Terminator Salvage: Five Thoughts to Reduce Employment Termination Exposure

RaymondWishing this was the title to the next installment of the “Terminator” franchise? No need to wait for Hollywood producers to get on board. Employers can learn a great deal about terminations from the original “Terminator.” In fact, its central and often overlooked message is one that rings true for all employers – including the Terminator’s own “employer,” SkyNet – the work of a bad, poorly prepared, or rash terminator always comes back to haunt the employer. Arnold’s cyborg itself brilliantly summarized this truth in his famous one-liner: I’ll be back.

To decrease the adverse effects of their terminators, employers should consider these five points before approving an employee termination:

1. Are you being “fair”? When employers and former employees end up in court over a termination, juries often make their determinations based on whether they feel the employer was “fair” to the employee, even if the employer has a viable defense. Further, although terminated employees will initially be upset, they are more likely to refrain from filing a lawsuit when they feel they were treated fairly. Employers may not be required to provide employees with a warning before cutting them loose, but, when circumstances permit, employers should give employees prior notice that their conduct is unacceptable and must be corrected to avoid termination. Additionally, employers should be consistent with how they treat similarly situated employees regarding similar conduct. Inconsistent disciplinary actions for similar conduct can lead to claims of discrimination on the basis of race, sex, disability, age, national origin, religion and other protected statuses.

2. Does a contract, policy, or established practice prohibit or delay termination? Employment in Michigan is presumed to be at-will, meaning that the employee and/or the employer may terminate the relationship at any time, for any lawful reason, with or without advance notice. However, employment contracts, personnel policies, and practices can alter the presumption and require an employer to provide advance notice or an opportunity to correct the behavior or meet other conditions prior to termination.

For example, progressive discipline, “just cause” and internal grievance or conflict resolution policies may require that certain actions be taken and/or documentation be prepared before an employee can be let go. Employers should review their documents and policies and consider any established practices in advance of a firing to determine whether immediate action should be delayed.

3. Is the employee a member of a protected class? Certain federal and state laws protect employees from discrimination on the basis of race, sex, disability, age, national origin, religion and other categories. Additionally, certain laws protect employees from being discriminated against or terminated because they engaged in certain activities, including but not limited to filing a complaint of discrimination or sexual harassment, complaining about wages and other terms and conditions of employment, requesting or taking certain medical and military leaves, filing a claim for workers’ compensation, and reporting illegal or improper activity of the employer (also called “whistleblowing”).

However, being in a protected class does not necessarily mean the employee should not be terminated. If termination is necessary, employers must be able to show that the termination would have occurred regardless of the protected status or activity. This showing can be difficult to make when there is limited documentation or the employee has recently engaged in protected activity. Thus, under those circumstances, employers should proceed with caution.

4. Does documentation support the reason for termination? When employees challenge their terminations, their personnel files will be reviewed for consistency with the employer’s reason for termination. If the employee is in a protected class, any inconsistency can suggest that the provided reason is pretext for discriminatory action.

For example, if an employee who recently reported sexual harassment is terminated for poor performance and the personnel file includes only positive performance evaluations, the employer’s reasoning is suspect. Therefore, employers should properly document performance deficiencies, misconduct, warnings and corrective actions as they occur so that further disciplinary action, including termination, can be taken when needed.

5. Are the terminators prepared? Except in the most extreme situations, a termination should be planned so that the terminators can prepare to deliver the message, collect employer property, and escort employees to gather their personal things and leave the premises. Usually the employee’s supervisor and the human resources representative or another member of management should attend the meeting. This combined presence signals a unified front and offers the employer an additional witness in case the employee later contests what happened at the meeting. The meeting should be conducted privately and at a time enabling the employee to leave before the rush of other employees – after all, preserving the dignity of the employee reduces the likelihood of a lawsuit. Once the employee leaves, the terminators should document the details of the meeting, including any statements made by the employee. This document may be useful if the employee later challenges the termination.

Failing to thoughtfully deliberate and plan for a termination can significantly cost an employer in terms of dollars and the expenditure of human capital. Employment claims are particularly expensive as they often proceed through an administrative process before advancing to litigation. To reduce exposure on any terminator “Judgment Day,” employers should consider these points and consult legal counsel before terminating an employee.

Lindsay J. Raymond is an associate with Smith Haughey Rice & Roegge in Traverse City, practicing labor and employment law.