The prospect of facing a wrongful termination lawsuit is something no employer is eager to contemplate, but these lawsuits have become a reality that demand careful attention and consideration.
“We’ve come to the point where virtually any termination decision can be challenged in court,” says attorney Richard Mariani, who works for Ogletree Deakins in Morristown. Mariani says he has seen these cases grow exponentially in recent years.
New Jersey is still technically an employment-at-will state, meaning that employers can terminate employees for whatever reason they see fit, as long as it is not in violation of a contract or statute. However, in the last 40 years, the state legislature has enacted a multitude of laws creating so many protected classifications that most employees will fall in one of these groups, says Mariani.
“When I first started practicing law in the ’70s a client called me worried about having fired someone, I would say, ‘if it’s a white male under 40 there’s nothing they can sue you for.’ That’s no longer true. Virtually every white male under 40 can find some law under which they are protected and they can sue you for being terminated,” Mariani says.
Many new employer-employee relationships will be formed at job fairs this summer. On Wednesday, July 27, Edison will hold its summer job fair, taking place from 5 to 7 p.m. at the Hilton Garden Inn Edison/Raritan Center at 50 Raritan Center Parkway. Multiple companies and hiring managers will be there looking for new recruits. For more information, call 732-424-2532 or E-mail firstname.lastname@example.org.
So what happens if all those new relationships don’t work out? Mariani, who recently led a workshop for the New Jersey Business and Industry Association on employment law, said it’s important to educate employers on the potentially adverse consequences they face in terminating employees.
One important topic is documentation. “The primary and most fundamental factor in preventing lawsuits and avoiding liability if you are sued is to have solid documentation,” Mariani says.
Mariani explains that in terminations resulting from poor performance, jurors expect to see performance evaluations performed in a certain way — using objective criteria — and supervisors who have a working knowledge of how to classify these different standards (for example, the objective difference between “satisfactory work” and “needs improvement”).
Mariani stresses that employers should not wait for performance evaluations to document instances of poor performance.
“If there are serious poor performance issues, a supervisor shouldn’t say to themselves, ‘oh, in seven months I’ll include that in the performance review.’ They should document that contemporaneously with the event,” Mariani says.
Not only does this information help expand performance evaluations, but also serves to refresh witness recollection of events that occurred as many as six years earlier, says Mariani.
“I’ve defended clients in depositions about performance evaluations prepared five or six years before the deposition took place,” Mariani says. “Without well prepared performance evaluations and contemporaneous reports, I guarantee you the witnesses would have no way of recalling and communicating all the issues that led to an employee’s termination.”
Mariani emphasizes the importance of employers following their own processes to support a termination decision. For example, if the company has a progressive discipline policy, the employer must be sure to follow this. In misconduct cases, employers must be sure they have evidence that their employee violated a specific, existing policy the employee was aware of.
“When I’m representing a client I ask the employer what rule their employee violated and if they have a specific rule that prohibits what they did,” Mariani says. “It’s amazing how many times the phone goes dead, and they say ‘we’re going to have to look at that.’”
It is also important that the punishment is consistent with what has been done in past cases involving similar situations, says Mariani. If similar performance deficiencies and incidents of misconduct have not led to termination, the employer must be cautious in deciding to terminate.
Mariani also notes that employers should take a minute to consider the objective fairness of the decision. “Too many employers focus exclusively on whether a policy was violated or performance improvement plan complied with, and if the policy manual or past practice indicates that termination is appropriate,” Mariani says. “They don’t pause to think, well the policy says we can fire them but wait a second, does the punishment really fit the crime?
Mariani also suggests employers be cautious and forthright during the termination discussion. “Frankly is it is extremely important to be absolutely honest with respect to informing the employee for the reason for their termination,” Mariani says. “If it’s poor performance or misconduct, tell them. Don’t suggest that the position was eliminated or that it is layoff not a termination.”
The good news is that cautious and careful employers can put themselves in a good position to protect their companies against lawsuits. Mariani recalls a case in which two senior executives were fired and wrote to the company threatening to sue. The general counsel received Mariani’s report, based off the thorough information provided by employers, and forwarded it to the suing attorneys. The attorneys never filed suit.
“That was the classic lesson that if you follow these rules, there’s a fairly good chance you’ll avoid litigation altogether,” says Mariani.