When an employer terminates an employee, it has to decide whether to offer the employee separation pay (severance) in return for a release of claims. (See previous Legal News: Employment Law Weekly Update, May 29, 2012). Employers are generally not legally required to provide separation pay. Some employers choose never to offer separation pay, or to do so only in very limited circumstances. For many employers, though, offering separation pay is almost the default position — they offer separation pay almost as a matter of course to terminated employees. This is no doubt driven in part by a desire to avoid the risk and expense of employment lawsuits. But, is it the right approach? After all, most terminated employees do not file lawsuits, and if an employer offers separation pay to all of them, it will be paying separation pay to a great many individuals who would never have pursued litigation.Continue reading this entry
On June 14, 2012, Senator Sherrod Brown (D-Ohio) introduced a bill in the Senate that would bolster protections to dislocated workers by amending the Workers Adjustment and Retraining Notification Act (WARN). WARN, as it currently stands, requires employers with 100 or more employees to notify their employees and the surrounding community in advance of plant closures and mass layoffs of 50 or more employees. Critics of WARN claim that it only covers 24 percent of all layoffs, and employers only comply about one-third of the time.Continue reading this entry
Can you name all four of the components needed in a separation agreement in order to release federal age discrimination claims?
As privacy becomes a front-and-center issue, more and more employees raise privacy concerns in the context of investigations into employee misconduct, and a good example of a case presenting these issues is Warinner v. North American Sec. Solutions, Inc. In Warinner, an employee was investigated as part of an undercover drug investigation at an automobile assembly plant. As a result of the investigation, the employee brought an invasion of privacy claim based on an intrusion upon seclusion theory. The court first examined whether the employee had a reasonable expectation of privacy. In this case, since the conduct at issue was a purported drug transaction with undercover investigators that did not occur at the employees’ homes, the court concluded that there was no reasonable expectation of privacy.Continue reading this entry
In Weaver v. Netflix, Inc., a federal trial court rejected an Oregon employer’s argument that it terminated an employee for performance reasons and determined a trial was necessary to weigh the employee’s claims that she was terminated for requesting leave under the FMLA and its state law counterpart, the Oregon Family Leave Act . Though the employee had performance and absenteeism issues prior to the requested leave, the court determined that the timing of the termination, less than two weeks after the leave was requested, was sufficiently suspicious that a jury needed to resolve the case.
Lawyers can effectively kill the fun of any party, especially the hallowed tradition of the office holiday party. Recognizing that there is nothing more fun than seeing colleagues and clients enjoying holiday cheer together, we say ’tis the season to remember these important tips to avoid liability and disaster:
- Injuries occurring at a holiday party may be compensable by workers’ compensation. Consider the case of the inebriated co-worker who, on her way to receive a hearty handshake and an envelope containing an annual bonus, slips and falls. Despite the good cheer, the injury is compensable. This is only one of the many scenarios that cries out for careful monitoring and regulation of alcoholic consumption. To avoid liability, consider limiting the amount of alcohol provided by giving drink tickets to employees and ensuring that alcohol is served by a bartender trained to recognize and instructed to stop serving those who have had too much to drink.
- Beware the mistletoe. Holiday parties are notorious incubators of sexual harassment claims. Remember that despite everyone affirming, “what happens at the holiday party stays at the holiday party,” harassment can and often does occur. The subordinate / superior relationship does not change just because individuals are at the holiday party. Conduct unwelcome outside the holiday party is equally unwelcome beneath the mistletoe. In short, the rules do not change just because the events occur at a holiday party.
- The holiday party does not stop at the door’s threshold. Employees whose alcoholic consumption at the holiday party contributes to an automobile accident on the way home subject themselves and the employer to potential liability.
So, Ebenezer, what’s an employer to do?
It is very common for human resources to encourage management to write honest performance reviews, and/or to utilize a performance plan, before terminating a long-term employee based on poor performance. We encourage management to utilize these tools primarily because it is the right thing to do from a values perspective – an employee should be given adequate notice of deficiencies and an opportunity to correct the deficiencies before termination becomes necessary.
It is also helpful to tell management, however, that there are good economic reasons to utilize performance reviews and performance plans. In a wrongful termination case, if a judge or jury finds there was unlawful discrimination, an employer’s liability can often reach $1 million. An employer’s chances of winning a wrongful termination case – and avoiding the $1 million liability – go up dramatically if it can show the employee was "warned" about poor performance on a performance review, or through a performance plan. Under that circumstance, a jury will be far more likely to think the employer was "fair," and therefore, that it did not wrongfully terminate the employee.
So, if you are encouraging a manager to write an honest review, or to consider a performance plan, and the manager argues that the business simply cannot afford to keep the employee on the payroll while it undertakes those actions, ask the manager which cost is higher – the cost of keeping the employee on the payroll while you go through performance counseling, or the cost of losing a lawsuit because you were not "fair" to the employee.