Wrongful Termination Lawsuits: Are You That Kind of Boss?

Terminating employees is a necessary part of business. The law recognizes that corporations exist to increase shareholder wealth, and employees who do not produce adequate results must be downsized to make room for more productive employees. However, the law also prevents discrimination, coercion, and abuse. These competing public policies are going to become part of your life now if you're the new boss - they are called labor law.

Avoiding 10 kinds of discrimination

Labor law is regulated by a large number of federal and state statutes. Broadly speaking, severe workplace harassment is forbidden. In general, discrimination against members of a protected class is forbidden. Protected classes include: race, religion, color, national origin, sex, genetics, disability, familial status, veteran status, and age.

State law varies. Usually, the employee may be terminated for no reason or any reason, provided that the employee was not subject to a contract with a definite term, that the reason for termination was not otherwise prohibited by law, and that the employer did not breach the implied covenant of good faith and fair dealing. Some states expand on or restrict these rules.

Handling employee terminations

In your new management position, labor law may seem like a problem. Companies often bring new management into the fold to improve the productivity of a particular group or a department, and you are going to be expected to assess your staff and make tough personnel decisions. This can include terminating an individual's employment.

In some situations, you may want to terminate an employee, but you've failed to document any of the employee's misdeeds. Assuming that the employee won't take action against the company could be "putting your head in the sand," and can cost the company substantially. Reassigning the employee to a degrading or lower position in order to force him or her to quit may seem like a clever way to circumvent the law. But think again, this could create a hostile work environment, and productivity will plummet.

The optimal solution for you in dealing with problematic employees is to fairly document the employee's actions in great detail. Performance reviews should reflect the employee's performance or lack thereof, acts of insubordination should be documented thoroughly, coworker complaints should be recorded, and failure to meet objectives should be noted. Verbal communication should be followed up with e-mail and memorandum. Thorough documentation can help counter claims of discrimination or harassment. Of course, reminds our legal adviser at the Georgia law offices of Page Perry, overdoing it with absurd amounts of documentation of petty grievances can backfire, and make you appear malicious. 3 Questions to consider first:

1. Is this employee a member of a protected class? Terminating a member of a protected class for business-related reasons is neither discriminatory nor illegal. However, disgruntled employees occasionally pursue frivolous claims against companies for wrongful termination.
2. Have I created a hostile work environment? Sexual innuendo, off-color humor, and abusive remarks may precede a complaint to a Labor Board.
3. Have I thoroughly documented this employee's actions? Documentation is absolutely essential!

A poorly executed employee termination can expose the company and the individual manager involved up to liability for violations of state or federal law. As always, if you're a manager with questions about the legality of a decision to terminate an employee, act carefully and seek legal counsel.

Ann Bailey is a former journalist and contributes research on behalf of the law offices of Page Perry, who represent clients in employment law, general business litigation and class action litigation. The Georgia based attorneys include national representation and routinely practice as co-counsel in various employment cases nationwide assisting other firms needing additional expertise.

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