hartfordYears ago, I recall having a friendly conversation with another attorney in Connecticut where the topic turned to the notion of “At Will” employment.

When we couldn’t settle on an answer, we moved on to talking about whether the Hartford Whalers would ever come back.

I think we had a better answer for that question: Probably not.

But this is an employment law blog, not a sports one, so let’s get back to the topic.

Employment-at-will is, from a legal perspective, the notion that an employer may discharge an employee without restriction, that is, for any reason or no reason, without incurring any liability to the employee.

Simple enough, right?

Well, not quite. First off, Connecticut recognizes two major exceptions to this doctrine:

  1. The termination cannot violate an important public policy;
  2. The termination cannot breach an implied contract of employment if one as formed.

And, it should be noted, that there is the obvious exception that the termination cannot violate any other state or federal law — such as the laws prohibiting discrimination.

This again sounds simple enough, but in discussions with employers, there is another topic that comes up — fairness.  In other words, employers typically are wise the ask themselves whether a termination under the circumstances is “fair”.

Now that can mean a lot of things in a lot of situations.  For example, suppose an employer hires an employee, but 3 weeks later the employer loses a major contract and needs to layoff ten employees.  It may not be exactly “fair” to terminate this newly hired employee, but if the employer may be being “fair” by laying off newly hired employees first.

Sometimes, the “fairness” question is framed slightly differently.  Suppose you have a newly hired employee who is late to work a few times in the first 30 days and then shows up to work under the influence of alcohol.  Can you simply terminate the employee then?

Under most circumstances, yes, and most people would say this is fair because the employer is simply holding the employee accountable under its rules and a new employee shouldn’t get a lot of free passes.

But now suppose you have a 20 year employee who has an exemplary record of service.  The employee has no record of tardiness or misbehavior, but after a March Madness weekend, shows up at late to work with bloodshot eyes.  It should be noted, though, that a week before, the employee had complained to his boss that the machine he was working on seemed in need of repair.

Under the employment-at-will doctrine, the employers still has the same right to terminate the employee, but I think most people would think this situation ought to be looked at differently.  If the employer proceeds with the termination, it’s possible that it opens itself up to a threat of a claim.

Why? Because while the employment-at-will doctrine still applies, a judge or fact-finding would also then ask the same question — does this termination seem “fair”?

If the answer to that question is “no”, then judges and juries will look for alternative explanations.  Here, one could argue that it was the employee’s complaint that was the motivating factor in the termination and the employee was being retaliated against for complaining.  Otherwise, the termination seems a bit “unfair”.

That type of logic may not be “fair” either, but it goes to show that the employment at will doctrine should not simply be relied on in all circumstances.

I’ve yet to have an employer just say, “I didn’t have a reason for firing the employee. I just felt like it.” That may work under the “at will doctrine” but in the real world, it probably wouldn’t fly.

For employers, always try to look at your decisions through a neutral prism.  Or better yet, ask yourself: What would my neighbor think about this? If the termination seems unfair under those circumstances, it may be a clue to re-think your decision.

 

Before I even begin this post, let me advance the disclaimer right off the bat: Despite the title of this post, there is no sure-fire way to fire an employee without getting sued.

Indeed, the title is a bit of a misnomer.  It’s often been paraphrased that anyone can sue anyone else for anything at any time in any court. While that’s not quite true, it’s not that far off the mark either.

There ARE, however, ways to fire an employee that can reduce or, in some ways, eliminate the likelihood of being sued.

In fact, I had been working on a draft of this post for sometime thinking of how I could help others make the process of firing a bit more humane.  I’ve had many discussions with clients over the years about how firing an employee is one of the toughest things that they’ve had to do as a “boss”. fire

Yes, firing is part of the job, but I’ve yet to meet an employer that has enjoyed it. Inevitably, there is a sigh of relief when the termination meeting is over.

(And to be sure, the impact on the employee is almost always worse.  There are few things worse in life than being fired, even if it ends up leading to good things later.)

Of course, before I could finish my draft post, Jon Hyman alerted me to an excellent post by the Harvard Business Review entitled “A Step-by-Step Guide to Firing Someone.”

It’s really well done and I encourage you to read that first before finishing this post up.

Among the overall tips:

  • Start by creating a transition plan
  • Take the termination meeting itself step-by-step
  • Avoid misdirected compassion

The discussion in the article about the termination meeting itself is particularly insightful.

Here are three more things to think about too:

  1. Ask yourself: “Is the Termination Decision Fair?”  Sometimes, I rephrase this question into the following: “If you were telling your neighbor about the firing, what would he or she think about it?”  But it all comes done to the same point: Would a third person (or a jury) think the process you used to fire an employee was a fair and just decision?

    For performance-related terminations, you may look to whether the employee had been put on notice that his or her performance was faulty and given an opportunity to improve.

    For reorganizations or reductions-in-force, ask whether the process you are using to select employees (whether it’s seniority, overall performance, or other legitimate factors) is explainable and non-discriminatory.

  2. Consider A Separation Agreement: When I first started practicing law, separation agreements were the exception. Now they are the rule.

    If you’re firing someone and you want to avoid being sued, consider a separation agreement where you offer some severance in exchange for a release.  Of course, I’ve been talking about this since way back in 2008 – so this isn’t something new. But do yourself a favor: Use an agreement that complies with the law.

  3. Know the Difference Between “It’s Legal” and “It’s a Good Idea”: Over the years, I’ve had more clients ask me whether a proposed firing was “legal”.  But as I’ve said in the past, just because something is “legal” doesn’t mean it is a good idea.  For example, it may be “legal” to fire an employee by e-mail, but it may result in hurt feelings and the idea by the employee that the employer doesn’t value the employee as a human being.

    So, when you’re seeking legal advice on a termination, be sure you’re asking the right questions and getting the best advice from your counselor about the termination itself.

There are, of course, many more aspects to a firing than just this. But if you follow a few of these items, it can help reduce the risk of a lawsuit.

My colleague Peter Murphy and I have been talking a lot about background checks lately.  It’s easier than ever to run a basic Internet search on someone, but what information do you find? And are there any limts?

Today, Peter talks about two recent settlements of background check claims against employers. Both cost the employers big dollars. Here’s what you can learn from them.

Peter Murphy

 

Back in March, Dan noted that plaintiffs’ lawyers were brining an increasing number of lawsuits under the Fair Credit Reporting Act (“FCRA”).

This seems to be occurring for two reasons. First, the FCRA contains very specific steps an employer must follow when obtaining and then using a background check for employment related purposes, including the following:

  1. Make a clear and conspicuous written disclosure to the job applicant that a consumer report may be obtained for employment purposes;
  2. Have the applicant authorize in writing the procurement of the report;
  3. And, before taking any adverse action based in whole or in part on the report, provide the applicant with:
    1. a copy of the report; and
    2. a description in writing of the employee’s rights under the FCRA.

If one of these steps is being systematically violated by an employer, then there is the potential for a lawsuit involving multiple plaintiffs or even a class of plaintiffs across the employer’s operations.

The second reason for the increasing number of FCRA lawsuits is that they expose employers to damages for each FCRA violation, as well as punitive damages, costs, and significant attorney’s fees.

Thus, unless employers review their hiring practices and ensure FCRA complaint, they could be exposed to costly lawsuits, as Dan and others warned back then.

Their warnings were prescient, as demonstrated by two recent settlements in FCRA cases.

In the first case, the employer accepted online job applications–just like almost all employers. The applicants alleged that the employer’s online application system did not comply with the FCRA’s procedural provisions addressing authorizations for a background check, or provide FCRA mandated disclosures to the applicants.

These procedural violations could have been enough to expose the employer to liability under the FCRA.

According to the applicants, however, the employer also was taking adverse employment actions based on information in the background checks without providing them a copy of the report or the required opportunity to correct or explain any discrepancies.

Although the employer denied any wrongdoing, it ultimately agreed to a $5.053 million settlement that recently was approved by a district court judge.

The only ones getting rich as a result of this settlement, though, were the plaintiffs’ lawyers, who received about $1.52 million in attorneys’ fees in comparison to the $50 payment to each of the eligible class members.

Plaintiffs’ attorneys were just as pleased with a district court’s preliminary approval of an FCRA settlement in a case pending in Virginia. Just like the prior case, the claims in this case stemmed from allegations that the employer violated the procedural protections of the FCRA, and then also failed to give job applications the ability to respond to adverse information in the background check.

Under the judge’s recent order, the plaintiffs’ attorneys would get 25 % of the $4,000,000 proposed settlement, and each potential class member would receive statutory damages of $53.

The numerous procedural and substantive provisions of the FCRA can be difficult to decipher, and as the above examples demonstrate small compliance mistakes can lead to costly and time consuming lawsuits.

Although we may sound like a broken record, employers should therefore consult with trusted counsel when necessary to ensure that their job application process can survive a FCRA challenge, and that their authorization forms and disclosure notices comply with FCRA’s requirements.

It’s not as easy as it first appears.