HOW TO SAFELY DISCHARGE EMPLOYEES
By Stephen P. Horner, Esq.
Query:
Unfortunately, we have had problems with discharging our employees who are not performing well. We usually end up with discrimination claims and/or unemployment compensation claims.
How can we safely discharge our employees who aren’t doing a good job??
(George W., Darien)
Response:
By taking the following steps, your company can greatly minimize the risks of discharging poor performers:
1. Treat your employees fairly and consistently, where the circumstances are similar. You are not required to rigidly treat all employees the same but there should be an understandable rationale for treating your employees differently. Remember that jurors frequently ask themselves if the company had treated the employee fairly or not when considering if any laws were violated when an employee was discharged.
2. Use annual evaluations to objectively appraise your employees’ performance. Avoid “sugarcoating” the evaluations. If their performance is unsatisfactory, let them know that and consider putting them on a Performance Improvement Plan .
3. Us progressive discipline (oral warnings, then written warnings, then a suspension, then termination) to address violations of company rules or unsatisfactory job performance. Your discharge defenses are improved if progressive discipline is done properly.
4. Remember to “document, document, document” so that you can prove the employee’s unsatisfactory job performance. Hopefully, the employee will realize that he/she needs to improve his/her job performance as a result of such documentation and the discharge won’t be needed.
5. Retain your management rights and flexibility by advising your employees in writing of their employment at will status and of your employment requirements. That can be done via your job application form, your “job offer” letter, and your personnel manual.
6. Consider the employee’s employment status:
a. Is there a union contract? If so, follow it carefully.
b. Does the employee have a personal employment contract? If so, follow it carefully.
c. Is there any basis for the employee to claim that he/she has an “implied employment contract”?
d. Is the employee in a protected category regarding his/her race, age, sex, national origin, disability, etc.
e. Could the employee claim that he/she was discharged in retaliation for his/her opposing some violation of a law?
7. Consider offering a severance package, along with a release of liability document.
8. If the employee can be shown to have been discharged for “willful misconduct”, he/she will likely not be eligible for unemployment compensation.
9. Treat your employees in the same fashion as you would like to be treated.
If the above steps are followed, your “batting average” of successful employee discharges should be considerably better than at present.
Contact Steve Horner at shorner@horner-law.com
1 Notes
“I NEED HELP WITH MY EMPLOYEES!”
By Stephen P. Horner, Esq.
Inquiry:
As a small employer, I don’t have much time to handle the Human Resources issues that arise in my company. Basically, I need help in that area because I have already had claims filed by former employees. Do you have any suggestions?
(Russ H., Norwalk)
Response:
Russ, not to worry! Your exposure to such potential claims can be substantially minimized by taking the right steps.
First, lets set some goals:
1. Retain management flexibility in running your business.
2. Reduce risk of employee claims of implied employment contracts by creating the “employment at will” relationship with your employees.
3. Maximize your defenses now to minimize later exposure to: unemployment compensation, discrimination claims, tort claims, etc.
The above goals can be accomplished by following these sixteen steps (remember to document, document, document!):
1. Use a non-discriminatory employment application form that states one’s employment status is “at will”.
2. Check all applicant job references and the contents of the employee’s application form for accuracy…before hiring the applicant.
3. Use an “offer letter” to offer employment so there are no misunderstandings, and again stress the “employment at will” status of employees in such letter.
4. Have a personnel manual which contains company policies on: sex harassment, grounds for discipline/discharge, attendance, hours of work, benefits, vacation, etc.; and again include a statement that the employment status is “employment at will” plus a statement that the personnel manual is not a contract. Have “employment at will” listed in the index of the manual and have employees sign for their receipt of the handbook.
5. Provide training to your supervision and management regarding: sex harassment, employment torts, discrimination, wrongful discharge, retaliation grounds, exempt and non-exempt wage status (be sure to properly classify all employees as “exempt” or “non-exempt” re their wages).
6. Perform annual written job performance appraisals or make sure that they are not “sugarcoated” instead of honest appraisals that point out the good and bad aspects of one’s performance.
7. Where appropriate, use oral and then written warnings to try and improve the job performance of your employees. These may also help to defend against unemployment compensation claims if there has been willful misconduct involved.
8. Consult with your employment attorney before discharging the employee (don’t wait until after the toothpaste has already been squeezed out of the tube!).
9. Have a good reason for discharging the employee (poor job performance, insubordination, theft, excessive absenteeism/tardiness, fighting, “under the influence”, etc.) and have good documentation to support the discharge reason. Avoid retaliating against employees for wrongful reasons (a “wrongful discharge”) or committing “torts” against them (invasion of privacy, assault and battery, infliction of emotional distress, defamation, false imprisonment, etc.).
10. To maximize your defenses against unemployment compensation claims, see if there are grounds for claiming “willful misconduct” by the employee.
11. Be consistent regarding your discharge reasons: at time of discharge, on letter of discharge, on the unemployment compensation “pink slip” form, at the unemployment compensation hearing, on the employee’s reference letter, what you tell the remaining employees, etc.
12. If the termination is due to a voluntary resignation, seek a resignation letter which states the employee’s reasons for resigning; draft a resignation letter for the employee to sign.
13. If the termination is involuntary, consider offering severance pay in exchange for a “release of liability” agreement.
Another option to consider is to have key employees sign employment agreements and include non-compete agreements along with other restrictive covenants.
14. Ask for a written release from your employee before giving any references to a possible future employer of the terminated employee. Have a written policy about this in your employee handbook.
15. Use a progressive discipline policy and be sure that it is applied to each employee in generally the same manner to avoid claims of discrimination. There may be instances where the employment circumstances would justify different treatment of your employees.
1 Notes
RESTRICTIVE COVENANTS
by Stephen P. Horner, Esq.
Question:
One of our former employees has downloaded our entire computer file and taken it with him just after we terminated him.
He also is calling our potential clients and is “bad-mouthing” us to them.
Lastly, he is starting to work for our biggest competitor although he agreed not to work for a competitor for two years after he stopped working for us.
What can we do about this??
Peter P, Madison, CT
Response:
Presumably, your company did not offer your former employee a “separation agreement” which provided him/her with some severance pay in exchange for a full release of liability, non-disparagement, confidentiality provision, etc. For future discharges, I suggest that your company consider doing that so that the parting is more amicable. It appears that your former employee is trying to do as much harm as possible due to his having been terminated.
If the former employee did sign a separation agreement and he has violated its provisions by taking the above-described actions, you could file suit against him for having breached the agreement. A less aggressive step would be to have your attorney contact him with regard to his being sued if he doesn’t promptly cease and desist such actions.
With regard to his actions, it certainly appears that he has improperly stolen your computer information. If such information contained proprietary, confidential company information, such theft from a computer is a criminal violation in Connecticut.
In addition, such actions are most likely a violation of the Trade Secret Act.
If his “badmouthing” of the company to its clients is defamatory, that would likewise be a tort in Connecticut. In order to fully answer this question, what exactly was said to the company’s clients must be reviewed.
It would appear from your background information about the former employee that he either signed a non-compete agreement earlier in his employment or there was a non-compete provision in a severance agreement. In either event, if it prohibited him from competing with your company, then he has violated that agreement as well. It should be noted, however, that the courts in Connecticut (as well as in New York) are most reluctant to enforce non-compete agreements unless they are eminently reasonable and do not significantly impact on “freedom of enterprise”.
Contact Steve Horner at shorner@horner-law.com
