Involuntary termination or an organizational decision to fire a worker is accompanied by the risk that the employee would file a lawsuit against the company for wrongful dismissal. There may have been a breach of contract on the part of the organization. In fact, ‘wrongful discharge’ claims have been made time and time again. Lawyers thrive on such lawsuits. Even if the organization is correct to fire an employee based on evidence that his or her job performance was rather poor, if involuntary termination is not handled right the organization may very well have to confront lengthy, expensive litigation.
This risk is real even if the organization has merely fired a contentious, insulting worker. After all, poor firing practices reveal organizational animosity toward the worker. Discrimination, wrongful discharge or retaliatory claims may swiftly follow involuntary termination in such cases. Even ‘at-will’ organizations reserving the right to fire workers without a legally provable reason must be wary of litigation if involuntary termination is not handled correctly. The dismissed employee may claim that it was discrimination on the job that led to involuntary termination.
It is also possible to claim that the employer defamed the discharged worker by making untruthful, slanderous comments about him or her to other stakeholders of the organization. Perhaps the employer had treated the fired employee in a way that was emotionally distressing for the latter. The employer may also have invaded the dismissed employee’s privacy by rudely disclosing to organizational stakeholders the reason for the worker’s dismissal. Or, perhaps the employee was discharged in retaliation for reporting illegal organizational practices or for rightfully taking a leave under the Military Leave Act or the Family and Medical Leave Act.
In the United States, most people work at-will. They may quit their jobs any time just as their employers may fire them at-will. Nevertheless, there are state and federal laws that prohibit organizations from firing their employees for certain reasons, for example, discrimination. Federal law prohibits employers from dismissing a worker because of his or her race, national origin, gender, disability, old age or religion. Likewise, it is illegal under federal law for organizations to fire an employee for the reason that she is expecting a child, has recently had a child, or ‘has a related medical condition.
’ Most states follow these federal laws against discrimination. But many states have introduced additional anti-discrimination laws, for example, laws prohibiting discrimination on the basis of marital status or sexual orientation. Other prohibitions on involuntary termination are described as follows: Retaliation It is illegal for employers to fire employees for asserting their rights under the state and federal anti-discrimination laws described above. An employee can bring a retaliation claim even if his or her underlying discrimination claim doesn’t pan out. For example, if
you fire an employee for complaining that he was not promoted because of his race, you could lose a retaliation lawsuit, even if the court finds that you had legitimate reasons for not promoting the employee and, therefore, did not commit race discrimination. Refusal to Take a Lie Detector Test The federal Employee Polygraph Protection Act prohibits most employers from firing employees for refusing to take a lie detector test. Many state laws also set out strong prohibitions against using lie detector tests. Alien Status The federal Immigration Reform and Control Act (IRCA) prohibits most employers
from using an employee’s alien status as a reason for terminating that employee, as long as that employee is legally eligible to work in the United States. Complaining about OSHA Violations The federal Occupational Safety and Health Act (OSHA) makes it illegal for employers to fire employees for complaining that work conditions don’t meet state or federal health and safety rules. Violations of Public Policy Most states prohibit employers from firing an employee in violation of public policy – that is, for reasons that most people would find morally or ethically wrong. Of course,
morals and ethics can be relative things, so the law will vary from state to state. Some states may prohibit reasons that other states do not. Despite this relativity, most states agree that the following would violate public policy and would therefore be illegal: • terminating an employee for refusing to commit an illegal act (such as refusing to falsify insurance claims or lie to government auditors) • terminating an employee for complaining about an employer’s illegal conduct (such as the employer’s failure to pay minimum wage), and • terminating an employee for exercising a legal right (such as voting or taking family leave).
Of course, employers are legally permitted to fire their employees if the latter are believed to be incapable of properly fulfilling their responsibilities on the job. Perhaps the dismissed employee had lacked the aptitude and/or skills to handle the job. If an employee consistently fails to meet performance expectations/targets set by the organization, the latter is permitted to fire at-will. Then again, the employer must have evidence that the discharged worker was given the opportunity to improve his or her performance before involuntary termination.
Without this evidence it is quite possible for the employee to create a wrongful discharge lawsuit against the organization. Thus, employers are advised to hold a disciplinary meeting before issuing a written warning about dismissal to the poorly performing employee. A final written warning must be issued if the employee continues to fail to meet organizational expectations. Before involuntary termination, however, the employee must be given the chance to appeal to keep his or her job.
If the employee fails to meet performance goals even after the appeal has been heard and accepted, the organization has plenty of evidence for rightful employee dismissal without fearing a lawsuit in retaliation. Furthermore, the organization is legally permitted to dismiss an employee if he or she is unable to perform the job because of poor health. But, perhaps unsafe or unhealthy working conditions are the reason why the employee is regularly absent from the workplace. It is best, therefore, for the organization to investigate as well as monitor the reasons for the employee’s absence.
It is further possible that the employee is suffering from a chronic illness and his or her job performance is excellent whenever the employee shows up at work. Once the organization has found out the actual reason for the employee’s regular absence, it may decide to ‘minimize the impact of absence by putting effective policies and procedures in place. ’ After all, discussing the problem with the employee and figuring out ways to resolve the issues that he or she may be facing, and making accommodations for excellent performers despite their regular absence is better than the threat of litigation.
If the organization fails to resolve its issues with employees that are regularly absent because of ill health, and does not possess evidence that it had tried to resolve this problem with frequently absent employees, it may be that the latter would file wrongful discharge lawsuits against the employer in case of involuntary termination. Orey writes that a company sued for wrongful discharge may have to spend at least ‘$100,000 to get a meritless lawsuit tossed out before trial. And if a case goes to a jury, the fees skyrocket to $300,000, and often much higher.
’ So, even if a company believes that an employee must be discharged because he or she has breached the disciplinary rules or is unwilling to meet performance expectations, the latter must be given the opportunity to change his or her behavior in a positive direction. The process of holding a disciplinary meeting followed by written warnings issued by the company is helpful in these scenarios. Once again, the employee must be given the chance to appeal to keep his or her job before involuntary termination.
But, if the employee is responsible for ‘gross misconduct’ and there is sufficient evidence for the same, the organization may decide on firing him or her right after the incident. On the other hand, a verbal warning is sufficient if misconduct on the part of the employee was a one-off. If the employee repeatedly commits some type of misconduct, however, it is best for the verbal warning to be followed by a disciplinary meeting and written warnings for the organization to ensure that it has sufficient evidence that it tried to improve the employee’s behavior before he or she was fired.
Likewise, the employer must be able to prove that an employee should be discharged for the reason of redundancy. In this case, the company is safe from the threat of litigation if it can prove that it is closing down its operations or shutting down the department where the employee to be fired was previously employed. It may also be that the organization no longer requires employees with certain job descriptions or to fulfill some job functions. Regardless of which of these conditions the employer is prepared to prove to fire a worker, the latter qualifies for redundancy pay.
This is in accordance with Section 139 of Employment Relations Act, 1996. Failure to make redundancy payment to a discharged employee translates into expensive litigation for the company. Apart from the reasons for wrongful discharge lawsuits described thus far, an employer that discharges a worker ‘[i]n violation of the employment-related provisions in the Fair Credit Reporting Act or Bankruptcy Act’ may have to confront litigation for wrongful involuntary termination. The Fair Credit Reporting Act involves regulations for conducting credit checks on employees.
Violation of Bankruptcy Act implies that the company has discriminated against the employee on the basis of the latter’s financial history. Similarly, an employer that discharges a worker ‘[i]n violation of rights granted by the First Amendment to the U. S. Constitution’ may have to confront a wrongful termination claim. The organization faces the threat of a lawsuit if it fires an employee for the following reasons to boot: • In violation of the employer’s own discharge policy • In breach of an explicit or implied contract of employment or an employer-union collective bargaining agreement (contract law)
• In breach of the covenant of good faith and fair dealing • According to the constructive discharge doctrine… • Under the guise of a false statement of fact • For jury duty (Judiciary and Judicial Procedure Act) The covenant of good faith and fair dealing is an unstated agreement that all employees will be treated ethically by the organization. The constructive discharge doctrine maintains that the at-will doctrine does not apply when the employer fires a worker because of the latter’s labor union activities of a legitimate nature.
Additionally, the employer may have to face litigation for wrongful involuntary termination if the worker has been fired in retaliation for garnishment of wages. Wage garnishment is for the organization to deduct a certain amount from the employee’s wages in order to pay off a creditor of the employee. It is usually by court order that an employer agrees to such an arrangement. But, if the employer fires the worker after agreeing to this arrangement and it is proved that the employee was fired for this reason alone, the company may have to confront a wrongful discharge lawsuit.
Even so, it may not always be easy for the employee to prove that he or she was discharged for this reason alone, just as it must be considered difficult to prove that the employee was dismissed because of his or her legal union activities. Regardless of whether an employee has evidence that he or she was fired for a particular reason constituting wrongful involuntary termination, it is advisable for employers to handle the firing process with care. Rupe provides the following example of bad firing practices.
An IT professional had taken his eight year old daughter to work; it was the ‘Take Your Daughter to Work Day. ’ The IT professional was fired that day as his daughter witnessed the dismissal in the office of the human resources manager. Both father and daughter were escorted from the office complex soon after. On the other hand, when Continental Airlines Inc. decided to discharge 6. 5 percent of its workforce in order to reduce its costs, it offered its employees free travel opportunities in addition to year’s worth of free health insurance coverage in exchange for their agreement to quit their jobs on their own.
According to Rousseau & Aquino, employers tend to be fairer in their termination practices toward those workers who have performed well for the organization in the past. But, even if an employee has consistently performed poorly, fair termination practices entail that the decision to fire such an employee must be conveyed to him or her in a way that the decision appears just. In fact, all reasons to fire must be conveyed in ways that make them appear as legitimate. Economic and technological reasons tend to be accepted as legitimate, according to the authors.
But, even if the reasons for involuntary termination are different, all internal and external stakeholders of the organization want to see that the company’s decisions are just and legitimate. Legal problems could mar the reputation of the organization. If litigation is highly expensive it may also affect business performance by raising costs extravagantly. Businesses have had to face bankruptcies, too, thanks to high priced lawsuits. Thus, it is advisable for employers that fear wrongful discharge claims to protect themselves by asking their dismissed employees to sign an agreement stating that the organization would not be sued.
Referred to as a release, this agreement is especially convenient to use when the company is aware that its dismissed employee is capable of creating trouble. It is also possible that the organization has failed to properly manage its firing practice in the case of an employee who is expected to sue the company in retaliation. In both cases, the employer could ask the fired worker to sign the release in exchange for agreed upon benefits. As a matter of fact, some companies have a policy in place to get their dismissed workers to sign agreements not to sue the organization in exchange for ‘receiving…severance package[s].
’ Others may want to consider such packages only for fired employees that appear particularly motivated to file for wrongful discharge claims. The agreement not to sue must be clear about the rights that the dismissed employee must waive. The discharged employee must be given at least a week or two to sign the release. There must be no coercion to sign this release, seeing that the courts would not enforce the agreement if it was signed involuntarily. What is more, if the fired worker is at least forty years old, the Older Workers Benefits Protection Act is applicable to the signing of the release.
Under this federal law, workers who are forty years of age or older must be allowed a longer period of time to think through the implications of signing the agreement. Furthermore, they must be granted the permission to revoke the release after signing it. This is to ensure that the older worker has not signed the agreement while suffering from an ailment that adversely affects intellectual abilities. All the same, there is a limit to the amount of time granted the older dismissed worker to revoke the release.
When an employer approaches an older discharged worker to sign the release in exchange for specified benefits, the Older Workers Benefits Protection Act demands for the dismissed employee to be informed that consulting a lawyer is recommended in this situation. After all, the discharged employee may or may not find another job again. What is more, this may be the last time he or she receives benefits from an organization for retirement. If the organization provides the older dismissed worker with sufficient benefits for retirement, there may be no reason for the employee to file a lawsuit against the employer.
Otherwise, the older dismissed worker must weigh the cost of waiving his or her rights to sue the organization against the benefits promised by the employer. After all, it is always possible that the organization has dealt with a worker unfairly through involuntary termination. If a discharged employee files a lawsuit, it may be that he or she would gain a substantial amount of money from the organization by winning the case. Steve Goldschmidt, for example, earned $620,000 by filing a wrongful discharge lawsuit against a school district in Portland, Oregon.
If he had signed a release agreeing not to sue the school district, the benefits he would have received in exchange may have amounted to far less. Then again, fired workers are only capable of suing employers if they have sufficient evidence for wrongful termination. Just as it is necessary for employers to build up documentary evidence for firing employees for good reasons, it is imperative for the latter to gather their proofs for unfair termination to show courts of law. Bibliography ‘Constructive Discharge,’ Employee Issues, 2008, retrieved 22 March 2009,
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