February 9, 2012

Some of the most serious legal issues we see arise from common mistakes that employers can easily correct. Below we list five of the biggest mistakes employers make on a regular basis, each of which increases the likelihood an unhappy former employee will decide to pursue legal action.

1. Failure to Maintain an Employee Handbook

If a disgruntled employee hires a lawyer to pursue legal action against a former employer, the first question a good employment lawyer will ask is whether the employer has an employee handbook (sometimes called an employee manual), or other written policies and procedures. This same question will be asked by state and federal agencies if they are involved in evaluating the employee’s claims. For example, the Texas Workforce Commission routinely requests copies of the employment policies applicable to an employee’s termination, even when the only legal claim at issue is eligibility for unemployment benefits.

An employer should expect careful scrutiny of the language of its written employment policies. Therefore, when an employer does not have an employee handbook, or the employee handbook is not up-to-date, the employer cannot stand behind established policies or guidelines to defend its actions, especially regarding disciplinary actions related to termination. Given these realities, even small employers should implement some sort of employee handbook. A limited employee handbook would be far better than having no handbook at all.

2. Written Policies That Differ From Actual Practices

Even when an employer maintains an employee handbook, employers often admit their actual practices do not match what the handbook says. These inconsistencies provide fertile ground for ex-employees to argue that, because their termination was handled contrary to the established policies of the business, it must have been motivated by discrimination or an otherwise unlawful reason.

If the policies and practices in an employer’s handbook do not match its day-to-day actions, the potential liability to a disgruntled employee or former employee may be significantly increased. As a result, handbooks should be regularly reviewed and updated to coincide with actual business practices.

3. Performance Issues Are Allowed to Linger

Employers often tolerate negative behavior or poor performance for months or years before terminating an employee for the troublesome conduct. While employers certainly should be patient with employees to a certain extent, allowing poor performance to continue for too long will backfire. Unhappy employees may argue that poor performance could not possibly be the real reason for discipline and/or termination because the same conduct had previously gone on for months or years with no adverse action. In such cases, the employee typically argues that the employer’s reason for termination was merely an excuse or pretext for the real reason for termination – discrimination or another unlawful reason. When the same conduct that led to an employee’s termination was previously allowed to occur without penalty, an employer may have a difficult time justifying its termination decision. With these risks in mind, don’t delay discipline.

4. Failure to Be Honest With Employees Being Terminated

When employers terminate employees, they often hesitate to tell the employees the real reason for the termination. Employers sometimes try to soften the blow of termination by omitting the real reason(s) for termination or trying to make the employee feel better in the context of the termination. We have found employers often blame an employee’s termination on a pretend reason, such as the economy, a layoff, eliminating a position, etc., rather than the actual reason for the termination – the employee’s behavior.

When the employee is not told the truth, employers are vulnerable if the terminated employee decides to take legal action. The employee will certainly argue that the pretend reason is just an excuse to cover up the real discriminatory (or otherwise unlawful) reason for the termination. Unfortunately for employers, good intentions often do not get rewarded in the context of employee terminations.

5. Taking Extreme Positions on Different Issues

Extreme policies, such as zero tolerance policies, often force employers into a tight spot when a former employee takes legal action against his or her former employer. For example, if an employer has a “zero tolerance” policy regarding tardiness but permits most employees to be tardy on a regular basis, an employer will be less than credible arguing that tardiness is the actual reason for terminating an employee. In such a case, if the employee has just returned from medical leave, has engaged in protected activity, or falls in a protected category, the employer may have a tough time justifying its termination. Thus, an employer should take an extreme position on a personnel policy only when the employer will strictly and uniformly enforce the policy.

The solution to each of these routine employer mistakes is relatively straight forward, although there are various strategic and legal issues to consider when creating effective policy replacements. Attorneys at Mize, Minces & Clark regularly consult with employers regarding employment policies, and we would be happy to analyze your business practices and advise you on steps to proactively protect your interests. If it happens at work, we can help.

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