Terminating Employees: Laid-Off Employee’s Bias Charges Crumble in Face of Employer’s Solid Documentation; 4 Prudent Practices

Economic pressure may be forcing you to cut your workforce. And you may wonder if you can do anything to reduce your legal risks if an employee you’ve targeted for layoff has recently returned from medical leave. As one employer that recently sidestepped an expensive lawsuit learned, the answer may lie in how scrupulous you are with your paperwork.

Employee Receives Poor Evaluation

Azita Rashti worked for accounting firm Miod & Co. in Los Angeles. When she was diagnosed with immune system cancer six months after starting work, the company allowed her time off for medical appointments and granted her a medical leave.Shortly after returning from the leave, Rashti received a poor review that detailed performance problems and customer complaints. The evaluation rated her as not meeting job requirements and required she immediately improve her performance. Rashti signed the evaluation. Two days later, Rashti went on leave again, claiming she was injured on the job.

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Business Takes a Hit

While Rashti was on her second leave, the firm lost a key client, suffering severe losses as a result. Miod & Co. reorganized and reassigned a partner who had spent most of his time servicing the former client to duties that staff had performed. When financial conditions didn’t improve, the firm laid off Rashti and another employee, both of whom worked in the department affected by the lost account. This occurred just a day after Rashti returned from her leave.Rashti sued, claiming Miod & Co. discriminated against her based on disability. The company responded that Rashti was terminated because of the company’s business downturn.

Good Paperwork Translates into Employer Verdict

A Los Angeles judge ruled in the company’s favor and dismissed the lawsuit. Los Angeles attorney Keith A. Fink, who represented Miod & Co., told CEA the company’s thorough paper trail helped convince the court that Rashti’s claims lacked merit. Fink said the company carefully documented: 1) its efforts to accommodate her medical condition; 2) her performance deficiencies, including customer complaints; and 3) how the loss of the key client impacted the company’s business and Rashti’s job. Fink also noted the company had saved e-mails between Rashti and a Miod & Co. partner demonstrating the company’s accommodations for her and had evidence that Rashti was the worst performer in her department.

4 Prudent Practices

Here’s what you can do to help defend against similar types of lawsuits in connection with layoffs:

 

1. Document performance issues. You’ll be in a much stronger position to explain why you selected one employee over another for layoff if you’ve conducted regular performance reviews and documented all performance and discipline issues.

    

2. Back up your reasons for layoff. Here Miod & Co. was able to demonstrate the financial impact of losing a key client—that employees had to be let go from Rashti’s department because it had less work.

    

3. Detail what you’ve done to help an employee. Always maintain careful records of how you have accommodated a disabled employee.

    

4. Maintain existing staffing level after layoffs. You’ll be hard-pressed to convince a judge or jury that the reason for your layoff is economic if you’ve spent money on replacement workers.