HR Best Practices Webinar Series: Firing – Minimizing Risk ... › ~ › media › files › ... · Retaliation • General trend toward broader protection against retaliation in

39 Offices in 19 Countries

BEST PRACTICES: FIRING – MINIMIZING RISK AND AVOIDING LITIGATIONJune 25, 2013

Presented by:

Tara A. [email protected]

Laura Lawless Robertson [email protected]

www.squiresanders.com www.employmentlawworldview.com

Agenda

• Steps Before Termination – Single Employee

• Termination Checklist – Single Employee

• Termination Considerations – Multiple Employees


Principal Types of Involuntary Employee Terminations

• Reduction-in-Force

• Performance-Based

• Company Decision

Restructuring


Steps Before Termination – Single Employee


Why does this matter?

• Statistics:2009: 93,277 Total Charges

2010: 99,922 Total Charges



− Retaliation = 38.1%− Race = 33.7%− Disability = 26.5% (increasing post-ADAAA)


Termination Checklist

• Justification• Discrimination-retaliation• Reverse discrimination• Defensible reasons• Policies or work rules• Oral statements• Progressive discipline• Public policy


Justification

• Have I identified the reasons for the discharge?

• Are they lawful, non-discriminatory reasons?

• Are they documented?

Employee recordsJob descriptionDocument warningsWitness statements

• Has documentation been provided to employee?• Have I contacted appropriate management?• Type of Employee

At-will employee?Contract employee?Implied contract?


Maintaining Proper Documentation

• When there is a problem, take action and discuss it with the employee as soon as possible

• Document date, time, and nature of every warning, even oral warnings

• Written warnings may (usually should) include that further violations may lead to “discipline up to and including termination”

• Progressive discipline


Maintaining Proper Documentation

• Evaluate employees honestly, fairly, and accurately

• Avoid overly subjective terms

• A performance evaluation should not be a surprise to the employee:

Problems with inflated past performance reviews

• Meet with the employee, review the evaluation, have the employee sign the evaluation, and allow employee to provide comments


Discrimination/Retaliation – Is Employee Protected Based On:

• Race?

• Sex?

• Religion?

• Ethnic group?

• National Origin?

• Ancestry?

• Union organizing or other concerted activity?

• Disability?

• Marital status?

• Pregnancy or childbirth?

• Age (40 or over)?

• Safety complaints?

• Filing a workers’ comp claim?

• Sex harassment claims?

• Taking FMLA leave

• Jury Duty?

• Prior discrimination claim?


Retaliation

• General trend toward broader protection against retaliation in employment context

• Retaliation charges exceeded race charges filed with EEOC for first time in 2010, trend continues

• Burlington Northern v. White (U.S. Supreme Court 2006):− “[Title VII’s] anti-retaliation provision does not confine the actions

and harms it forbids to those that are related to employment or occur at the workplace. We also conclude that the provision covers those (and only those) employer actions that would have been materially adverse to a reasonable employee or job applicant … [T]hat means that the employer’s actions must be harmful to the point that they could well dissuade a reasonable worker from making or supporting a charge of discrimination.”

− Crawford v. Metropolitan Gov’t of Nashville (U.S. Supreme Court 2009): Title VII’s anti-retaliation prohibition protects employees who are witnesses questioned in an internal harassment investigation


Reverse Discrimination

• Can the employee credibly claim REVERSE discrimination?


Defensible Reasons

• Have “similarly situated” employees been terminated for similar conduct or pattern of conduct?

• If employee is treated differently, are the reasons demonstrably legitimate from a business standpoint?

• Is the timing sufficiently separated from a protected event to remove the risk of taint?


Policies or Work Rules

• Are there published policies or work rules that apply?

• Are we following the terms?


Progressive Discipline

• Did employee get notice of what was wrong?

• Did we give employee a chance to fix the problem?

• Did we warn employee what will happen if problem not fixed?

• Did we set a deadline?


Public Policy• Whistleblower?

• Statutory prohibition?

• Other policy claim?


Termination Red Flags• Criticism started after the employee

“complained” about something

• Termination is inconsistent with performance evaluations

• The termination is a surprise

• No documentation, or very little


Conclusions of Risk Assessment• Whether to offer severance

• Managing security and safety issues


Termination Checklist – Single Employee


Best Practices• The “Value of Getting the Story Straight”: Get direct

answers from those who are in the “know”− Cat’s Paw Theory

• Create a termination format to be used for:− Talking points− Action to be taken− Responding to EEOC/DOL/OSHA− Preparing interrogatories/discovery responses for lawsuits


Best Practices

• Door A or Door B ApproachProvides an opportunity for employee to have a “voice” in what action will be taken

Offering an alternative position/demotion may be more palatable to the individual rather than having no job at all (especially in this economy)

If feasible, allowing the employee to “elect” his/her own option (and having a signature to prove it) may assist the Company should the need arise to defend claim later.


Best Practices

• Exit InterviewsHave two people present

Get the bad news now (if any) rather than later (work injuries, alleged discrimination, unpaid business reimbursements, potential complaints such as those known as “whistleblowing”)

− Stay consistent on reason for termination

For those who have restrictive covenants, remind them of their post-employment restrictions

− Consider severance agreement adding post-employment restrictions


Practical Tips for Protecting the Workplace From Departing Employees

• Don’t be caught off guard: Put in place procedures for handling employee departures

• Ensure former employee has no access to the employer’s facilities or computers, including any type of remote computer access; no right to re-enter

• Ensure the prompt return of all company property and proprietary information

Computer Fraud and Abuse Act, 18 U.S.C. § 1030

• Consider retaining security personnel to reduce the risk of workplace violence


Termination: Informing the Employee

• Be firm, honest, and briefInform employee that he/she is being terminated

• If appropriate, state the reason for terminationBe clear and conciseDo not apologize

• Do not make any contrary statementsPretextAvoid complimenting or counseling the employee

• Ensure compliance with applicable laws, such as COBRA, disability, benefits

• Termination pay


Restrictive Covenants

• Remind Employee of any post employment obligations:

Non-Competition: Prohibits a former employee from competing against employer for a specified period of time within a specified geographic area

Non-Solicitation: Prohibits a former employee from soliciting an employer’s customers for a defined period of time

Non-Recruitment/Anti-Piracy: Prohibits an employee from soliciting the employees of his or her former employer for a defined period of time

Confidentiality and Non-Disclosure: Protects proprietary and confidential information, including trade secrets, pricing, customer information, etc.


Enforcing Restrictive Covenants: Reasonableness?

General Standard

A post-employment restriction is unreasonableif the restraint is greater than necessary toprotect the employer’s legitimate, protectableinterest or if that interest is outweighed by thehardship to the employee and the likely injuryto the public.


Enforcing Restrictive Covenants: Reasonableness?

• Scope of Activity Enjoined

• Geographic Restrictions

• Duration

• Blue Pencil DoctrineGrammatically Severable

Step-Down Provisions


Post-Termination Risk Avoidance• Only tell other employees that the individual is

no longer with the companyDefamation/DisparagementInvasion of Privacy

• Do not give reasons or explanations regarding prior employees

• Job referencesRetaliation blacklisting statutes

• Responding to unemployment claimsTo dispute or not to dispute?


Post-Termination Risk Avoidance

• Litigation hold noticesE-discovery

Spoliation

− BP’s motion for monetary sanctions against Halliburton − Early dismissal for destruction of relevant documents (Peal v. Lee,

2010 Ill. App. LEXIS 760 (Ill. App. Ct. 1st Dist. July 30, 2010)− Default judgment (Gentex Corp v. Sutter, 2011 U.S. Dist. LEXIS

122831 (M.D. Pa. Oct. 24, 2011)− Jail time for civil contempt (Victor Stanley, Inc. v. Creative Pipe,

2010 U.S. Dist. LEXIS 93644 (D. Md. 2010)


Termination Considerations – Multiple Employees


Risk Assessment

• Reduction-in-ForceClearly articulated process and selection criteria?

− Loss of business segment, cutting costs− Eliminating unnecessary/duplicative departments

Disparate Impact analysis: Employee challenges RIF selection (or other facially neutral policy or process) as having a disproportionate impact on employees of a particular protected class (e.g., race, gender, disability, age) when applied.

− Impact justified by business necessity? Reasonable factors other than age?

− “Horse-trading”: Choosing alternate employees for RIF to prevent disproportionate statistical impact

Federal WARN Act, State Mini-WARN Acts


Pre-RIF Actions

• Identify justification for RIF

• Test that justification

• Develop a business plan

• Evaluate alternatives

• Freeze hiring, promotions, and salary increases

• Consider laying off temporary workers

• Work sharing, reduced work weeks

• Reduction in authorized overtime

• Rely upon attrition


Methods of Selection

• Length of Service

• Job Elimination

• Salary

• Closing Plant or Entire Department

• Project or Client Assignment

• Skill/Merit


Workers’ Adjustment and Retraining Notification Act (WARN Act)

• Who is covered by WARNThe WARN Act applies to employers who have 100 or more employees

• 60 days’ advance notice of:Plant closing: employment site shutdown affecting 50+ employees in 30-day periodMass Layoff: employment loss of 500 or more employees in 30-day period, of 50-499 employees (if they constitute 33% of employer’s active workforce)


WARN Act

• Written notice to: The chief elected officer of the exclusive representatives or bargaining agency of affected employees;

Unrepresented individual workers who may reasonably be expected to experience an employment loss;

The State dislocated worker unit;

The Chief elected official of the unit of local government in which the employment site is located.


• What goes in the notice: The name and address of the affected employment site;

A statement whether the proposed action is a plant closing or mass layoff;

A statement whether the proposed action is temporary or permanent;

The expected date when the individual employee will be separated;

The job classification that may be affected;

The expected date of the first separation and the anticipated schedule for making separations;

The job titles of positions to be affected and the number of affected employees in each job classification; and

The names of the union(s) representing the affected employees.

WARN Act


WARN Act• Exceptions

Temporary facilities and undertakings of limited duration.Strikes and lockouts.Natural disasters. Unforeseen business circumstances.Faltering business.

• Penalty for Compliance Owing each affected employee backpay and benefits

Owing each affected employee attorney’s fees and costs

Owing the government $500 per day


State Law Considerations

• State mini-WARN lawsCalifornia WARN (Cal-WARN)

− Expands WARN to cover business enterprises that do not employ enough workers to be subject to WARN

− Expands WARN to RIF that involve smaller groups of employees

60 days’ notice


Severance Agreements

• Background Of The Older Workers Benefit Protection Act (“OWBPA”)

• Passed by Congress in 1990

• Amends Age Discrimination in Employment Act (“ADEA”)

• ADEA prohibits employers from discharging employees aged forty and over based on age

• ADEA prohibits discrimination against same group based on age with respect to compensation, terms, conditions, or privileges of employment


Waivers And Releases Of Claims Under The OWBPA

• OWBPA requires waivers or releases to be “knowing and voluntary” meaning these elements must be met:

The waiver is part of a written agreement between employer and employee that is clear and understandable;

The waiver specifically refers to claims arising under the ADEA;

The employee is given something of value in addition to what he or she is already entitled to in exchange for agreeing to the ADEA waiver;

The employee is advised in writing to consult an attorney prior to signing the waiver;


“Knowing And Voluntary”

The employee does not waive the right to claims that may arise after the date the waiver is executed;

The employee is given at least twenty-one days to consider the waiver (or forty-five days in the case of an exit incentive program or group layoff); and

The employee is given seven days after signing the waiver to revoke it.

• “Knowing and voluntary” standard is strictly construed

• Waivers should be drafted with the individual employee’s level of comprehension and education in mind.

• Avoid “technical jargon” and “long, complex sentences”


Exit Incentive Programs And Other Employment Termination Programs

• OWBPA has additional requirements for exit incentive programs and other employment termination programs

• Exit Incentive Program = voluntary programs whereby two or more employees are offered additional consideration in exchange for their resignation and signing a release or waiver of claims

• Other Employment Termination Programs = a group of employees has been or will be terminated and additional consideration is offered in exchange for signing a waiver of claims


Exit Incentive Programs (Continued)

• Employees under either program must be given forty-five days in which to consider the waiver or release

• In addition to other factors discussed above, release or waiver must also disclose:

The decisional unit, i.e. a defined group from which employers decide who will and will not be offered additional consideration for signing a waiver;

Any eligibility factors for program;

Any applicable time limits;

The job titles and ages of all employees eligible or selected for the program; and

Ages of all individuals in the same “job classification” or “organizational unit” who are not eligible or were not selected for the program.


Credit Information

• For those you who require CLE/CPD or HRCI credits please note the following states have been approved, California, Florida, Ohio and Texas; as well as Arizona, New York, and New Jersey through state reciprocity laws. CPD and CPE have also been approved. If you require credit in a jurisdiction not pre-approved we can assist.

• Please write down the affirmation code. Tomorrow you will receive an email with a link to an online affidavit. Open this link and complete the form. Don’t forget to include the affirmation code on the form. Once completed, PDF a copy of the signed form to Robin Hallagan at [email protected]

• Remember to complete the webinar survey immediately following the end of this presentation. You are required to complete this evaluation before receiving a certificate of attendance.

39 Offices in 19 Countries

BEST PRACTICES: FIRING – MINIMIZING RISK AND AVOIDING LITIGATIONJune 25, 2013

Presented by:

Tara A. [email protected]

Laura Lawless Robertson [email protected]

Documents

HR Best Practices Webinar Series: Firing – Minimizing Risk ... › ~ › media › files › ... · Retaliation • General trend toward broader protection against retaliation in