Is It Wrongful Termination If I Fire The Accused Employee?

Wrongful Termination Human beings are hard-wired to believe in fairness and justice. Psychological studies show that all but the most psychopathic of people feel a strong feeling of disgust when they witness something “unfair” or “unjust.”

That’s why this piece of advice is not very intuitive to most employers (and employees). It is not illegal to fire someone unfairly.

What does that mean? Well, it means you can fire someone for any reason (right or wrong) or no reason at all, so long as it is not an illegal discrimination. For example, you can fire someone because you think their laugh is annoying even if they are good at their job. But you can’t fire someone for Tourette’s Syndrome because you think their tick is annoying because that is a disability discrimination.

This sometimes comes up when one employee accuses another employee of bad behavior. For example, say a woman accuses a man of sexual harassment. The man denies it. At this point, the employer must make sure that the woman is safe and not being forced to endure unwanted harassment and touching.

The employer is not required to determine whether the man is innocent before deciding to fire him. The employer does not need to pretend it is NCIS before taking action to protect the female (and itself).

That means that sometimes an innocent person will get fired. Yes, it’s unfair. That does not make it illegal.

This video explains more.

 

Video Transcription:

One employee has accused another of sexual harassment. Is it wrongful termination if I fire the accused employee and the allegations later turn out to be false?

No. In fact, it’s probably safer for you to remove the alleged harasser.

It may seem unfair for you to fire someone without knowing for sure that the allegations are true.

But the employer is not required to find out the truth in an investigation.

Employers are not investigative detectives and shouldn’t try to act like one.

When employment is “at will,” you can terminate an employee for any reason without repercussion, even if allegations are later shown to be false.

But when an employee levels an accusation of sexual harassment and the employer does nothing, then you may become liable for a “hostile work environment” for not protecting the harassed employee.

Rather than expose yourself to such liability, it may be better to terminate the accused employee.

You must use good judgment in these sensitive situations and there is not always one right answer.

Ask us how we can keep you safe from lawsuits with our Employer Protection Package. For a consultation call 800-449-8992 or email us at [email protected].

Disgruntled Workforce Means Problems

If you have a morale problem with your workforce, you better do something about it… fast.

When you have a disgruntled worker, it always leads to problems.

As a business owner, here are the problems I see when a person turns bad apple:

  • They “poison the well” and create negativity amongst your other staff
  • People lose their drive and initiative, so work quality suffers
  • People start scrutinizing the employer or developing “grievances”
  • The bad person (or several) have to be replaced, costing money

In addition to the practical aspect of having to spend more money replacing employees (not a small consideration in itself), leaving employees always carry risk. People tend to treat a break in an employment relationship with the same emotions as leaving a personal relationship.matches burning

In other words, unhappy ex-employees sue. Even when you are squeaky clean, unhappy ex-employees will threaten it.

Sometimes they will sue frivolously, and you end up with a problem, regardless. There will always be a percentage of litigious ex-employees, which means that if more employees are leaving, then there will be a proportionate increase in the number of lawsuits.

Here’s another legal issue: demoralized employees take more stress-related medical leaves. This actually happens a lot and is the leading cause for medical leaves. It’s really easy to violate the leave and disability laws (thus inviting lawsuits). It’s also disruptive to your workforce. And an unhappy, stressed employee doesn’t always recover and return to employment smoothly.

Finally, whenever employees leave, employers must immediately pay all earned compensation (including vacation pay, non-discretionary bonuses and earned commissions). If you do not have a bunch of cash on hand to deal with terminating and replacing employees, you may find yourself in the middle of a wage and labor crisis.

What can an employer do to avoid employee morale problems bankrupting them?  Here are four strategies that could save you thousands of dollars.

  1. Focus on improving employee morale and retaining skilled workers. Take some time to improve relationships with those employees and foster loyalty and contentedness. This is not just a hippie-dippy people idea. Research shows that people work based on “purpose” (which includes a strong sense of community, being valued, loyalty and other social factors), not based on money. Yes, people need money. But an employer who fosters the right social conditions can get away with lower pay or other hardships without loss of morale. And definitely get rid of the bad apples because their drama is unfair to the rest of your team.
  2. Clean up your HR act by reviewing employees. Employees actually want to be reviewed if they care about their jobs (see point above regarding purpose). You can use reviews to praise (important) and address frustrations and failures that cause low morale. You should also use this as an opportunity to document issues with problem employees so that you can defend yourself later.
  3. Audit your wage and pay practices with the help of your employment lawyer.  Wage and pay class actions are the most common type of class action litigation filed in California, constituting roughly two-thirds of all new class actions being filed and hundreds of new cases each year.  You are vulnerable to these types of lawsuits if your pay practices aren’t pretty close to perfect (and there are many laws out there that are traps for the unwary employer, so do not trust an HR service or a do-it-yourself). Not only do audits give you an opportunity to find and fix liabilities before they become lawsuits, but you can use it as an opportunity to show your workforce positive change and encourage their loyalty.
  4. Encourage — or even require — your employees to take their accumulated vacation during slow times.  This is a good way to get vacation time off the books of an employee who has thousands of dollars worth stocked up, which will have to be paid in total at the time of quitting. Plus, employees who take regular vacations are less stressed and happier.

If you have any business or workforce concerns, spend 30 minutes with us on a free Business and Employment Planning Session or schedule a consultation with one of our business law attorneys or our real estate attorneys at (800) 449-8992.

What is the Status on Firing Employees for Medical Marijuana Use?

marijuanaThe Current State of Medical Marijuana Use

As of December 2014, states where medical marijuana is legal no longer have to worry about federal drug agents raiding retail operations. Hidden within a 1000+ page spending measure, Congress essentially approved lifting the federal ban on medical marijuana, stating that federal agents were banned from such raids.

The provision has been enacted law roughly one year after the Obama administration directed federal prosecutors  to stop enforcing drug laws that contradict state marijuana policies. Since this directive, federal agents have been limited to targeting medical marijuana retailers and growers who are violating other federal laws, such as money laundering or fraud.

The District of Columbia, along with 32 states have legalized the use of medical marijuana and marijuana related substances. While these laws began to pass in states as early as the 1990’s, it has long remained illegal under Federal Law until now.

While these 32 state laws vary in scope and definition, they share many common features. For example, most states require patients who want access to medical marijuana to apply and be approved for a registration or ID card.

Requirements vary in each state, however generally these cards require for a patient to seek approval from a doctor. Once a patient has received doctor approval and has received their ID card, they can purchase and even grow personal batches of medical marijuana. ID Cards are usually granted by a government agency and require annual renewal.

It does not appear that the federal government currently intends to regulate medical marijuana. It has left any such regulations and procedures up to each state for the meantime. However, the federal government’s change in stance on prosecuting medical marijuana is signifying a larger change in the tide of acceptance of medical marijuana. However, not much guidance has been given to businesses and employers on what to do with the current rise in medical marijuana usage.

Given these new developments, what should an employer know about terminating employees for medical marijuana usage?

Some states, although authorizing termination or discipline for marijuana use or intoxication, prohibit discrimination against individuals on the basis of their being medical marijuana registration cardholders. However, many state laws have created exemptions for employers to restrict any use of marijuana in the workplace or premises. In additions, these laws also usually prohibit an employee from being intoxicated on the job, whether or not the usage was within work hours or on the premises. Some jurisdictions, such as California, have case law supporting an employer’s right to terminate an employee who tests positive for marijuana.

However, it still remains unclear if an employer can terminate an employee for use of medical marijuana with a valid prescription during non-employment hours, with the potential to create a wrongful termination lawsuit. Currently, Arizona, Minnesota and Delaware have enacted laws that prevent employers from firing an employee for a positive marijuana drug test if the employee holds a valid medical marijuana card. However, other western states like California, Oregon, Montana and Washington have enacted laws stating that employers are allowed to enforce a zero-tolerance drug  policy at the workplace regardless of whether the state currently stands on medical and recreational marijuana.

Federal laws further complicate matters in this area. For example, under the Americans With Disabilities Act (ADA), illegal drug use is not generally protected for accommodation as its own illness.  But as a legally-prescribed painkiller that is legal under state but not federal law, the protection of workers using medical marijuana is not at all a given.  Many state courts over the last three years, including courts in California, have ruled that employers do not need to accommodate workers who use marijuana medically. Moreover, any employees of the federal government will fall under federal law, not their own states with regards to medical marijuana. Thus, even an employee who is a valid medical marijuana user in Arizona may still lose their job pursuant to federal law.

That being said, I think that the law is going to change as medical marijuana laws gain traction across the country.  However, employers in California, as of right now, you can feel reasonably safe terminating for medical marijuana use.  However, I suggest that you begin thinking about how you might modify your policies to account for a possible change in the law and whether you really could accommodate medical marijuana use.  If you have more pressing things to do than worry about a hypothetical future change in the law, then sign up for my newsletter, and I’ll let you know when the time comes to revisit this issue. Also please contact our employment law attorneys for a consultation at (800) 449-8992 or contact us online.

What do you need to know about Equal Pay laws?

woman ready to take notesWith the current surge of women’s rights issues in the news, equal pay laws have been receiving a lot of attention. As an employer, you should be aware of both state and federal laws governing this area.

For example, California Labor Code 1197.5 prohibits the payment of wages at rates less than the rates paid to employees of the opposite sex in the same establishment if the job requires equal skill, effort, responsibility, and similar working conditions. Different pay rates may be allowed where they arise under a merit or seniority system, a system which measures earnings by quantity or quality of production, or a differential based on any factor other than sex (or else be faced with a sex discrimination lawsuit). The Federal Equal Pay Act is nearly identical to the California Statute.

Due to these laws, lawsuits regarding an employer’s failure to enact equal pay laws have steadily been on the rise. Typically in these cases, the focus is on the work product and qualifications of the employee filing the lawsuit versus the employee/gender of employees who are receiving better pay. The greater the disparity in pay, the more justification the employer will have to prove for such a disparity.

Judgments for these cases typically include not only the recovery of any wages lost  but also liquidated damages. A party bringing such a suit may also recover attorney’s fees in a private action to enforce this section.

As a result of these laws and the recent Lilly Ledbetter Fair Pay Act which essentially resets the statute of limitations to file a discrimination lawsuit with the receipt of each new paycheck, class actions lawsuits are steadily on the rise. These can be very painful suits to defend. They are long, time consuming, comprised of multiple former employees and a lot of work. The fallout of such a lawsuit can be both devastating to you personally and to you business.

At the risk of being redundant, employers should audit their workforce!  I’m going to keep saying it until they start doing it.  It’s the best way to protect and defend against these types of suits.  Remember that these lawsuits start with the big companies and slowly work their way down to small companies, so you aren’t safe simply by virtue of the fact that you have 20 employees instead of 20,000.  Many of my clients know this by personal experience.

If you want to know whether you are at risk for an equal pay lawsuit (or any other lawsuit), sign up today for a free Business and Employment Law Planning Session, or contact our employment law attorneys at (800) 449-8992 for a consultation.

Medical Leave and Disability Laws Still a Source of Confusion

sick dogThrough our blog, we always want to keep you up to date on new laws and/or cases that will affect the way you do business.  Today’s post is on an old topic that still creates huge liability problems for employers every day. If I were to make a Greatest Hits List of the top employment law mistakes that businesses make, Medical Leave/Disability Accommodation mistakes would top my list.

Here’s a common scenario: you have a California employee on a medical leave for some type of illness or disability.  The leave can be for any condition, ranging from depression to cancer to a bank injury to pregnancy complications. Generally, the employee begins taking leave for a serious medical condition under the Family Medical Leave Act (“FMLA”) or California Family Rights Act (“CFRA”).  In this common scenario, the employee has taken and exhausted their allowable leave under these acts.  The employee is unable to return to work at the end of that leave and needs to remain on medical leave.

WHAT NOT TO DO: Do NOT summarily send the employee a letter from Human Resources, stating something to the effect of, “You have exhausted your FMLA/CFRA leave and are unable to return to work.  Therefore, we are terminating your employment.”  This is a common mistake that even large companies make.  Let’s refresh your disability laws savvy.

Why is this letter so devastating for your business?  Because the leave laws are different than the disability accommodation laws. Sometimes the disability laws require longer leaves, even if the leave laws have been satisfied. If your Human Resources personnel misses doing a disability accommodation analysis, that letter is going to be answered with a lawsuit for disability discrimination.

In my practice I have seen this occur an astounding number of times. The worst part of this scenario is that the best evidence the plaintiff employee will have against you will be the letter from your HR Department that basically admits you terminated that employee because of a medical leave of absence or because of their disability.

Writing letters such as these is like putting a bulls-eye target on your business.  You might as well just send out a flyer to Plaintiff’s lawyers that says, “Please sue me and use the smoking gun document that I just sent out to my former employee to prove your case.”  Plaintiffs’ lawyers salivate when a disabled potential client brings in such a letter from their former employer. And disability discrimination claims are the largest category of discrimination claims brought by both the EEOC and plaintiffs.

WHAT TO DO: Instead of sending such a letter, what you should and must do, if an employee is unable to return to work after exhausting their FMLA/CFRA leave, or even if they do not qualify for FMLA/CFRA leave in the first place, is to turn to an ADA analysis.  A disability is generally defined as any condition that interferes with a major life activity, which includes interfering with working and sleeping.  This definition is very broad and encompasses most health conditions.  The law was expanded in recent legislation and is constantly growing to include new conditions and facts. A disabled employee can ask their employer for an accommodation for their disability, and they are entitled to a reasonable accommodation, as long as it does not create undue hardship for your business.

If your employee requests an accommodation for their disability, such as a leave of absence, you MUST engage in the interactive process with them. This means, simply, having a dialogue with the employee (and potentially their physician) on how you may be able to accommodate their disability.  Then, it’s your duty to provide a reasonable accommodation for their disability. A leave of absence of reasonable length (which is sometimes well beyond a few months) has been held by courts to be a reasonable accommodation.

And even if your employee does not request accommodation, but simply states that they cannot work, the onus is on the employer to begin the interactive process. Once you are on notice of a potential issue, you must act to comply with the law.

This is only a snapshot of these rules, and there are other intricacies.  As you can see, this is clearly not a simple analysis to perform and having lawyers involved who are well-versed in the application of these laws is extremely helpful in your attempt to insulate yourself as much as possible from liability.

SUMMARY: The lesson to be learned here is to make sure that your HR personnel and business managers are knowledgeable that there are numerous laws that apply to disabled employees who are on medical leaves of absence.  Employees on medical leave have a great many rights, and to take steps toward terminating an employee who is on medical leave, you must jump through all the hoops under Americans with Disabilities Act (ADA) and you should document this process well.  Protect yourself by preparing yourself with evidence to defend a disability discrimination case that may be brought later.  Do this by documenting the interactive process and your attempts to accommodate the employee.  When you find yourself in this situation, involve a lawyer and go through these steps meticulously.  Disability discrimination cases, if successful, can have a lot of jury appeal and be very costly to your business.

Background checks and skill tests for new hires

bear cub and skunkI have had my fair share of bad hires over the years; let me tell you. It has cost my law firm well into the six figures in wasted payrolls, management problems, lost opportunities, correction of problems, etc.  I do not spend a lot of time dwelling on it because I do not want to waste time thinking about lost investments on people.

For most businesses, the largest investment you make is in people. The biggest line item on your expenses is payroll. And your best chance at growing and making more money is through leveraging the time and labor of others.

So who you hire matters, and you should probably ask yourself a few questions before hiring a new employee and truly figure out if a potential employee can do the job you need them to do.

I admit, I do not always check references. Although I should. Probably half a dozen of my former employees had new employers call me on a reference check. Of those, more than half had lied to their prospective employers. This put me in an awkward position, because I am not willing to lie for people. But I wonder if there are other bosses who might do it just to be nice, to avoid conflict, because they want to get that ex-employee off of their unemployment account, or because the employer is afraid that telling the truth about their employees in a reference check will get them sued.  It is awfully tempting with some employees to be nicer about them than they deserve when responding to a reference.  (Of course, employers, be careful giving a positive reference about an employee whom you know is a serious liability just to get rid of them, because that could also come back to bite you.)

So that got me thinking.  Can you really trust references?  Probably not by themselves.  So I am trying something new: background checks and skill testing.

Background checks are a good idea, and I should have been doing them all along.  You need to know whether your new hire is lying about her college degree. California has some strict rules about background checks for potential hires, however.  For example, the potential employee must be given notice of the background search (with what will be looked at, in writing) whenever a background search agency is used. Also, the potential employee must consent to such a search, and he or she must have an opportunity to get a copy of the public records the employer gathers. If the employer gathers public records itself by way of doing a cheap background search, it must allow new hires to decide whether they want a copy of the public records gathered, or whether they want to waive receiving a copy (this is usually an option found on employment applications as a small box or initial line).

Most potential employees, of course, will not have any criminal records.  A bankruptcy may not indicate anything really bad, either.  Our own government cannot keep itself out of debt; can you really blame John Smith the Office Assistant for buying too many TVs? I’ve had employees with bankruptcies, criminal histories, arrests, alcoholism and other personal problems in their past and all have turned out to be great employees.

My bad employees tend to fall into two categories: (1) drama queens/anti-social or (2) incapable of doing the job, no matter how hard they try, but also incapable of seeing that.

So I am experimenting with skill, aptitude and personality testing now. I have had several former employees straight-up lie to me about what they could do.  After they were hired, they spent a lot of wasted time trying to figure out how to do things they stated that they could do already, or trying to hide their ineptitude. This not only wastes my time and money, it aggravates me because I cannot trust the person.

So far, every employee whom I have given a skills or aptitude test to has turned out well. I do not have a lot of advice regarding testing yet, because I am new at experimenting with it. But I am hopeful.

I will say this: make sure you use reputable testing agencies or batteries, especially if you are a big employer.  You do not want to get sued for discrimination because only white males from Princeton pass your tests.  I am very hopeful, however, that testing will help me identify the Dunning-Kruger Effect sooner.

By the way, I still advocate strict adherence to probationary periods, with formal reviews after 90 days!  Some people are just not good fits and will slip through the preliminary hiring cracks, only to fail abjectly once they enter your organization.  Weed them out!  Remember, there are reasons why big businesses do some of the things that they do… and it isn’t because they are just evil, Kafkaesque machines with too much money.  Sometimes they have things in place that small businesses should adopt for their own protection and success.