Terminations in the Workplace: Best Practices for Avoiding Liability in 2014 Presented By: Tevis Marshall Ogletree, Deakins, Nash, Smoak & Stewart, P.C. Riverfront Plaza – West Tower 901 East Byrd Street, Suite 900 Richmond, Virginia 23219 804-663-2333 tevis.marshall@odnss.com

Sometimes it’s not QUITE this simple…

Learning Objectives Obtain a general understanding of the federal and state laws implicated by the termination process. Learn how to conduct thorough investigations prior to a termination. Learn how to complete a termination with the least possible risk to the company.

Terminations in the Workplace Pre-Termination Disciplining Investigation Termination Company policies and practice Legal restrictions Post-Termination Payment of wages/continuation of benefits

Pre-Termination Disciplining Employees Federal employment laws to consider: Title VII of the Civil Rights Act (Title VII) – Prohibits discrimination in employment on the basis of race, color, religion, sex, or national origin. Age Discrimination in Employment Act (ADEA) – Prohibits discrimination in employment on the basis of age. Covers employees and applicants for employment who are 40 years of age or older. Equal Pay Act (EPA) – Prohibits gender-based discrimination in rates of pay to employees who are performing “equal work” in the same establishment. The Americans with Disabilities Act (ADA) – Prohibits discrimination in employment on the basis of an individual’s disability.

Pre-Termination …Federal employment laws to consider: Family Medical Leave Act (FMLA) – Allows qualified employees of covered employers to take leave for the birth or adoption of a child, a serious health condition or certain military obligations. National Labor Relations Act (NLRA) – Prohibits discrimination against employees based on the exercise of protected concerted activity (not exclusively union activity). Anti-Retaliation Provisions – Most federal anti-discrimination laws prohibit retaliation against employees by employers for exercising their rights to seek protection under those laws.

Pre-Termination State law doctrines to consider: Wrongful Termination – Very narrow doctrine that protects employees based on (1) refusal to engage in unlawful act; (2) engaging in statutorily created right; (3) public policy. Breach of employment contract – Does the termination violate an employment agreement? Workers’ Compensation – Employees are protected from retaliation for filing WC claims. Defamation / Slander – Internal correspondence and performance reviews can be defamatory. Negligent retention – Virginia does not recognize claims for negligent retention when the injury occurs to a co-worker, but does recognize this tort if a third-party is injured. 

Pre-Termination Thorough investigation and documentation is critical When faced with an employee who has engaged in misconduct, or who has exhibited poor job performance, employers should take a series of steps to deal with the problem and impose an appropriate level of discipline.  

Pre-Termination Rule #1 INQUIRE – Find out what actually happened. Talk to witnesses. Check production records, timecards, absentee reports, doctors’ notes, etc. Investigate each case carefully before reaching any conclusions. Review the employee’s personnel file before termination. Is there a history of negative evaluations? Is there a history of wage increases or promotions? Has the employee received special training? Under certain circumstances, it may be appropriate to suspend the employee pending an investigation. Be concerned with preserving self-esteem and dignity.  

Pre-Termination Rule #2 COMMUNICATE – Conduct a “due process” interview. Interview the employee. The presence of another management official may be necessary. Ask the employee to provide his or her version. If the employee raises factual allegations that have not been fully investigated, they should then be investigated. In reviewing evidence that is harmful to the employee, get the employee’s position on such matters before termination. Review personnel files and talk to other representatives of management to determine if there is any past practice involving the same or similar conduct with other employees before termination.  

Pre-Termination Rule #3 DOCUMENT…but don’t “over-document.” Before a decision is made, check the employee’s personnel file and work record. Are there prior warnings or violations concerning the same or similar offense? Are any warnings too old or too unrelated? If your company has progressive discipline, has it been followed? Before termination, consider taking written statements from all witnesses. However, before taking written statements from management employees, you should consider consulting an attorney because those statements may be binding on the company.  

Pre-Termination Rule #3 (Continued…) DOCUMENT Maintain complete and accurate personnel records regarding the termination. Allow the employee to read any disciplinary action report at the time the discipline is administered and express in writing any comments concerning the matter, including his agreement or disagreement with the decision. Ask the employee to sign the report, acknowledging that he had an opportunity to read the report and provide comments. If an employee refuses to acknowledge receipt of a disciplinary action, another representative of management should be called in to witness the disciplinary action and to sign the report as a witness in the presence of the employee.  

Pre-Termination Rule #4 BE CONSISTENT - Examine comparable conduct and discipline of other employees. After all witnesses are interviewed, but before a final decision is made, determine whether similarly situated employees have been treated more favorably, or whether the supervisor involved has shown any bias. Be consistent in the enforcement of policies and avoid showing favoritism. To ensure consistent enforcement of rules and policies, a central department (Human Resources or Personnel Department) should be involved in all cases of disciplinary action. Failure to terminate an employee who openly defies management or who consistently violates company rules may cause the Company serious legal problems and low morale within the organization.  

Pre-Termination Rule #5 EVALUATE AND ACT – Decide on appropriate discipline. Determine if the employee had knowledge or constructive knowledge of the rule or policy at issue. Findings and conclusions in a disciplinary case should be based upon evidence that would be admissible in a hearing or trial and should not be based upon conjecture or guesswork. Be cautious when taking disciplinary action against employees who are involved in protected conduct. Serious doubts involving credibility issues should generally be resolved in favor of the employee who is charged with the violation. If it appears after having taken disciplinary action that an injustice was done, reopen the case for further investigation before any legal action has been taken against the Company.  

Termination Review the Termination Checklist Does the employee have an employment contract? If so, is the termination in compliance with the terms of the contract? Does the termination comply with the terms of any applicable employee handbook or manual? Has the employee received a copy of the handbook or manual? Do you have a signed acknowledgement form? Is the employee covered by a union collective bargaining agreement? If so, will the termination violate any term of the agreement? Will the termination violate the National Labor Relations Act? Is the termination based on union activity or other protected concerted activity? Is the person a member of a “protected group” by virtue of his race, color, religion, sex, national origin, disability or age?

Termination Review the Termination Checklist What is the company’s past practice in situations like this? Is this person being treated the same as other employees have been treated in similar situations? If the person is “disabled,” can he or she be “reasonably accommodated” as required by the ADA? Will the termination violate a state statute or public policy against discharging employees for such things as serving on a jury, filing a workers’ compensation claim, reporting violations of the law, etc.? Is there any inference of retaliation raised by the termination? Has this employee filed a charge of discrimination in the past or otherwise complained of discrimination or harassment? Does the company follow a system of “progressive discipline”? If so, has the “progressive discipline” process been followed?

Termination Review the Termination Checklist Is all necessary documentation in the personnel file (e.g., statements documenting counseling sessions and written performance evaluations)? If the termination is for poor performance, do the employee’s performance evaluations and history of wage increases reflect this? Has the employee received the training normally afforded other persons in the same job classification? Has a manager met with the employee, heard the employee’s side of the story, and reduced the results of the interview to writing? Have all of the supervisors and managers involved in the decision-making process been objective?

Termination Termination Meeting Arrange a meeting with the employee. Be sure that at least two people are present in addition to the employee when the meeting occurs. Inform the employee of the Company’s decision. Don’t argue or engage in a debate with the employee. Be sure the employee returns all company property.  Discuss COBRA rights. Inform employee that a letter will follow. Keep the meeting short and concise.

Post-Termination Once the termination has been conducted: Give notice to payroll provider/benefits provider to send COBRA Notice. Restrict the employee’s access to computer networks, e-mail, voice mail, etc. Ensure that the employee’s final paycheck is for the proper amount, and that it is issued no later than the next regularly scheduled pay date. If severance is being offered, be sure the severance agreement is signed and returned prior to paying. If the employee is over 40, there are special timing requirements under the Older Workers’ Benefits Protection Act (OWBPA) to consider. Do NOT pay severance until the statutorily required seven (7) day revocation period has ended.

QUESTIONS? Tevis Marshall 804-663-2333 tevis.marshall@odnss.com