Terminating without Litigating

Transcription

1 Terminating without Litigating Presented by: Merrily S. Archer, Esq., M.S.W. Atlanta Charlotte Chicago Columbia Dallas Denver Fort Lauderdale Houston Irvine Kansas City Las Vegas New Jersey New Orleans Orlando Philadelphia Portland San Diego San Francisco Tampa

2 The Employment Litigator s Credo Every good deed will be punished Truth requires proof She who has the most paper wins If it is not written, it did not happen Effective people management practices, not employment lawyers, win cases

3 Employment At Will : The Exceptions Swallow the Rule

4 Federal Laws Implicated in Terminations Title VII ADEA ERISA FLSA USERRA WARN ADA FMLA NLRA OSHA RETALIATION

5 Laws Implicated by Terminations Potential Common Law Claims Wrongful discharge / public policy Breach of contract claims Covenant of good faith and fair dealing Infliction of emotional distress Defamation Interference with business relations Fraudulent misrepresentation

6 Union Shop and CBA Implications Union/collective bargaining agreement May require cause, cause, good cause, or just cause Conduct must be in violation of a work rule The punishment must fit the crime Protected concerted activity Discussing terms and conditions of employment Active union support

7 Laws Governing the Termination or Post-termination termination Process Wage Payment Laws COBRA Workers Compensation Unemployment Compensation WARN Act

8 Performance-Based Terminations

9 An Overview Efforts to rehabilitate poor job performance should be EXQUISITELY well-documented To overcome jury bias, the employer s documentation should demonstrate Employer made employee aware of expectations and deficiencies Employer gave employee a reasonable opportunity to improve performance Employee failed to rehabilitate performance

10 Step One: Acknowledge and Confront The Rule: Every good deed will be punished How good guy supervisors confront performance problems Focus on behavior in discussion with employee Explain the difficulties caused by behavior Discuss consequences of failing to correct Identify attainable short-term goals

11 Step Two: DOCUMENT The Rule: She who has the most paper wins Today s tedious paperwork could be tomorrow s key evidence If it is not written, it did not happen Disciplinary counseling Attendance problems Hours worked

12 Good Documentation Is specific John has a bad attitude Contains all relevant information e.g., date, time, individuals present, purpose Demonstrates the employee is aware of issue i.e., signing disciplinary warning Discusses consequences for failure to correct problem

13 Step Three: Incorporate into Performance Evaluations The Rule: All plaintiffs were excellent employees Be firm, fair, consistent and timely Be candid Discuss any discipline or performance deficiencies during the evaluation period Administer evaluations when you say you will Avoid vague, subjective terms focus on job tasks and behaviors

14 Step 4: Use Performance Contracts Place onus on employee to rehabilitate job performance Identify deficiency Ask what will you do to fix this problem? Document the employee s improvement plan Clarify managerial expectations, set timetable for review Have both the manager and employee sign the document Document compliance/non-compliance consistently Follow through... Pull the trigger when necessary

15 Malfeasance-Based Terminations

16 Step One: Review Relevant Documents Employment Agreement(s) An employment agreement requires cause for terminations Employee Handbook / Work Rules Did employee commit terminable offense based upon conduct rules? Does progressive discipline policy preserve employer s s right to terminate without adhering to disciplinary ladder? Counseling Memos and Investigative Notes Was employee previously warned?

17 Step Two: Investigate (Build a Record to Support a Defensible Termination) Consider suspending pending investigation Get employee s s side of the story Confer with supervisors and managers Commit all notes to summaries signed by witnesses (if possible) Review findings with counsel Commit findings to writing Interview potential witnesses

18 ADA Management Do NOT pathologize bad behavior or poor performance! The ADA does not excuse bad behavior or poor performance Focus on performance, behavior! On September 3, 2008, the EEOC issued new Enforcement Guidance entitled The ADA: Applying Performance and Conduct Standards to Employees with Disabilities

19 EEOC s Guidance on Performance/Conduct Standards and the ADA Important reminders: An employer may apply same qualitative/quantitative standards to an employee with a disability An employer should apply the same evaluative criteria to an employee with a disability An employer can enforce same conduct rules with respect to both disabled and non-disabled employees Conduct rule must be job related and consistent with a business necessity

20 Blame the disability First disclosure of potential disability in response to discipline or poor evaluation should trigger Request for medical documentation Interactive process to determine reasonable accommodation

21 Blame the disability Request for reasonable accommodation during discussion of performance problem does NOT require employer to Tolerate or excuse performance Withhold discipline Raise performance rating Give inflated evaluations What reasonable accommodation would enable the employee to meet the performance or conduct standard?

22 Pause to Consider... Then Act! Has a thorough investigation been conducted? Is the decision consistent with prior actions? Has the employee been treated fairly? Has the decision been reviewed by Human Resources and labor counsel? Does the documentary record support the decision?

23 Employee-perceived Immunities Complaints/Charges of Discrimination ADA Reasonable Accommodation Requests FMLA Leave or Requests for Leave Job stress Workers Compensation Claims

24 Managing Untouchable Employees Consistent documentation Performance management Well-publicized complaint procedures Managerial training Attendance tracking Involvement of line managers Culture of compliance

25 Reductions in Force/Layoffs

26 Is a layoff necessary or appropriate? Layoff may not save employer money in long run Severance costs Legal fees from employment claims Attrition of valued employees Increase in unemployment tax Downstream costs of hiring newbies when the economy improves

27 Alternative to Layoffs Employer prerogative? Legal v. Practical (Evidentiary) Last resort Hiring freezes Wage freezes Reduction/elimination of bonus programs Reducing work hours Reducing benefits/increasing deductibles Reassignments

28 Document Economic Necessity Prepare a report or document outlining Economic conditions necessitating RIF Alternatives evaluated

29 Make a Plan Evaluate/define decisional units Design selection process Collect and analyze data for decisional units Identify employees Assess impact Finalize list Prepare for delivery

30 Operational Layoffs Decisional units by product, location, department Evaluate which positions are essential or nonessential for effective operations Duties can be absorbed by other employees Focus first on business: minimum personnel necessary to produce quality product or ensure excellent customer service

31 Sloughing Away the Dead Wood Most RIF s are not purely economic Rather, economic conditions often force employers to evaluate, rank, focus on performance management of under-performing employees The more with less rationale: But for economic conditions, we would not have scrutinized employee performance Failure to document, manage performance

32 Develop UNIFORM Selection Criteria Objective (data-based) indicia of performance Basic Seniority, sales figures, numeric performance evaluations, # of disciplinary write-ups, bonuses Creative Skills listed on application, codes entered by mechanics upon completion of repair, production goals Employer gets to establish selection criteria DOCUMENT the selection criteria and its rationale

33 Is there room for subjective criteria in the analytic process? Yes, but be careful: subjective selection criteria are often attacked as concealing discriminatory animus Blend objective and subjective factors Subjective factors (e.g., good attitude, team player) Can usually be translated into some objective measurement Must be justified, defined, outlined and DOCUMENTED

34 The Disparate Treatment/Disparate Impact Continuum Disparate treatment: Well-designed RIF (e.g., objective factors, neutral selection committee) essential to overcoming disparate treatment claims Disparate impact: Objective, neutral RIF criterion can still have an adverse impact on protected employees

35 Assessing Adverse Impact Analyze preliminary selections to determine whether any protected group is overrepresented Define employees in the pool or decisional unit Business unit, supervisor, department, product, geography Ensure accuracy of employee databases Race, age, gender, ethnicity Do a preliminary smell test Average age of those laid off Average age of those retained

36 Statistical Tests for Adverse Impact EEOC and OFCCP: Impact Ratio Analysis Compares selection of protected and non-protected employees Also known as the 4/5 or 80% rule Other tests Chi-square, Fisher exact, z-test Focuses on statistical significance, beyond chance analysis 2 standard deviations Don t do this at home!

37 Code Red Big numbers are bad numbers If the RIF involves the loss of more than 50 employees, consult with employment counsel Retain labor economist/statistician to conduct chi-square, Fisher exact, z-tests on selection data Be mindful of the EEOC s focus on systemic cases

38 If there s adverse impact... Option 1: Rework the selection process or criteria to minimize impact Option 2: Consider whether other criteria meet employer goals but has less impact Option 3: Prepare to defend criterion as job related and consistent with a business necessity

39 Delivering the News: Empathy Pays

40 Minimize Acrimony Consider face-to-face meetings Listen/empathize much, say little Do not argue Emphasize critical points Layoff: last resort and valued service Performance: bad fit Valued service Raise prospect of reemployment, if an economic termination Severance Non-monetary terms could be VALUABLE

41 Final Questions? Merrily S. Archer, Esq., M.S.W. Fisher & Phillips LLP 1999 Broadway, Suite 3300 Denver, CO (303) Atlanta Charlotte Chicago Columbia Dallas Denver Fort Lauderdale Houston Irvine Kansas City Las Vegas New Jersey New Orleans Orlando Philadelphia Portland San Diego San Francisco Tampa