Monday, July 28, 2014

Home Magazine Wrongful termination: A bad decision can be worse than a bad employee.

Wrongful termination: A bad decision can be worse than a bad employee.

Features - Human Resources

This is the fifth in a series of the top 10 most serious HR mistakes landscape contractors make.

Steven Cesare, Ph.D. | March 16, 2011

Landscapers are very straightforward people. When they hear someone say something, landscapers take it at face value and act accordingly. So, when landscapers are told their “at-will” policy enables them to fire an employee at any time with or without reason, they believe they have complete discretion to end an employment relationship on their terms. While conceptually true, the onslaught of legislation protecting employee rights has not only minimized much of the employer’s discretion, it has created many implied protections against the “at-will” policy that are now frequently used against the employer.

Despite possessing an “at-will” policy, if an employer terminates an employee incorrectly, the employer can be sued for wrongful termination, which can have serious financial impact on an organization (e.g., reinstatement, lost wages, legal fees, punitive damages).


WRONGFUL TERMINATION.
Wrongful termination claims are usually based on one of three points:

  1. The termination must have been without “cause” and the employee had an express employment contract or an “implied” contract based on the circumstances of hiring.

    This point addresses formal contracts that stipulate employment for a stated period of time, as well as informal contracts illustrated by various statements made to the employee (e.g., “employee handbooks that reference ‘permanent employee’ status” and “you’ll always have a job as long as I am here”). Employee termination under those conditions represents a breach of contract, severely undermines the company’s “at-will” policy, and serves as powerful evidence for losing a wrongful termination lawsuit.

     
  2. There is a violation of statutory prohibitions against illegal discrimination. (e.g., race, gender, sexual preference, age).

    Landscapers must avoid any type of discrimination when terminating an employee. Moreover, they should have a strongly-worded EEO policy substantiating their commitment against illegal discrimination toward any protected class as defined by local, state, or federal law.

     
  3. The termination was contrary to “public policy” like in retribution for exposing dishonest acts of the employer.

    Wrongful termination occurs if an employee is terminated for:  identifying an illegal company action, refusing to perform an illegal or unsafe act, or filing a workers’ compensation claim.


BEST IN CLASS PRACTICES.
These best-in-class practices can help landscapers maximize the certainty by which they can terminate employees without enduring wrongful termination claims.

  • At-will policy. Have a strong at-will policy, positioned in the five proper locations in the employee handbooks, with a signed acknowledgment form from every employee. 
  • Documentation. Have ample, convincing and accurate documentation that supports terminating an employee legally and withstanding wrongful termination claims.
  • Performance management.  Have effective performance management programs (e.g., job descriptions, performance evaluation, action plan) that address individual performance issues.
  • Avoid rash decisions. Other than cases involving clear policy violations (e.g., drug use, theft, violence), don’t fire employees quickly; follow a consistent and evidence-based process. 


SUMMARY.
Landscape companies must understand their “at-will” policy is not an absolute standard and fortify their “at-will” policy with comprehensive, supportive, and efficient programs (e.g., performance management, employee handbook, training) that strengthen their ability to terminate unsatisfactory employees in a legal, fair, and timely manner.

The author is an industrial psychologist with the Harvest Group, a landscape consulting group. Send your questions to scesare@giemedia.com.