If you must fire an employee… - the importance of employment policies in employee termination cases

Folio: The Magazine for Magazine Management, May 15, 1994 by Phillip M. Perry

Don't shoot yourself in the foot in the process. Make sure you have company policies that will protect you in court.

A Penton Publishing ad salesman, long a star performer at peddling magazine space, was less than stellar at interpersonal relationships. His acid remarks disrupted the office. And he repeatedly and openly criticized his superiors.

The Cleveland-based publisher of 34 trade magazines faced a dilemma. The salesman had to go because his activities were undermining morale. However, because he had racked up such great sales during eight years at the company, there seemed to be some legal risk. In light of the employee's success at meeting the parameters of his official job description, would firing him spark charges of wrongful discharge on any one of a number of legal grounds?

Penton took the plunge. It fired the salesman, as resulting court documents show, for "continuing insubordination with his immediate supervisors and his poor, disruptive, interpersonal relationships with other Penton employees."

Lawsuits followed. The salesman, 54, claimed age discrimination under federal and Ohio state law. He also charged violation of an implied contract, claiming he had not benefited from a system of progressive discipline commonly used by his employer. The suits went through several courts, racking up expenses along the way. The resulting judgment, in Penton's favor, included comments by judges that cast considerable light on how publishers can remain clear of wild rides through Juristic Park.

"It was a great lesson for Penton," says Ronald J. James, general outside counsel for the publishing company. "There is a mythology that you cannot get rid of someone who is doing a good job." Fact is, in dicey circumstances such as this one, publishers can avoid liability for wrongful discharge if they have followed correct procedures before termination.

That's a big "if." In reviewing the quality of their procedures for dealing with problem employees, publishers should consider these aspects of the Penton case:

* The plaintiff did not have a contract with his employer.

* The employee handbook, which the plaintiff acknowledged in writing having read, said that the employer had the fight to terminate any employee with or without cause.

* The employer did not create any oral contract of employment, nor was the employee fired in a way that violated public policy. (Either would have modified the employer's ability to fire an employee "at will.")

* The employer told the plaintiff, in writing, that he would be terminated if he did not change his behavior. A series of warnings, given over the period of a year, provided evidence that progressive discipline was in effect.

* The employee did not provide sufficient evidence to support a claim of age discrimination.

Inherent in all the above is the one element that employment law attorneys say is critical to success: showing that the company treated a problem-employee fairly. Without that, a jury is apt to come down on the side of a plaintiff even if the law does not clearly support the plaintiffs charges.

"No matter what the law says, juries can decide that what you have done is unfair," warns James. "You really have to ask yourself, how will this look on a blackboard, at the end of a three-day trial, to an ad hoc personnel review committee called a jury? Take that approach and you'll start to understand how to stay out of trouble, even if you know nothing about wrongful discharge."

A perception of fairness can also provide a shield against the multiple arrows characteristic of wrongful discharge suits. Rather than rely on a single point of attack, such as age or sex discrimination, aggrieved ex-employees generally accuse employers of a variety of shortcomings, hoping one accusation prevails where another fails.

Develop a clear-cut employment policy

One way to help assure that your treatment of a discharged employee will be viewed as "fair" is to have an established employment policy to use as a measure. "The most fundamental problem is that publishers do not confront the issue of employment policy," says James. "They need to make decisions about what level of job security, if any, they are going to provide. Will everyone be an 'employee at will,' or will the company fire people only for some sort of cause? Or will everyone be subject to some form of progressive discipline?"

Failure to develop a coherent employment policy leaves an impression that the employer is being capricious with personnel, which frequently outrages jurors. James suggests that publishers look through the "card deck" used in their employment policy game in search of what he calls "Aces," or Assurances of Continued Employment. In a court case, these high-stakes cards can rack up points in the ex-employee's favor.

For example, it's easy to fall into the trap of stating that a person will be fired only "for cause," or that continued employment is assured as long as "evaluations are good." Look for such implied oral guarantees of continued employment in employment applications, letters extending job offers, questions asked during interviews, and evaluation forms.