The Rights and Wrongs of Termination

When clients call Renee Inomata for advice, the No. 1 question she hears is: “I need to let somebody go. What are the risks involved?” 

Says Inomata, a former litigator who now focuses on helping employers avert mistakes as an employment defense attorney at Casner & Edwards, “A lot of what I deal with is trying to avoid a wrongful termination claim.”

Simply put, wrongful termination takes place when a worker is fired for an illegal reason—violation of a state or national labor law, retaliation against whistleblower activity, or discrimination due to gender, race, national origin, pregnancy or age—or if the company’s termination policies aren’t followed. The result can be costly if the former employee files a complaint and wins, since the employer may be ordered to pay damages for lost wages, emotional distress and attorney fees for both sides. Even “at-will” employees, who can otherwise be dismissed at any time, can’t be fired for unlawful reasons.

In Massachusetts, the requirements regarding final pay are especially stringent, attorneys point out, with serious consequences for withholding the full amount an employee is owed. 

“If you really don’t want to pay out a huge commission payment that’s coming due next week, and you fire them this week, then you may still be accused of wrong termination and then subject to having to pay not just those commissions but three times those commissions and the employee’s attorney’s fees,” Inomata says. “Make sure you don’t compound that by not paying them something that they would’ve gotten had you decided on a different timing for the termination.”

The best way to avoid a conflict, of course, is to remedy the underlying problem before it reaches a boiling point. Start by keeping up with the frequently changing laws; a good employment attorney can help. Document performance issues and address them early. Make sure your human resources personnel know the proper way to respond to employee complaints. “Train your managers on how to communicate clearly and frequently with employees about what the business expectations are and how they’re performing against those expectations,” says Inomata. 

Before you let an employee go, make sure you know the legitimate business reason to do so, says Samia Kirmani, an attorney with Jackson Lewis. “They really need to ask themselves: What’s the reason? And why am I taking this action now? What was the tipping point? Answer the questions ‘why’ and ‘why now?’”

If you haven’t observed the employee’s poor performance yourself, don’t rely on just one co-worker’s opinion. “They might’ve been motivated to be a little less candid,” Inomata says. “Make the investment needed to minimize the potential for unlawful conduct, and take time to listen to the employee and investigate objectively and thoroughly.”

If performance is the issue, study the employee’s performance reports and make sure they line up with your reasons for firing them. “If somebody were to challenge this decision, and I was telling the story, what would I have to show that I’m not making that up?” Kirmani says. 

So what do you do if a former worker still brings a wrongful termination claim? “Most of these cases end up becoming lawsuits if the employee gets really upset or angry or feels that the employer is striking back at them,” Inomata says. “It’s best to sort of take a deep breath and say, ‘Thank you for bringing this to my attention. We’ll review it and get back to you.’”

Adds Kirmani, “From my perspective, these kinds of employment-based claims rise and fall based on what the employer did when they learned there was an issue. Sometimes when mistakes happen, it’s because everybody is moving too quickly. Slow down and take the time to say, ‘Hang on a second. What’s going on here?’”

Next, seek legal counsel and contact your insurance company if you have employment practice liability coverage. Above all, play it straight. Save copies of potential evidence, don’t try to cover it up or destroy it, and instruct your managers to do the same. 

Never get defensive or downplay an employee’s allegation. “Most people, when an employee raises a criticism, their first reaction is, ‘Oh, that’s not possible,’” says Inomata. “It’s really important for managers and supervisors, when an employee comes to them and says, ‘This person did this,’ to not automatically say, ‘Oh, don’t worry about it’ or ‘You’re ridiculous.’ The reaction that the employee gets is usually what triggers or accelerates more of the hostility and the animosity that leads to a lawsuit.”