Terminate an At-Will Employee - Risks?

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Question

We have a new hire who has been with the company for about a month. Unfortunately, the employee is not working out very well. They are often late to work, and their work product is sloppy and frequently incomplete. I understand that as an at-will employee, we have the right to part ways if the employee is not performing up to our standards, but we are concerned about the risk of some sort of claim. Would we be within our rights to go ahead and terminate this employee? 

Answer

As a general matter, an employer may terminate an at-will employee for any legitimate, nondiscriminatory, and non-retaliatory reason, and where supported by company policy and past practice, as applicable. This assumes there is no contractual obligation to the contrary, for example, by way of a collective bargaining agreement or employment agreement. The defensibility of any termination typically turns on the employer’s evidence to show what the underlying basis was for the decision. The more objectively clear the evidence that the reason was legitimate, the more defensible the decision tends to be. On the contrary, the less clear (or more subjective) the evidence is, the higher the risk. Ideally, the reason for termination should not be related in whole or in part to any protected characteristics (e.g. race, color, sex, gender, disability, etc.) as this may be unlawfully discriminatory, nor should the reason be related to any protected activity the employee may have engaged in, as this may be unlawfully retaliatory.

As such, if an employee is an at-will employee and something happens that warrants termination consistent with company policy and practice, as may be the case for the subject employee who has been tardy and with poor work product, the employer is generally within its discretion to proceed accordingly.

Admittedly, depending on the facts, it is a best practice for the employer to have documented any prior corrective or disciplinary actions, and ideally one that placed the employee on notice that employment may be terminated if improvement (or enough improvement) is not forthcoming concerning whatever may be going on. Here, it is unclear whether any of the tardiness or subpar work product has been addressed with the employee. That said, a lack of such documentation is not necessarily fatal to the employer's action, nor does it preclude the employer from moving forward with any legitimate business decision such as discharge. However, a lack of documentation may increase exposure to potential liability for a claim, and this is an even greater likelihood if the employer's past practices support the issuance of a final warning to other employees with similar work-related issues before a termination decision. The employer would do well to consider the following: How has the employer handled other similarly situated employees who have not met the employer's expectations? If they were previously issued a final written warning, for example, and given an opportunity to improve, then the employer may do so here to be consistent, as a best practice. If, however, there is no precedent, or company policy supports discharge without prior written final warning, or if the employee's legitimate work challenges warrant immediate discharge regardless, then the employer would generally be within its rights to proceed.

Of course, even where perfectly lawful, termination of employment can expose the employer to potential claims, depending on the facts of the situation. Such claims are potentially defensible if the employer's discharge decision is legitimate, non-discriminatory, non-retaliatory, and otherwise consistent with company policy and past practices, as noted above.

Ultimately it is up to the employer to determine whether, under company policy and practice, the subject employee should be discharged versus issued a disciplinary action that stops short of dismissal (perhaps a final warning). Regardless, when conveying any disciplinary action, including a discharge decision to an employee, it is best to be candid with the employee. If the employer provides a vague or false explanation, and the employee challenges the decision, the employer's credibility may be seriously impaired if it is unable to prove that the explanation it provided was actually the case. In this regard, for example, we do not recommend telling an employee that they are being let go because things are not working out, or words to that effect. While that is often the case, it is vague. In other words, if the employee is not meeting the employer's expectations if this is the case, and if this led the employer to decide to discipline or, perhaps, discharge them, then in this situation there is no reason not to tell the employee honestly the employer's justification. If the employee mentions that the termination is wrongful in some manner, of course, that would be the appropriate time to correct any erroneous accusations and reiterate the legitimate, non-discriminatory reasons for the employer's action to end the employment relationship.

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Published Date:November 16, 2021

Categories: HR Question of the Month