more you can document that the reason you fired them was legitimate and not discriminatory (poor performance or whatever), the less any discrimination claim can stick.
So although this is a long answer to your question, the essential answer is documentation, while not necessary, is nevertheless still the best policy.
Today's tip: When hiring and interviewing, you are also strongly urged to avoid questions into protected class status employees. Why? Because if you do, and then do not hire the person, they may sue for employment discrimination, claiming that that is the reason you decided not to hire him or her; that your nonchalant question about his age is evidence that you discriminate on the basis of age, for example. The only questions you should ask are those that relate to his or her competence and qualifications for the job.
© 2010 Steven D. Strauss, www.MrAllBiz.com