CLASS FIVE- EVALUATIONS OF EMPLOYEES, AND TERMINATION OF EMPLOYMENT

Employee Evaluations Evaluations should be based, as much as possible on objective criteria. Employees who receive negative or mixed reviews sometimes bring defamation suits. However, employers are likely to be covered by qualified privilege so long as the criticisms are job-related rather than personal attacks.

DISCIPLINARY POLICIES OF EMPLOYERS Oral warnings – First line of action, use to informally resolve disputes or problems Written warnings – When oral warnings fail or otherwise not effective Suspensions – Used for more severe infractions Meeting with Personnel Manager and Employee

TERMINATING EMPLOYMENT Employee relationships end voluntarily or Involuntarily Employment at Will – Either employer or employee can end the employment relationship at any time Contract claims Can be express or implied, written or oral An employment agreement for a definite term may supersede the presumption of employment at will.

THE IMPLIED CONTRACT IN EMPLOYMENT LAW Contract not expressed but created by other words and conduct of the parties based on the nature of the relationship Example: Lucy McGillicuty received a written offer of employment, outlining the salary and bonus plans, in addition to a health and vacation benefits package. She resigned from her prior position and after six months, only to find that her new employer had not followed through on everything that was in her employment offer and resigned. Lucy could argue a breach of an implied contract.

REMEDIES IN CONTRACT CLAIMS Reinstatement – Not available for breach of employment contract claims Back pay – Defined as present value of wages and benefits employee would have earned for remainder of employment term less any wages and benefits employee earned or could have earned in the interim Future lost wages – Amount of money employee would have earned from date of trial to conclusion of employment contract Loss of earning capacity – Many states do not permit recovery for this Punitive/exemplary damages – When defendant acted with recklessness, malice or deceit. Duty to mitigate damages by finding new employment.

DOCTRINE OF PROMISSORY ESTOPPEL Elements of a promissory estoppel claim: Employer made promise, on which the employee reasonably relied, to his or her detriment Employee’s reliance reasonably forseeable by employer EXAMPLE: A paralegal, who has an disabled child, leaves Law Firm A in favor of a job at Law Firm B, based upon the representation of a Law Firm B partner that the firm’s health coverage includes occupational therapy. If the paralegal can show that she detrimentally relied on this promise and later found that the employer’s health insurance did not cover occupational therapy, she would have a case for damages.

Theories of Liability Arising Out of Termination of Employment Discharge in violation of law or public policy (eg. Discharge on basis of race, sex disability age, retaliatory discharge Discharge in violation of implied covenant of good faith and fair dealing- 13 states recognize this doctrine. Constructive discharge – employer makes working conditions so intolerable that a reasonable person in the employee’s position would have felt compelled to resign. Intentional Infliction of Emotional Distress – Allegations that employee’s discharge was carried out in an extremely abusive, degrading, humiliating manner. The conduct must be truly outrageous, and the tort will not arise in the ordinary discharge case.

Discharges Which Violate Public Policy An employer cannot fire employees for the following conduct 1. filing a workers’ compensation claim 2. whistle blowing-reporting health and safety violations 3. honoring a subpoena to appear in court and testifying truthfully (even though the testimony is unfavorable to the employer) 4. assisting in government investigations-e.g. in compliance with requirements of Sarbanes-Oxley law 5. refusing to perform illegal or unethical act

Protections for Employees Who Report Safety or Ethics Violations Whistleblower laws- both state and federal laws provide protections for employees who report health and safety violations to corporate management or to government regulators Attorneys are subject to a high standard of ethics- In Wieder v. Skala, 80 NY2d 628, 593 NYS2d 752 (1992), the court held that an associate cannot lawfully be fired for bringing to the managing partners’ attention unethical conduct committed by another attorney in the firm.

Employer Promises and Reporting of Illegal Conduct In Mulder v. Donaldson, Lufkin & Jenrette, 208 AD2d 301 (1st Dept., NY 1994), a securities broker alleged that he was discharged for bringing to the attention of corporate managers violations of securities law committed by other company employees. The court refused to extend the Wieder v. Skala rule to securities dealers. However, the court allowed Mulder’s action to proceed on a different theory- the employee manual stated a policy of encouraging employees to report securities law violations, and specifically stated that employees making such reports would not be subject to retaliation for doing so.

After-Acquired Evidence-Limitation on Recovery When wrongful discharge or discrimination claims are brought, it is common for employers to conduct investigations to find out whether they would have had a lawful excuse to fire the employee. Sometimes they find something. In McKennon v. Nashville Banner Pub. Co., 513 US 352 (1995), the employer found that an age discrimination plaintiff could have been discharged for copying confidential corporate documents. The court held that McKennon had a cause of action for age discrimination, but that accrual of damages ended as of the date the employer discovered the misconduct.

Defamation Claims Arising Out of Employee Discharges Any communications within or outside the company relating to the discharge must be worded carefully. In the event that an employer communicates to others the details of the discharge, the employer’s “qualified privilege” defense will probably be upheld if the managers furnish the information only to those who need to know it, and speaks only regarding matters directly relevant to the reason for discharge. However, qualified privilege does not apply where the employer speaks with malice, i.e. knowledge of falsity or reckless disregard for the truth.