HR Management & Compliance

Employee terminations: 3 scenarios where sugar coating can backfire

When dealing with employee performance management and employee terminations, it is paramount to ensure that the documentation is accurate, fair, and consistent with verbal explanations. This seems simple enough, but it’s all too easy to get into a situation where a simple omission or a sugar-coated explanation can land an employer in court.

This is because courts permit plaintiff’s lawyers to prove discrimination circumstantially. As such, if the lawyer can provide evidence that makes it appear as though an employee was terminated (or otherwise discriminated against) for reasons other than the stated reasons, that might be enough for the employee an employee to win a case. The court leaves it open that lies or inconsistencies can be enough to infer discriminatory motives on the part of the employer.

How sugar coating termination circumstances can backfire

Here are 3 scenarios where sugar coating can backfire:

  • Scenario 1: The true reason for the employee termination is poor performance, but the reason given to employee is that they are being laid off. They may even be told “it has nothing to do with your performance.” This sugar-coating is to the employee directly. There could be many reasons for it – perhaps even convenience – but the inconsistency can backfire.
  • Scenario 2: The true reason for the employee termination is poor performance, and this is also the reason given to the employee. In fact, the poor performance is documented in the personnel file as well. However, when inquiries come up from coworkers, customers, or vendors, the manager says that the employee resigned or that it was a mutual decision. This sugar-coating may seem innocuous and even gracious for the employee, but the catch is that it is inconsistent.
  • Scenario 3: Again, poor performance is the reason for the termination, it is explained to the employee, and it is documented in the personnel file. However, in this scenario, the employer notes on California’s Employment Development Department (EDD) forms that the employee was laid off—thus allowing the employee to get unemployment benefits when they would not otherwise be due. Much like the second scenario, this may seem at first glance to be kind to the employee, but can easily become problematic for the employer.

This type of sugar coating is dangerous and can lead to bigger problems. When these types of cases come to court, the conflicting evidence makes it more difficult for the employer to prove they were not lying about the reasons for the termination—even when they have documentation.

Dan Ko Obuhanych explained in a recent CER webinar: “The US Supreme Court has basically said inconsistencies in the employer’s story about the reasons for termination – in fact, if the plaintiff can show that the employer lied about the reason for the termination – then a jury can infer from the ‘lie’ that there was an unlawful motive, even if there’s no other evidence of discrimination. So, if the plaintiff can prove that you lied about it or there was some inconsistencies regarding the reasons for termination, that, by itself, may permit an inference of an unlawful discriminatory motive—so it’s really important that we avoid this ‘lie.'”

The above information is excerpted from the webinar “Employment Documentation in California: Avoid Costly Mistakes with Defensible Drafting Strategies.” To register for a future webinar, visit CER webinars.

Dan Ko Obuhanych is an attorney in the Employment Practices Group of Fenwick & West LLP in Mountain View. He focuses on labor and employment law, litigating unfair labor practice claims, discrimination/retaliation lawsuits, grievance/arbitration matters and EEOC/DFEH charges.