Suppose you decide to terminate an employee as part of a reduction in force. You treat the worker the same as others selected for layoff and offer the same severance benefits. But the person turns around and sues, claiming the real reason you fired him was to retaliate for a discrimination claim he filed with the government years ago. One California employer was recently slapped with a multi-million dollar jury verdict in just such a case.
We’ll look at what went wrong and why you’re always at risk when you terminate someone who filed a complaint against you in the past-even when you seem to do everything by the book. With an extra measure of caution and some advance planning, though, it’s possible to reduce your chances of getting sued.
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Original Charges Settled
Gerald Verdine was a 30-year employee of McDonnell Douglas Corp., working as a foreman in its Long Beach facility. At one point during his career with McDonnell Douglas, Verdine had been laid off and had filed discrimination complaints with both state and federal agencies. The dispute was ultimately settled, with Verdine agreeing to drop his charges and McDonnell Douglas agreeing to rehire him.
Employee Laid Off Again
Four years later, Verdine was laid off again. His attorney, Robert M. Turner, told CEA that Verdine was informed he was being fired for lack of work. Yet one month later the company ran advertisements for new employees to fill the same position he had held. Verdine argued that there was plenty of work available at McDonnell Douglas and he was actually fired in retaliation for his earlier discrimination charges.
But McDonnell Douglas’ attorney, John Golper, told CEA that Verdine was terminated as part of an ongoing reduction in force in which almost a third of his department had been laid off over an 18-month period. According to company policy, terminated workers were not recalled if their old jobs became available again, Golper said. Instead, if Verdine had been interested, he should have sought one of the jobs himself.
Verdine, who is African-American and was 58 at the time of his termination, filed new charges with the state Department of Fair Employment and Housing and federal Equal Employment Opportunity Commission charging McDonnell Douglas with race and age discrimination and retaliation. While the case was pending, McDonnell Douglas offered to give Verdine his job back, but he refused.
Jury Awards Huge Damages
A jury awarded Verdine more than $2 million for lost wages and emotional distress, plus a stunning $26 million in punitive damages. Verdine is also asking that the company be ordered to pay his attorneys’ fees, bringing the total bill even higher. McDonnell Douglas is appealing the verdict.
Managing A High-Risk Termination
The jury’s huge award highlights the danger of firing employees who have filed complaints against you in the past. Here are some ways to reduce your legal risks:
- Use extreme caution. Even if you think you’ve done everything right, whenever an employee has made a complaint directly to you or a government agency in the past, it should raise a red flag. That’s true whether the complaint involved discrimination, harassment or a violation of safety or other laws. At a minimum, let plenty of time pass between the complaint and your action, and thoroughly document the reasons for the termination. If there are performance problems, make the worker aware of them and consider issuing a written warning first. If the firing is part of a reduction in force or work slowdown, document exactly how and why the employee was selected.
- Get a signed release. In high-risk situations, offer the employee additional severance benefits in exchange for signing a release of any employment-related claims. Keep in mind that you must follow special rules for waivers by employees age 40 and over.
- Consider rehiring the employee. The U.S. Supreme Court has ruled that if you make an unconditional job offer to an employee while a lawsuit is pending, the person loses the right to recover certain types of lost wages.
According to McDonnell Douglas’ attorney, one issue on appeal is likely to be whether Verdine is entitled to all the damages he was awarded because the company offered to give him his job back before the case went to trial. Although it won’t prevent you from being sued, such an offer can sometimes short-circuit an employee’s claim for damages.