Discrimination and Wrongful Termination

Employment discrimination and wrongful terminations are among the most common lawsuits filed against small businesses. These violations often occur due to lack of understanding of the law or process mismanagement.  Regardless of the reason, business owners must realize that intent does not necessarily matter in these cases.

An employee can file a wrongful termination claim based on discrimination due to race, religion, disability, age, pregnancy and more.  These lawsuits can also result from:

• retaliation
• breach of contract
• disparate treatment
• constructive discharge (e.g. hostile work environment)
• inconsistent application of company policies

Avoiding a wrongful termination claim against your company can be challenging, especially when faced with so many regulations. Regulatory compliance, internal consistency and good resources are your business’s best defense.

Applicable Laws

Wrongful termination and discrimination claims can be based in state law, federal law or sometimes even both (it is important to note that there is seldom consistency with state law). Further complicating the matter, wrongful termination and discrimination claims can be filed under several different federal laws or statutes.

Most wrongful termination and discrimination claims are originally brought as a charge under the Equal Employment Opportunity Act, which expressly prohibits discrimination against employees.  Notwithstanding, it is important to know that other federal laws or statutes may also apply depending on the facts and circumstances surrounding the employee’s dismissal. Some of these federal statutes include:

• Title VII of the Civil Rights Act of 1964
• Age Discrimination in Employment Act
• Occupational Health and Safety Act
• Equal Pay Act
• Americans with Disabilities Act
• Family and Medical Leave Act
• Genetic Information Nondiscrimination Act
• Fair Labor Standards Act

With so many laws and regulations, business owners should have  proper employment procedures in place to ensure compliance.

Preventative Actions   

There are preventative actions business owners may take to avoid being sued as a result of terminating an employee, but it all starts with your policies and procedures. Business owners should thoroughly review their written policies and procedures with legal counsel to determine if they: (1) follow the business’s actual practices, and (2) comply with applicable state and federal laws. If the answer is no to either, the business owner should immediately adjust either the documents or their actions to establish both consistency and compliance.

Another great recommendation is to create a checklist that includes all necessary steps to be taken during the termination process, including required documentation. If the business policies include a probationary period or opportunity for corrective actions, be sure the checklist reflects these requirements.  If a plan for corrective action is put into place, have the employee sign a statement documenting that he or she understands that their performance is lacking and that they may be terminated if these issues are not improved.

Before terminating the employee’s employment, have an impartial person, such as legal counsel or other knowledgeable individual, review the documentation to attest that you have a legitimate business reason for the decision.

Lastly, when informing the employee that their employment is being terminated, be clear and concise. Provide the employee with a short statement that he or she is being dismissed “for cause” but do not add any specifics. While this will likely be an emotional meeting, remember that staying professional is often the key to reducing the risk of a wrongful termination lawsuit.

If your business is facing a lawsuit from a former employee, or if you just need help reviewing your current policies and procedures, the Diefenbach Group is here to help.