Always Use Accurate Decisions when Terminating an Employee

By Dean R. Dietrich

I have written off and on for years about the importance of having legitimate business reasons when making the decision to terminate an employee.  Employers often say that employees are “at-will” and therefore the company can decide to terminate their employment at anytime for any reason.  While that is an accurate definition of “employment at-will,” there is always a concern that the employer should have legitimate and nondiscriminatory reasons for terminating someone in order to provide a defense to any type of discrimination complaint.  Employers also need to be careful when documenting the legitimate business reason for the decision to terminate the employee.  A failure to be consistent in identifying and documenting the legitimate business reasons could have a very negative result.

A recent decision by the Seventh Circuit Court of Appeals (which covers the State of Wisconsin) has highlighted the need for employers to be consistent in their identification and communication of the reasons for terminating an employee.  In this case, the employer terminated an employee and a claim was made that the termination was actually done in retaliation for the employee reporting about a sexual harassment allegation against a manager.  The manager had been terminated with a lucrative severance package which seemed to suggest that the company wanted to support the terminated manager.  The company originally indicated that the employee was terminated for taking pictures of a customer of the company engaged in inappropriate conduct at a company event.  During depositions and testimony, company officials said they had not seen the pictures presented by the terminated employee and did not support a statement that the information was communicated to them by another employee.  In essence, the company witnesses denied the facts that were relied upon by the company to justify the termination of the employee.  

The Court of Appeals rejected the summary judgment ruling by the lower court and referred the matter back to the lower court for a trial.  Ultimately, the inconsistencies in the statements given by the supervisor and the human resources director suggested to the Court of Appeals that the question of the improper photographs was really a pretext for deciding to terminate the employee for other reasons (such as reporting about the harassment by the manager).  The matter was referred back to the trial court in the reversal of a summary judgment decision in favor of the employer.  

The important point to this decision is that an employer must articulate legitimate, nondiscriminatory reasons for terminating an employee and must make sure that those reasons are properly documented so there is no confusion at a later time when a complaint is filed.  Terminating an employee is an important decision and care must be taken to ensure that it is decided properly with proper documentation.