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HOW TO TERMINATEEMPLOYEES PROPERLY
Dos and Don'ts for Investigating Employee Misconduct
Employee guidelines, such as the following, should be used so that employers conduct thorough investigations of an employee's misconduct and avoid lawsuits for defamation and invasion of privacy:
- Do ascertain whether legal counsel should be involved, especially if the employee's termination may be challenged.
- Do conduct a complete investigation.
- Do obtain corroborating statements from other employees.
- Do allow the employee to give an explanation of the events.
- Do conduct a prompt interrogation.
- Do obtain a signed admission of improper conduct from the employee (if possible).
- Do advise your other employees that you are not at liberty to disclose the reason for the employee's discipline or dismissal.
- Do not threaten your employees with prosecution or loss of their jobs.
- Do not touch your employees or make threatening gestures while you are questioning them.
- Do not restrain your employees from leaving the room while interrogating them.
- Do not ask employees about private matters unrelated to their misconduct.
- Do not give false or inaccurate reasons for termination.
Precautions to Prevent Wrongful Discharge Suits
The following procedures should be implemented by all employers to reduce the risks of liability exposure in discrimination suits for wrongful discharge:
- Provide written policies and rules to inform employees of the type of conduct that will result in disciplinary action and discharge.
- Establish a review procedure to verify that all discharges are for legitimate, nondiscriminatory business reasons.
- Document all personnel actions regarding the employee's disciplinary history, including performance evaluations and counseling notes.
- Conduct exit interviews (see form at the end of this chapter) with all terminated employees to confirm the reasons for their termination and to determine whether the employee believes that the termination was for unlawful reasons. The exit interview is a prime opportunity to obtain statements from the employee (e.g., admissions of inadequate performance or misconduct).
- Be sure that the dismissal is consistent with past practice and in compliance with all procedures and policies in personnel manuals.
- Alternative dispute resolution mechanisms, such as mediation and arbitration, should be used to resolve employee discrimination complaints.
- Liability insurance policies should be reviewed by the employer's legal counsel to make sure the policy covers discrimination claims.
- Policies and procedures contained in handbooks, manuals, job requisition orders, and corporate codes of ethics should state a strong and comprehensive policy against discrimination in the workplace.
- Managers and supervisors should be trained to avoid discriminatory acts. They should be sensitized to harassment or stereotyping and should learn how to deal with disabled employees in compliance with the Americans with Disabilities Act.
- Obtain a release and waiver from the employee stating that the release and waiver is "voluntary and knowing" and provides for severance pay, outplacement services, nondisparagement, confidentiality, group health insurance coverage, waiver of unemployment, and accrued vacation pay, and states that the employee has consulted with his or her own attorney.
Employers may obtain waivers of the Age Discrimination in Employment Act if the waivers meet the following seven requirements:
- They are part of an agreement between the employee and the employer.
- They are written in ordinary English.
- They refer specifically to rights or claims arising under ADEA.
- They do not cover rights or claims that may arise after the date waivers are executed.
- They can be exchanged but only if the employer provides additional consideration (compensation in addition to benefits and severance pay they would get anyway).
- Employees are given 21 days (45 days if leaving because of buy-out incentives or mass layoffs) to decide whether to sign the waivers.
- Employees are advised in writing to consult with an attorney before signing the waivers.
Accused of Discrimination?
The EEOC investigates charges of employment discrimination, determines whether a reasonable basis exists for charges, and seeks to informally conciliate unlawful employment practices. Information supplied by the employer to the EEOC during an investigation can provide the basis for court action by either the employee or the EEOC. If your business is charged with employment discrimination, make sure you comply with the following:
- Do not independently contact the EEOC. Contact your attorney immediately to handle the charges.
- As soon as you receive the EEOC charge, make a thorough investigation.
- Your staff should be courteous at all times when dealing with the EEOC investigator.
- Your attorney should be present during any interviews of management personnel because their statements can bind you as the employer.
Representation by an attorney from the inception of a discrimination charge can prevent lawsuits and large monetary awards.
Retaliatory Discharge
Employees have a right to sue for retaliatory discharge if they are fired because of their efforts to compel their employers to comply with the law. Courts have held that employers may not discharge an employee who (1) insists that an employer comply with the Occupational Safety and Health Act (OSHA) standards or the food and drug laws; (2) furnishes evidence to law enforcement officials regarding criminal violations of co-employees; (3) refuses to give perjured testimony on an employer's behalf, violate a statute, commit a crime, or illegally alter pollution control records; (4) refuses the sexual advances of supervisors; (5) promotes unionism; (6) serves on a jury; (7) exercises his or her rights under workers' compensation law; (8) acts as an election official; or (9) cooperates with an official investigation.
Not covered under this right of action are employees who are discharged because of a private dispute, even if the employer's actions appear arbitrary or unfair. The issue may involve such matters as internal management disputes, taking excessive sick leave, an employee-shareholder discharged for exercising the right to examine the company's books, an employee who impugns the company's integrity, a refusal to take psychological stress evaluations, attendance at night school, or misuse of Christmas funds.
Whistle-Blowers
The False Claims Act, also known as the "Lincoln Law," "Informer's Act," or the "qui tam" statute, permits a private individual with knowledge that the federal government is being defrauded to file suit on behalf of the government to recover compensatory damages, stiff civil penalties, and treble punitive damages. The civil case is commenced by filing a claim with the government. Even if the government chooses not to intervene, criminally or civilly, the whistle-blower can still pursue the action and recover a share of the government's ultimate recovery, costs, and attorney fees. The whistle-blower will be required to pay the prevailing party's attorney fees and expenses if the case is lost or if it was frivolous, vexatious, or harassing. Examples of whistle-blower suits include the following:
- An employer sells blood plasma to the federal government for treating Medicare and Medicaid patients and veterans. The employee was harassed, threatened, intimidated, and eventually dismissed after she complained to her boss that the product was improperly tested for the presence of HIV and hepatitis C before it was sold to the government. The employer's contract with the government guaranteed that the product would be properly tested. The employee's reporting of the faulty testing was protected under the act, and her allegation of retaliatory discharge was sufficient.
- A nursing home's failure to provide adequate nutrition to patients in violation of the Nursing Home Reform Act while billing Medicare or Medicaid for nursing home services constituted a false claim within the meaning of the act.
- The lack of supervision of a store's cash register constitutes a knowingly submitted false claim where food stamps were exchanged for cash instead of food.
Employers May Be Jailed
An employer who discharges or penalizes an employee who, upon notice to his or her employer, is absent as a result of a subpoena to attend a criminal trial as a witness, has acted in criminal contempt of court and is subject to punishment.
Reprinted with permission from the Upstart Small Business Legal Guide by Robert Friedman
Copyright © 1998 © 1993 by Dearborn Financial Publishing, Inc.® All Rights Reserved.
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