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How Can Employers Avoid Legal Issues When Firing Employees?

by Gary Jiles

Q: Everywhere you turn right now, you hear bad news about the economy. As a small-business owner, I’m afraid I’ll have to resort to letting go of several hourly employees. Like other employers, I’ve dealt with Equal Employment Opportunity Commission (EEOC) charges from employees, and I have many employees who belong to protected classes or are on Family and Medical Leave Act (FMLA) leave. I know that both employers and employees are on edge right now, so I want to make sure that I handle any discharges correctly, especially given the factors I named. Could you provide some helpful tips?

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A: While firing an employee is never easy, the financial difficulties facing employees today makes the task even more daunting for human resources professionals and management. The following tips, though somewhat basic, should serve as reminders that when it comes to an employee’s termination, employers can’t be too careful.

Many employers are very concerned about firing particular types of employees — namely, those who are members of a protected class and those who have recently launched a complaint. Remember, when letting go of an employee who belongs to a protected class, has exercised a statutory right, or has complained about something, an employer’s decision must be absolutely independent of those factors.

A good question for employers to ask is whether they would be firing the employee if he hadn’t complained or wasn’t a member of a protected class. Another helpful tip is to terminate the employee the moment the employer realize his particular behavior is too problematic to allow him to continue in his job or the company simply no longer has the resources to pay him to work. Hesitation may allow other factors to enter the picture and may ultimately land the employer in court.

If a business knows it’s going to be letting go of employees in the future, there are steps it can take now to avoid workers filing retaliation claims in the event that they previously complained about something at the company, such as harassment or discrimination. The same is true if they have “blown the whistle” on a particular practice at the employer’s business. Companies should ensure that they have a specific policy in place to allow employees to make complaints and make certain that employees review the policy on a regular basis so that no one can claim he was unaware of the policy. Just as important, businesses should maintain very accurate records of employee discipline so that any disputes over their reasons for firing someone can be cleared up with the best evidence available.

Employers should investigate any ongoing complaints thoroughly. That way, if they have to let go of a complaining employee in the future, they can show that they have clean hands in the situation and are truly firing the employee because of financial difficulties. For companies that think they may have to lay off employees in the coming months, now would be a good time for them to have their employees review all of the company policies, including not only those related to the proper procedures for complaining but also any policy related to hiring and termination.

If a company believes it may have to fire an employee who is currently taking FMLA leave, it should use caution. The employer must be able to show, in the event of a dispute, that it would have terminated the employee regardless of whether he had exercised his rights under the FMLA. In the case of financial difficulties, a company should be OK. A court will understand if an employer let go of hourly employees simply because it could no longer afford to pay them. In addition, most employees are usually at will. Provided a company is treating employees fairly and it is truly discharging them because of its financial situation, the employer’s decision should be safe. Finally, if an employee on FMLA leave tells his employer unequivocally that he will not be coming back to work, it can safely fire him.

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