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High Risk Terminations

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High Risk Terminations

Prepared and Presented by: Jeffrey B. Oberman

I. INTRODUCTION.
When facing the possibility of difficult terminations, human resource “best practices” and the high risks of claims may suggest taking a less aggressive path. While human resource professionals and in-house counsel understandably may want to take safer routes, management may nevertheless decide that termination is necessary. This article and presentation will provide some guidelines, strategies, and examples to help employers address these tough situations and manage their risks in the process. The suggestions and examples in this article are not intended to be an exhaustive summary of all factual or legal termination issues that face employers, but rather to provide an approach that can be used in high risk terminations. Similarly, the citations are not meant to be exhaustive, but rather to provide examples of the points being made and access to further research.
II. KNOW WHAT THE LAW DOES NOT ALLOW.
Even if the final decision is a termination, the employer should fully evaluate its risks, and try to avoid or minimize – or accept – them. Minnesota is an “employment at-will” state, which means, generally that a Minnesota employer may discharge an employee at any time and for any reason. Pine River State Bank v. Mettille,, 333 N.W.2d 622 (Minn. 1983); see also Kvidera v. Rotation Engineering and Mfg. Co., 705 N.W.2d 416, 420 (Minn. App. 2005) (“in the absence of an express or implied agreement to the contrary, Minnesota law presumes that employment for an indefinite duration is at will”) (citing Gunderson v. Alliance of Computer Prof’ls, 628 N.W.2d 173, 181 (Minn. App. 2001). This general rule, however, is subject to numerous exceptions found in federal and state laws, local ordinances and court decisions.
A. TYPICAL CLAIMS.
1. Federal Anti-Discrimination Statutes.
a. Title VII of the Civil Rights Act of 1964 prohibits discrimination on the basis of race, color, religion, sex, and national origin. 42 U.S.C. § 2000e et seq.
b. The Age Discrimination in Employment Act (“ADEA”) protects employees age 40 and over. 29 U.S.C. § 621 et seq.
c. The National Labor Relations Act (“NLRA”) protects against discrimination on the basis of Union membership. 29 U.S.C. § 151 et seq.
d. The Rehabilitation Act of 1973, which applies to federal contractors, protects qualified individuals with a disability. 29 U.S.C. § 701 et seq.
e. The Americans With Disabilities Act (“ADA”) protects qualified individuals with a disability. 42 U.S.C. § 12101 et seq.
2. State and Local Human Rights Statutes. A myriad of state and local statutes and ordinances not only mirror protections under the federal statutes, but also go beyond federal protections. The Minnesota Human Rights Act (“MHRA”), for example, prohibits discrimination on the basis of race, color, creed, religion, national origin, sex, marital status, status with regard to public assistance, disability, sexual orientation, or age. Minn. Stat. 363A.08.
3. Reprisal, retaliation and other “whistleblower” claims. Several Federal and Minnesota statutes protect against retaliation. Basically, if a person makes a claim in good faith, then the employer cannot retaliate. See discussion in Section III, B.
4. Contractual Obligations and Promises.
a. Employment Agreements. See e.g. Ross v. Garner Printing Co., 285 F.3d 1106, 1113 (8th Cir. 2002) (employer failed to meet its burden of proof that the termination had been “for cause,” as required by the employment agreement).
b. Written or oral job offers. Written job offers not carefully drafted may inadvertently create an employment contract. See e.g. Friedman v. BRW, Inc., 40 F.3d 293 (8th Cir. 1994) (employee claimed offer of “permanent employment” changed at-will contract to one of discharge for-cause only). Moreover, oral offers may create binding contractual obligations. See e.g. Martens v. Minnesota Mining & Manufacturing, 616 N.W.2d 732 (Minn. 2000) (setting forth the elements of a promissory estoppel claim in the employment context; the elements include a promise by the employer upon which the employer intends the employee to rely, the employee did rely to his/her detriment, and the enforcement of the promise is necessary to prevent injustice); Severson v. Kevin Roche Financial Services, No. C2-00-1834, 2001 WL 741396 (Minn. App. Jul. 3, 2001) (awarding $250,000 to plaintiff based on her claim that her oral job offer created a partnership, which was subsequently breached).
c. Handbooks; policies; procedures. Employee handbooks and other policies, if not carefully drafted, may create an employment contract between employers and employees. Pine River State Bank v. Mettille, 333 N.W.2d 622 (Minn. 1983) (determining that under certain circumstances an employee handbook may create an employment contract).
5. Other Common Statutory and Common Laws Claims.
a. Compensation and Benefit laws, such as Employee Retirement Income Security Act; Wage and hour statutes and regulations, Family and Medical Leave Act, Minnesota leave laws.
b. Assault, battery.
c. Defamation, Libel, Slander and Invasion of privacy.
d. Tortious interference with contract.
e. Breach of fiduciary duty and other ownership rights.
f. Statutes intended to address workplace injuries.
B. REDUCTIONS IN FORCE.
Reductions in force can and often do lead to claims and litigation.
1. Class action potential. If the workforce reduction intentionally or unintentionally impacts protected classes, then an employer might be at risk for liability to an entire class of employees. During a RIF, be aware of:
a. Intentional discrimination.
b. A “disparate impact” on protected classes is prohibited, even if it is not intentional. A disparate impact arises from significant statistical disparities between retention rates for individuals in protected and non-protected classes.
2. Individual Claims. Employees subjected to a RIF may file claims against the employer, such as:
a. Discrimination: Intentional or Disparate Impact.
b. Contract claims, particularly due to oral promises and handbook or other policy language.
c. Public policy, whistleblower and retaliation claims.
d. Claims that the RIF was a “pretext” to cover up an illegally motivated termination.
e. ADA, FMLA, workers’ compensation issues.
III. FOCUS ON WHAT THE LAW DOES ALLOW.
When facing the possibility of difficult terminations, human resource “best practices” and the high risks of claims often – rightfully – lead to a careful and thorough analysis whether some legal theory may prohibit the termination, or at least expose the employer to likely risks. Sometimes, management may decide that it is a risk worth taking.
At that point, (presumably once all less aggressive options are explored and rejected), the employer should create layers of safety nets (factual defenses, legal defenses, and damage control), and should maintain evidence of fairness and good faith, in order to minimize litigation expenses and exposure.
One step is to change the focus of the analysis – to what the law does allow. This may provide the needed path to follow. This remainder of this section is not intended to cover all possible scenarios where termination is legally allowed, but rather to provide examples of how this type of approach might work.
IV. EXAMPLES
A.  EVEN IF THE EMPLOYEE IS A MEMBER OF A PROTECTED CLASS, IT IS LEGAL TO TERMINATE IF THERE IS A GOOD FAITH, BONA FIDE BUSINESS REASON FOR THE TERMINATION.
1. Disparate treatment discrimination may be proven by direct evidence of intentional discrimination. Feges vs. Perkins Restaurants, Inc., 483 N.W.2d 701, 710 n. 4 (Minn. 1992), rev. den. Where there is no direct evidence of intentional discrimination (which is often the case), Plaintiffs can still establish a prima facie case by meeting the three-part McDonnell Douglas standard for proving disparate treatment claims. McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973); Sigurdson v. Isanti County, 386 N.W.2d 715 (Minn. 1986). A discharged employee, to establish a prima facie case, must show that the employee: 1) is a member of a protected class; 2) was qualified for the position; 3) was discharged from the position; and 4) was replaced by a non-member of the protected class. See, e.g., Feges v. Perkins Restaurants, Inc., 483 N.W.2d 701 (Minn. 1992), rev. den. But, see, Walker v. St. Anthony’s Medical Center, 881 F.2d 554, 558 (8th Cir. 1989) (discharged female employee may establish prima facie case under Title VII even if replaced by another female employee). If there is no prima facie case, the claim should fail.
2. Even if the employee satisfies each element of the prima facie case, that only establishes the presumption of a discriminatory intent; it does not automatically make it a compensable claim. At that point, the burden of production shifts to the employer to articulate a legitimate non-discriminatory reason for its action. If it can do so, the presumption of discrimination disappears. Texas Dep’t. of Community Affairs v. Burdine, 450 U.S. 248 (1981).
3. The employee can overcome the stated legitimate reason by showing by a preponderance of the evidence that the employer’s argued legitimate business reason was in fact a pretext for intentional discrimination. Id; Ward v. Employee Development Corp., 516 N.W.2d 198, 202 (Minn. App. 1994). Moreover, the inquiry does not end there. The U.S. Supreme Court has held that even if the court does not find the employer’s explanation credible, that does not automatically entitle the employee to a judgment as a matter of law; the employee must nevertheless persuade the judge or jury that there was intentional discrimination. “[I]t is not enough [for the plaintiff to recover], to disbelieve the employer; the fact finder must believe the plaintiff’s explanation of intentional discrimination.” St. Mary’s Honor Center v. Hicks, 509 U.S. 502 (1993). Similarly, the Minnesota Supreme Court has held that, once an employer introduces evidence of a nondiscriminatory reason for its employment decision, the plaintiff still bears the “ultimate burden” of proving that the employer actually acted with discrimination. Hasnudeen v. Onan Corp., 552 N.W.2d 555 (Minn. 1996).
4. In mixed motive cases, where more than one factor motivates an employer’s action, the Civil Rights Act of 1991, 42 U.S.C. § 2000e, made it clear that liability under Title VII occurs if discrimination was a motivating factor in the employer’s decision, even if the employer was also motivated by a legitimate nondiscriminatory reason. However, if the employer would have made the same decision even if it had not considered the prohibited factor, the employee’s remedies would be reduced. The Minnesota Supreme Court continues to apply the McDonnell Douglas analysis to single motive and mixed motive cases. Anderson v. Hunter, Keith, Marshall and Co., Inc., 417 N.W.2d 619, 626 (Minn. 1988). In Minnesota, even in a mixed motive case, the employee can establish liability by demonstrating that the employer was more likely than not motivated by the unlawful reason. The fact that the employer might have made the same decision regardless is irrelevant to liability and damages determinations. Id.
5. In short, an employer can overcome a discrimination claim if it can establish:
a. The termination had nothing to do with the protected class, but instead had to do with performance, behavior or other bona fide business reasons; and
b. Other nonmembers of the protected class were subjected to the same adverse employment action under similar circumstances.

B. EVEN IF THE EMPLOYEE HAS ASSERTED A LEGAL COMPLAINT, IT IS LEGAL TO TERMINATE IF THERE IS A GOOD FAITH, BONA FIDE BUSINESS REASON FOR THE TERMINATION.
1. Several Federal and Minnesota statutes protect against retaliation. Title VII, 42 U.S.C § 2000e-3; Minnesota Human Rights Act, Minn. Stat. § 363.03, subd. 7; OSHA, 29 U.S.C § 660(c); Minnesota Workers’ Compensation Act, Minn. Stat. § 176.82; Minnesota OSHA, Minn. Stat. § 182.654, subd. 9; ERISA, 29 U.S.C. § 1140; the FMLA, 29 U.S.C. § 2615(a); Minnesota Whistleblower Act, Minn. Stat. 181.932 et seq.; many federal statutes, included the ADEA, ADA, NLRA, OSHA, and Sarbanes-Oxley; and other statutes all prohibit retaliation against anyone exercising their right to file a claim. See e.g. Cox v. Crown Coco Inc., 544 N.W.2d 490 (Minn. App. 1996) (noting that employee established causal connection between her discharge and her earlier reports to authorities about safety violations at workplace for purposes of establishing prima facie case of retaliatory discharge in violation of whistleblower statute and the Minnesota Occupational Safety and Health Act, though employer presented evidence that it had intended to terminate employee prior to her making the reports).
2. To establish a prima facie case of retaliation, the terminated employee must show that (1) he/she engaged in statutorily protected activity; (2) the employer took adverse employment action against him/her; and (3) that there is a causal connection between the two. Montandon v. Farmland Indus., Inc., 116 F.3d 355, 359 (8th Cir. 1997).
3. The mere fact that someone asserts a claim does not necessarily bar termination. There needs to be a causal connection between the discharge and the protected complaint. Freeman v. Ace Telephone Ass’n., 467 F.3d 695 (8th Cir. 2006) (termination less than a month after the protected activity was not sufficient to establish a causal connection); Hubbard v. United Press Int’l, Inc., 330 N.W.2d 428 (Minn. 1983) (termination two days after receiving a discrimination complaint established a prima facie causal connection); see also Cox. If the employee fails to establish that causal link, there is no legal violation. See Kipp v. Missouri Highway and Transp. Com’n., 280 F.3d 893 (8th Cir. 2002) (employer was entitled to summary judgment because employee failed to establish causal link between the filing of a charge and her termination; “more than a temporal connection is required to present a genuine factual issue on retaliation”); see also St. Hilaire v. Minco Products, Inc., 288 F.Supp.2d 999 (D. Minn. 2003) (employee could not establish causal link showing employer’s allegedly retaliatory motive played a part in the adverse employment action when all he could show was that the termination occurred after the charge of discrimination was filed).

C. EVEN IF YOU HAVE POOR DOCUMENTATION OR PAST DOCUMENTATION OF GOOD PERFORMANCE, NEW DOCUMENTATION, OTHER EVIDENCE MAY SUPPORT YOUR GOOD FAITH, BONA FIDE BUSINESS REASON.
1. Oral complaints or oral warnings are extremely hard to prove later. If a supervisor or manager wishes to raise concerns about an employee (regardless whether it is at evaluation time or not), there should be some documentation of the concern. A written warning to the employee, with a signed acknowledgment (and agreement of the problem, if possible) is best. If there is a verbal warning given, the supervisor/manager should do an appropriate, objective memo to the file documenting the conversation. Documents do not need to be lengthy, but they should set forth specific detail about the concern, the underlying circumstances of the problem, the reasons for the concern, and pertinent discussions which took place. Certainly, if the employee was warned that further occurrence would cause the employer to take certain disciplinary actions (including termination), that should be documented. However:
a. Although good documentation to prove your position certainly helps, it is not legally required; there are other forms of evidence.
b. Courts and jurors can determine what really happened based on witness testimony and explanations. If the testimony is compelling, it can prove what you need to prove.
c. The truth is the truth.
2. Employers often fail to be completely candid in their evaluations of their employees (the “halo effect”). Erroneously positive evaluations can create problems in the event of future disciplinary or termination proceedings. If an employee has five years worth of “excellent” or “above expectations” grades in evaluations, it is very difficult for that same employer to later claim (assuming this to be the case) that the employee has “had problems for years.” This is particularly complicated if that employee is terminated after making some form of legal claim against the company (e.g. sexual harassment, disability discrimination, whistleblower issues, etc.). However:
a. Circumstances may have changed, requiring different skills and experience.
b. Past performance does not always carry forward. See Miller v. Citizens Sec. Group, Inc., 116 F.3d 343 (8th Cir. 1997) (positive performance evaluations were not evidence that employee was meeting employer’s legitimate expectations when terminated because reviews were too far removed in time from the date of the employee’s discharge; last review was complete 15 months before termination).
c. Management may well have new expectations. See Calder v. TCI Cablevision of Missouri, Inc., 298 F.3d 723 (8th Cir. 2002) (new management brought new performance and professionalism expectations and employee failed to produce evidence that she was meeting these new expectations because positive reviews under prior management were not probative of her meeting the new expectations).
D. IT IS LEGAL TO OFFER A VOLUNTARY REDUCTION IN FORCE TO OLDER WORKERS OR OTHER PROTECTED CLASSES.
1. Consider Voluntary Reductions. Voluntary reductions are legally safer than involuntary reductions. Consider early retirement plans or other voluntary severance packages. Even if they only apply to a protected class, such as older workers, they are legal if properly implemented. See Cooney v. Union Pacific R. Co., 258 F.3d 731 (8th Cir. 2001) (voluntary severance program where benefits were awarded on the basis of location and seniority, not retirement eligibility, did not violate ADEA). See also Mason v. Lister, 652 F.2d 343 (5th Cir. 1978) (voluntary reduction in force plan did not give employer the power to forcibly retire older workers and therefore did not conflict with the ADEA).
2. Make Necessary Disclosures. Ensure that that every eligible employee receives full disclosure regarding the benefits being offered and any conditions for receiving the enhanced benefits.
3. Make Sure it is Voluntary. Take steps to assure that the plans are truly voluntary, without any direct or indirect coercion or other pressures. Set up systems to assure there is no such pressure; to assure that any such pressure is reported and dealt with; and to assure that all employees are well informed pursuant to various laws. Create all related documentation and election forms with this in mind.
4. Get a Release. Releases are typically structured so that employees are offered early retirement incentives, severance pay packages and/or some form of additional compensation in exchange for a release of claims. For a signed release to be a valid waiver of an employee’s age discrimination claims under ADEA, it must comply with the notice, consideration period and revocation right requirements of OWBPA and the Minnesota Human Rights Act, and must be signed knowingly and voluntarily by the employee. 29 C.F.R. § 1625.22; Minn. Stat. § 363A.31.
a. Assure that any releases satisfy the Older Workers’ Benefit Protection Act (“OWBPA”). 29 C.F.R. § 1625.22. Recent court decisions highlight the lack of clarity that exists in the practical application of OWBPA’s informational requirements, and the courts’ willingness to invalidate releases in RIFs. Pagliolo v. Guidant Corp., 2007 WL 1040869 (D. Minn. 2007); Thomforde v. Int’l Business Machines Corp., 406 F.3d 500 (8th Cir. 2005); Ellison v. Premier Salons Int’l, Inc., 164 F.3d 1111 (8th Cir. 1999).
b. Assure that any releases satisfy applicable state laws. In Minnesota, for a signed release to be a valid waiver of claims protected by the MHRA, it must comply with requirements under Minn. Stat. § 363A.31, including a 15-day revocation period, and various notices of rights.

E. AN INVOLUNTARY REDUCTION IN FORCE IS LEGAL AS LONG AS IT DOES NOT TARGET (OR DISPARATELY IMPACT) PROTECTED CLASSES OR INDIVIDUALS.
1. In cases involving a reduction in force, where there is not direct evidence of discrimination, a charging party makes a prima facie (see discussion in Section III, A) case for age discrimination under federal law by establishing: (1) he/she is over 40 years old; (2) he/she met the applicable job qualifications; (3) he/she suffered an adverse employment action; and (4) there is some additional evidence that age was a factor in the employer’s action. See e.g. Ward v. International Paper, 509 F.3d 457 (8th Cir. 2007); Stidham v. Minnesota Mining and Mfg., Inc., 399 F.3d 935 (8th Cir. 2005).
2. If a reduction in force is based on legitimate business needs, and does not target or disparately impact protected classes, it is legal. See Wittenburg v. American Exp. Financial Advisors, Inc., 464 F.3d 831 (8th Cir. 2006) (reduction is force was legal when on financial and business reasons and former employee could not establish pretext). See also Thomas v. First Nat. Bank of Wynne, 111 F.3d 64 (8th Cir. 1997) (former employees could not recover for age discrimination on disparate impact theory because they failed to submit statistics sufficient to raise inference that former employer’s criteria for making its reduction-in-force decisions had a disparate impact on employees within the protected class); McLaughlin v. Esselte Pendaflex Corp., 50 F.3d 507 (8th Cir. 1995) (crucial questions must focus on the effect of the reduction in force and whether statistics show that the layoffs and firings discriminated against a protected class of employees).
3. FIRST: Plan Involuntary Workforce Reductions Before You Implement.
a. Define explicit business objectives and selection criteria.
b. Identify objective evidence of business declines or other needs to justify objectives, such as reduced profits, reduced market share, reduced business, excessive costs, need to reduce production, abandoning line of business, closing facilities, combining departments or functions, restructuring, delayering, etc.
c. Determine the post-RIF structure and tie this to business objectives.
d. If the RIF is not a result of a plant closure, create a new organizational chart, and show how it will accomplish the desired needs. Focus on jobs and not people, justify all job changes, additions, eliminations, etc., and clearly tie any decision to new business objectives.
e. Assure that the new organizational structure, and all decisions relating to it, tie directly to the overall business purpose of the underlying reduction in force.
4. LAST: Select Individual Employees for Termination.
a. Be sure the method to select employees for departure is objective, and use a standard methodology.
b. Analyze jobs, not people, if at all possible.
c. Be sure the job is not needed (i.e., that you will not need to quickly rehire somebody to perform those duties).
5. BE OBJECTIVE, AND HAVE PROOF THAT YOU ARE:
a. Try to base decisions on purely objective criteria, such as length of service, or other objective data.
b. If possible, avoid making decisions based on individual performance. If you must view performance:
(1) Measure your employees’ skills against new jobs and new structures, rather than past performance.
(2) Consider creating an evaluation form used by all persons in the selection process.
(3) Have managers/supervisors objectively rank people in different categories, and explain their objective rankings based on legal and supportable reasons. Compile results, and compare how different managers do the ranking.
(4) Documentation could become a trial exhibit in any challenge to the RIF, so be sure that all documentation is designed to be comprehensible to a judge and/or jury, and that it ties to real, provable facts.
F. EVEN IF THE EMPLOYEE HAS A DISABILITY IT IS LEGAL TO TERMINATE THE EMPLOYEE IF HE/SHE IS NOT A QUALIFIED INDIVIDUAL WITH A DISABILITY.
1. The Americans With Disabilities Act (“ADA”), 42 U.S.C. § 12101 et seq., provides disability discrimination protection to employers with fifteen or more employees. The Minnesota Human Rights Act (“MHRA”), Minn. Stat. § 363A.01 et seq., covers all employers.
2. From the ADA’s enactment in1990 until January 1, 2009, there was a great deal of litigation over the definition of the word “disability.” Employers were able to defend many disability claims on the basis that the person was not “disabled.” See e.g. Sutton v. United Airlines, Inc., 527 U.S. 471 (1999); Toyota Motor Manufacturing, Kentucky, Inc. v. Williams, 534 U.S. 184 (2002). The Americans With Disabilities Act Amendment of 2008 (“ADAAA”) made it clear that, effective January 1, 2009, it will be much more difficult for employers to establish that an impairment does not constitute a disability under the ADA. See ADAAA, amending 42 U.S.C. § 12101 et seq.
3. To be protected by Title I of the ADA, a person must not only be an individual with a disability, but a qualified individual. 42 U.S.C. § 12112(a). A qualified individual with a disability is someone with a disability who: satisfies the requisite work, experience, education and other job-related requirements of the employment position such individual holds, and who, with or without reasonable accommodation can perform the essential functions of the position. 42 U.S.C. § 12111(8).
4. There are two basic steps to determine if an individual is qualified under the ADA.
a. The first step is to determine if the individual is “otherwise qualified”, i.e. meets the necessary prerequisites for the job such as: education, skills, experience, licenses, training, certificates, job related requirements such as good judgment or ability to work with people.
b. The second step is to determine if the individual can perform the essential functions of the job with or without reasonable accommodation. The second step requires a serious review of the “essential functions of the job” and a consideration whether the person with the disability can perform these functions unaided or with “reasonable accommodation.” If a person with a disability who is otherwise qualified cannot perform one or more essential job functions because of his disability, an employer, in assessing whether or not the person with the disability is qualified to do the job, must consider whether there are modifications or adjustments that would enable the person to perform these functions.
5. If the person does not have the needed skill, experience, education or other job-related requirements of the employment position, he/she is not a “qualified individual with a disability.” 42 U.S.C.A. § 12111(8). If the employee is not performing the job in compliance with the employer’s legitimate expectations, and the termination is due to performance, behavior or other bona fide business reasons, it is legal to terminate. See e.g. Breiland v. Advance Circuits, Inc., 976 F.Supp. 858 (D. Minn. 1997) (neither the ADA nor the MHRA require an employer to ignore the employee’s misconduct; where an employee violated employer’s workplace policies, employee was appropriately disciplined in accordance with his conduct); Larson v. Koch Refining Co., 920 F.Supp. 1000 (D. Minn. 1996) (purpose of ADA and MHRA is to protect an individual’s disabled status, but it is clear that a company need not tolerate misconduct).
6. Even if the person’s disability is the very cause of the inability to perform the essential functions of the job, termination is legally allowed. If the disability causes excessive absenteeism which clearly affects job performance, termination is proper. Lindgren v. Harmon Glass Co., 489 N.W.2d 804 (Minn. App. 1992) (“the fact that [plaintiff’s] absences were caused by her disability does not automatically render [defendant’s] articulated reason for her termination to be discriminatory. Problems caused by a disability may be legitimate, nondiscriminatory basis for termination.”) Id. at 809; see also Miller v. Centennial State Bank, 472 N.W.2d 349, 353-54 (Minn.App.1991) (performance problems caused by employee’s sleep apnea constituted legitimate reason for employee’s discharge); Spangler v. Federal Home Loan Bank of Des Moines, 278 F.3d 847 (8th Cir 2002) (a “qualified individual with a disability” is “an individual who can perform the essential functions of their job” either with or without reasonable accommodation; where employee’s disability made her unable to come to work on a regular and reliable basis, she was unable to perform essential functions of her job); Lang v. City of Maplewood, 574 N.W.2d 451 (Minn. App. 1998) (police officer that conceded he was totally disabled from performing his job duties due to his mental condition was not a qualified individual with a disability).
G. EVEN IF THE EMPLOYEE IS A QUALIFIED INDIVIDUAL WITH A DISABILITY, IT IS LEGAL TO TERMINATE THE EMPLOYEE IF THE EMPLOYER CANNOT PROVIDE REASONABLE ACCOMMODATIONS OR IF THERE IS A “DIRECT THREAT” TO THE PROPERTY OR SAFETY OF OTHERS.
1. Although disability cases are decided on a case-by-case basis, the fact remains that if the employer can prove that it could not provide reasonable accommodation to enable the person to do the job, then it is legally permissible to terminate. See Lang, supra (where no reasonable accommodation would have permitted employee to perform his job, termination was appropriate).
2. If the person’s disability is such that it creates a “direct threat” to the health, safety, or property of others, and that risk cannot be eliminated by reasonable accommodations, then termination is legally allowed. See Minn. Stat. 363A.03 subd. 36(2) (“disability excludes any condition resulting from alcohol or drug abuse which…constitutes a direct threat to property or safety of others”); 42 U.S.C. § 12111(3) (“direct threat” means significant risk to the health or safety of others that cannot be eliminated by reasonable accommodation); 29 CFR §1630.2(r) (defining “direct threat” as a significant risk of substantial harm and requiring consideration of factors such as the duration of the risk, the nature and severity of the potential harm, and the imminence of the potential harm).
H. IT MAY BE LEGAL TO TERMINATE SOMEONE WHO IS ON FMLA LEAVE.
1. The Family and Medical Leave Act of 1993 (“FMLA”), 29 U.S.C.A. § 2601 et seq., generally assures that eligible employees must be reinstated to the positions that they held before taking the leave or to a position with equivalent benefits, pay and other terms and conditions of employment. Id; Cooper vs. Olin Corp., 246 F.3d 1083 (8th Cir. 2001).
2. However, it may be legal for an employer to refuse to reinstate, or terminate, an employee for economic reasons unrelated to the taking of the FMLA leave. See O’Connor v. PCA Family Health Plan, Inc, 200 F.3d 1349 (11th Cir. 2000) (female employee who was terminated pursuant to a reduction in force while on pregnancy leave under FMLA did not have cause of action, where employer proved that she would have been laid off during FMLA period in any event because of economic losses).
3. An employee may even be discharged for performance while on FMLA leave under certain circumstances. See Throneberry v. McGehee Desha County Hosp., 403 F.3d 972, 977 (8th Cir. 2005) (finding sufficient evidence that the employer discharged the employee during her FMLA leave for poor work performance and disruptive conduct, not for exercising her FMLA rights, the court held that “an employer who interferes with an employee’s FMLA rights will not be liable if the employer can prove it would have made the same decision had the employee not exercised the employee’s FMLA rights.”).
4. Nothing in the FMLA prevents an employer from terminating an employee for job-related misconduct. See, e.g., McConnell v. Swifty Transport, 198 Fed. Appx. 438 (6th Cir. 2006) (employee was properly terminated when he told the disability provider that he would like to “personally come pay him a visit”); Newton v. SunTrust Bank, 2006 WL-1643346 (M.D. Fla. 2006) (employee was properly terminated after employer discovered she falsified medical certification). This is true even if the misconduct is related to the underlying medical condition. Anders v. Waste Management of Wisconsin, 463 F.3d 670 (7th Cir. 2006) (an employee who became violent on the job was properly terminated even though he claimed his behavior resulted from his medical condition; See also Pence v. Tenneco, 169 Fed. Appx. 808 (4th Cir. 2006); McBride v. Citigo Petroleum Corp., 281 F.3d 1099, 110 (10th Cir. 2002) (“the FMLA does not protect an employee from performance problems caused by the condition for which FMLA leave was taken, nor does it require that an employee be given an opportunity to show improved job performance when not ill”).
5. It is even possible to terminate employees on FMLA leave because of the employee’s FMLA application. See, e.g. Crouch v. Whirlpool Corp., 447 F.3d 984 (7th Cir. 2006) (holding that the employer’s honest suspicion of the employee’s misuse of FMLA leave justified his termination, after a private investigator found the employee performing activities inconsistent with his disability leave and employee admitted to vacationing in Las Vegas during the leave).
I. IT MAY BE LEGAL TO TERMINATE SOMEONE BECAUSE YOU WRONGLY, BUT IN GOOD FAITH, THOUGHT YOU HAD A BONA FIDE REASON.
1. Even if the employer was mistaken in finding that the employee committed misconduct, termination may be legal as long as its belief was the basis for the termination; the pertinent question is whether employer honestly believed the employee committed the misconduct. See De Anda v. St. Joseph Hospital, 671 F.2d 850, 854 n. 6 (5th Cir. 1982) (cited in Norcross v. Sneed, 755 F.2d 113, 119 (8th Cir. 1985)) (whether employer’s belief that employee engaged in wrongdoing is wrong does not matter so long as its belief was the basis for the termination); Plagmann v. Square D. Co., 2002 WL 32832031 at *3 (Dist. Iowa 2002) (citing Scroggins v. University of Minnesota, 221 F.3d 1042, 1045 (8th Cir. 2000)).
2. The point remains that the termination was not related to the person’s protected status.
J. IT MAY EVEN BE LEGAL TO TERMINATE SOMEONE BECAUSE HE/SHE BROUGHT SEVERAL LEGAL COMPLAINTS
1. To establish a prima facie case of retaliation, the terminated employee must show that (1) he/she engaged in statutorily protected activity; (2) the employer took adverse employment action against him/her; and (3) that there is a causal connection between the two. Montandon v. Farmland Indus., Inc., 116 F.3d 355, 359 (8th Cir. 1997).
2. Legal protection for employees who make complaints is not absolute. “[T]o qualify for the protection of the statute, the manner in which an employee expresses her opposition to an allegedly discriminatory employment practice must be reasonable.” Rollins v. State of Florida Dept. of Law Enf., 868 F.2d 397, 400-01 (11th Cir. 1999).
3. Conduct that is “disruptive, excessive, or ‘generally inimical to [the] employer’s interests’” is beyond the protection of anti-discrimination statutes. See Kempcke v. Monsanto Co., 132 F.3d 442, 445 (8th Cir. 1998) (regarding ADEA).
4. In determining whether an employee’s conduct is reasonable (and therefore protected) courts have used a balancing test wherein they “balance the setting in which the activity arises and the interests and motivations of both the employer and employee.” Hochstadt v. Worchester Found. for Experimental Biology, 545 F.2d 222, 232 (1st Cir. 1976); see also Rollins, 868 F.2d at 401 (“balancing the purpose of the statute and the need to protect individuals asserting their rights thereunder against an employer’s legitimate demands for loyalty, cooperation and a generally productive work environment”). Essentially the question that must be answered is did the employee go “too far.” Rollins, 868 F.2d at 401; Hochstadt, 545 F.2d at 231, 234. Where the employee acted unreasonably, the employee’s conduct may be deemed an independent, legitimate basis for the employer’s action. Rollins, 868 F.2d at 401; see also Hochstadt, 545 F.2d at 234; Ammons v. Zia Co., 448 F.2d 117, 120-21 (10th Cir. 1971) (affirming lower court’s finding that employee who complained 32 times about low pay based on her sex and violated rules was fired “because of a series of incidents, not related to her sex,” even though employer admitted that her constant complaints had some bearing on its decision to terminate her).
V. THE TERMINATION DECISION.
Before making the decision to terminate, assure that, in addition to considering legal risks and options, the employer has done all that can be done to assure that it does not make matters more difficult. A few basic questions should be asked:
A. HAVE YOU COMMUNICATED CLEARLY AND DOCUMENTED YOUR RULES AND EXPECTATIONS?

1. Employers who follow their rules and policies and clearly communicate their expectations to employees can prevent or minimize liability. See e.g. Stiefel v. Allied Domeco Spirits & Wine USA, Inc., 184 F.Supp.2d 886 (W.D. Ark. 2002) (employer not liable under the Family and Medical Leave Act for terminating employee after miscarriage because decision to terminate employee for absenteeism was supported by employee handbook); Foster v. Arthur Andersen, LLP, 168 F.3d 1029, 1034 (7th Cir. 1999) (employee failed to establish Americans with Disabilities Act claim although terminated one month after she told her supervisor of her tendinitis because employee was warned that a single misstep would result in her termination and she was terminated when she came to work tardy).

B. DID YOU FAIRLY INVESTIGATE THE FACTS?
1. Before making a final decision regarding discipline or discharge, management should be certain that an employee has, in fact, violated a work rule or otherwise failed to perform. Failure to do so can lead to a wrongful termination, defamation and/or pretext claim. Accusations or suspicions should be thoroughly and fairly investigated. The employee should be given an opportunity to fully tell his or her side of the story.
C. HAVE YOU BEEN OBJECTIVE AND CONSISTENT?
1. Employers who treat protected classes and non-protected classes the same in same or comparable situations can prevent or minimize liability. Treating employees unfairly relative to others may lead to claims of discrimination and/or pretext under Title VII, ADA, ADEA, EPA, MHRA or other statutes that protect certain groups of people from unfair treatment in the workplace based on their protected class status. See discussion in Section IV, A; see e.g. Simmon v. New Public School District No. Eight, 251 F.3d 1210 (8th Cir. 2001) (holding, in part, that the salaries of male employees are relevant to a female employee’s claim of unequal pay); Graham v. Long Island R.R., 230 F.3d 34 (2nd Cir. 2000) (violation of Title VII when employer terminated African-American employee for alcohol violation after receiving one waiver, but granting Caucasian employee two additional waivers); Blount v. Alabama Co-op. Extension Service, 869 F.Supp. 1543 (M.D. Ala. 1994) (employee could state prima facie case of wage discrimination under Title VII based on her race or sex because three Caucasian males and one Caucasian female who held same position but were paid more).

D. CAN YOU LIVE WITH A POSSIBLE CLAIM OR LAWSUIT?
1. Face the possibility that a claim or legal action may happen, and ask yourself if that still is better than your alternatives.
2. Make sure that all needed decision makers are in agreement.
3. Know in advance your initial litigation position.
VI. THE TERMINATION PROCESS.
A. DON’T MAKE MATTERS WORSE BY MAKING THINGS UP; BE HONEST.
1. Lying about the reason for termination will make matters worse.
2. A mediocre story told well is better than a great story told poorly.
3. A truthful defense is less expensive to litigate, and easier to prove.
4. Avoid:
a. Pretext claims. Even if an employer can offer a legitimate non-discriminatory reason for an employment action, employees can prove that the alleged reason was just pretextual by pointing to other employer actions that show discrimination or inconsistency. See e.g. White v. McDonnell Douglas Corp., 985 F. 2d 434 (8th Cir. 1993) (if employer articulates reasons sufficient to rebut prima facie case of race or sex discrimination, inquiry proceeds to new level of specificity; employee is entitled the opportunity to show that stated reason for employer’s action was in fact pretext); Potter v. Ernst & Young, LLP, 622 N.W.2d 141, 146 (Minn. App. 2001) (holding employment discrimination plaintiff can prove pretext either by presenting direct evidence that discriminatory reason motivated employer’s decision or by presenting evidence that employer’s proffered reason is unworthy of credence, thus raising inference that real reason is discriminatory).
b. Defamation claims. Terminated employees are bringing an increasing number of “defamation” lawsuits against their former employers. Consequently, employers should make sure that the documentation regarding all employees focuses on objective, provable facts. Broad, subjective statements such as an employee is “incompetent” “lazy” or has committed “misconduct” should be avoided. Instead, specific performance problems and/or rule violations should be itemized (e.g. produces 40 widgets when 50 are the expected goal, late for work three times in one week, filled in extra hours (unworked) on time card, etc.). To further prevent liability for defamation, employers must make careful investigations of the facts before terminating or disciplining an employee. For example, if an employee is terminated for theft (and implicitly called a “thief”), the employer may be liable for defamation where there was, in fact, no proof to implicate the employee and/or the employer conducted a sloppy or minimal investigation.
c. “Whitewash” accusations; looking like a liar.
d. Fact disputes; pro-employee juries.
B. MAINTAIN CONFIDENTIALITY
1. Employers must hold information in the strictest confidence. Written documentation should be tied to the objective facts and be seen only by those who need to be involved. Likewise, conversations of employment matters should be limited to those involved and not discussed with other employees, or especially with persons outside the company.
2. In addition to defamation and other employment issues, there is some risk of an action for invasion of privacy. The Minnesota Supreme Court has recognized a cause of action for invasion of privacy. Lake v. Wal-Mart Stores, Inc., 582 N.W.2d 231 (Minn. 1998) (recognizing cause of action for (1) intrusion upon seclusion, (2) appropriation, and (3) publication of private facts but declining to recognize an action for false light publicity). See also C.L.D. v. Wal-Mart Stores, Inc.,79 F.Supp.2d 1080, 1082 (D. Minn. 1999) (relating to disclosure of private health information to three other managers); Bodah v. Lakeville Motor Express, Inc., 649 N.W.2d 859 (Minn. App. 2002) (relating to dissemination of social security numbers to 16 managers of affiliate).
C. TIMING THE TERMINATION
1. Don’t terminate prematurely. Before an employee’s employment is terminated, the employer should take steps to assure that the employee’s rights have not been violated, and that termination is likely to withstand a legal challenge. Make sure that the termination was based on good faith, lawful reasons; that the employee has not been discriminated against, or had other legal rights violated; that the grounds for the termination are supported; and that the records properly reflect what the employer understands to be the situation.
2. Having said that, employers should also realize that sometimes termination decisions are made too late. Some employees create exhaustive and frustrating problems for employers. This can be costly, counterproductive and create morale problems. Also, in certain circumstances, that employee’s presence can give him or her (if acting in bad faith) an opportunity to develop, create, and even make up claims which might not otherwise exist. Beware of the following potential situation: an employee who is in constant trouble, and probably should have been asked to leave the company months ago, is clearly about to lose his or her job; suddenly, often after being summoned to the final termination meeting, that employee reports a work injury, a sexual harassment claim, a disability discrimination claim, a whistleblower claim, or any of the other varieties of claims which employees can make; at that point, the employer who goes forward with the termination will undoubtedly be accused of wrongful retaliation. In short, there are circumstances where the employer would have been better off making the termination decision earlier and acting on it. Procrastination can be very expensive.
3. Once a decision is made to terminate an employee, employers must decide how quickly to do it, whether to give the employee several weeks notice, whether to ask the employee to leave the premises on the spot, etc. These decisions have to be made on a case-by-case basis.
D. TELLING THE EMPLOYEE.
1. Ordinarily, a face-to-face meeting between the employee and at least two representatives of the employer, is the best way to inform an employee of the termination. The meeting should (generally) be brief, but the representatives of the employer should be honest, clear and direct. The employer’s representatives should concisely state the reasons for termination, but not enter into an argument regarding those reasons. The reasons for termination should be documented, signed and dated, and placed in the employee’s personnel file.
2. It is a good practice for employers to give the employee some (but not in great detail) idea what he or she can expect. For example:
a. Make it clear what you expect and do not expect in terms of performance. If you are asking the employee to leave immediately, make it clear that he or she should not be performing any more services on behalf of the company, making any agreements on behalf of the company, contacting customers of the company, etc.
b. Discuss what company property you expect to have returned, and arrange for a time and place (appropriately supervised if needed) to get it and for the employee to pick up his or her personal belongings.
c. Explain to the employee what he or she can expect in terms of post-termination information and compensation (final pay checks, unpaid accrued vacation, COBRA letter, possibly discuss – but definitely do not guarantee – the employee’s rights to apply for unemployment, etc.)
d. Provide a simple letter, confirming the termination, the employer’s expectations about responsibilities and when the employee can expect to receive final wages, COBRA letter, etc.

E. TRUTHFUL REASONS LETTER
1. Minnesota law allows employees who have been involuntarily terminated to request, in writing, that the employer provide a written statement of the “truthful reasons” for termination. Any statement furnished by the Employer under this provision of the law cannot be made the subject of any action for libel, slander, or defamation by the employee against the employer. Minn. Stat. § 181.933 (an employee may, within 15 working days of termination, request in writing that the employer inform the employee of the reason for the termination; the employer must respond in writing within 10 working days).
2. If employers are asked to write this letter, and/or asked to provide terminated employees with copies of their personnel records (Minn. Stat. § 181.961 (employers are required to provide the employee with an opportunity to review the employee’s personnel record upon written request by the employee)), that may be a sign that the employee is contemplating litigation, and has spoken to an attorney. Regardless, this letter may become critical evidence as part of a future unemployment claim dispute, workers’ compensation dispute, or any other type of wrongful termination/defamation claim.
3. The letter, if well done, may dissuade a plaintiff’s lawyer from pursuing the case and/or become evidence in some future proceeding. It is important for employers to take the time to do a good, thorough job on this letter. Be sure to fairly and objectively state all of the reasons for the termination. If you fail to do so here, you may have a hard time explaining other issues later. And be sure that you can back it up with evidence.
4. Depending on your level of documentation and confidence that employees will be around long term, you may want to have counsel interview people, and perhaps even obtain written statements to lock in the facts.

F. UNEMPLOYMENT INSURANCE
1. Unemployment Insurance. Minn. Stat. 268.029 et seq. Employers often underestimate the importance of unemployment claims by terminated employees. Although a good legal argument can be made that filings and decisions in unemployment hearings are not “admissible” as evidence in subsequent wrongful termination lawsuits (See Minn. Stat. 268.105, Minn. State. 268.19), the documents can form the basis for later inquiries, investigations, examinations, etc. Care should be taken to file detailed and complete information with the Department of Jobs and Training, as part of the unemployment claim process. If an employer previously was asked to write a letter stating the “truthful reasons” for termination as discussed above, employers may want to submit that letter to the unemployment division. Regardless, it is essential for employers to verify the facts before responding to the initial unemployment claim and any subsequent hearings.

G. POST–TERMINATION NEGOTIATIONS
1. Severance/Settlement/Release Issues. Employers need to consider when, if ever, they should offer employees some sort of post-termination compensation (severance or settlement), and whether they should seek an appropriate Release of Claims from the employee. These decisions can only be made on a case-by-case basis, depending on all of the facts and circumstances.
2. Employers should consider when, if ever, they wish to enter into negotiations with employees, who should do the negotiations, and what the tone of the negotiations should be. This period of time creates opportunities to avoid lawsuits which might otherwise occur. Unfortunately, it also creates potential risks of creating lawsuits which would not otherwise occur.
3. Beware of setting precedents. While it is often easier and cheaper to offer some amount of money for a release, in order to avoid potential litigation, beware of the impact that may have on future employment decisions. If, for example, an employer pays an employee three months of severance pay in exchange for a release simply because that employee is a member of a protected class, other future similarly situated individuals may expect the same or more; it may prompt others to threaten or bring legal actions which otherwise would not have considered. On the other hand, obviously, an appropriate release for a reasonable price – in the right case – could prevent a great deal of litigation expenses, exposure and publicity! Employers should consider these issues in each situation.

VII. CONCLUSION
Even if an employer successfully defends a lawsuit, the financial cost, damage to morale and lost productivity cannot be recovered. Employers should always strive to avoid problems in the first place if possible. When the decision is made to terminate, despite whatever risks are ahead, employers should take as many actions as possible to create layers of safety nets (factual defenses, legal defenses, and damage control), and should maintain evidence of fairness and good faith, in order to minimize litigation expenses and exposure.

 

I.introduction.

When facing the possibility of difficult terminations, human resource “best practices” and the high risks of claims may suggest taking a less aggressive path. While human resource professionals and in-house counsel understandably may want to take safer routes, management may nevertheless decide that termination is necessary. This article and presentation will provide some guidelines, strategies, and examples to help employers address these tough situations and manage their risks in the process. The suggestions and examples in this article are not intended to be an exhaustive summary of all factual or legal termination issues that face employers, but rather to provide an approach that can be used in high risk terminations.Similarly, the citations are not meant to be exhaustive, but rather to provide examples of the points being made and access to further research.

II.KNOW what the law does not allow.

Even if the final decision is a termination, the employer should fully evaluate its risks, and try to avoid or minimize – or accept – them.Minnesota is an “employment at-will” state, which means, generally that a Minnesota employer may discharge an employee at any time and for any reason. Pine River State Bank v. Mettille,, 333 N.W.2d 622 (Minn. 1983); see also Kvidera v. Rotation Engineering and Mfg. Co., 705 N.W.2d 416, 420 (Minn. App. 2005) (“in the absence of an express or implied agreement to the contrary, Minnesota law presumes that employment for an indefinite duration is at will”) (citing Gunderson v. Alliance of Computer Prof’ls, 628 N.W.2d 173, 181 (Minn. App. 2001). This general rule, however, is subject to numerous exceptions found in federal and state laws, local ordinances and court decisions.

A.TYPICAL CLAIMS.

1.Federal Anti-Discrimination Statutes.

a.Title VII of the Civil Rights Act of 1964 prohibits discrimination on the basis of race, color, religion, sex, and national origin.42 U.S.C. § 2000e et seq.

b.The Age Discrimination in Employment Act (“ADEA”) protects employees age 40 and over.29 U.S.C. § 621 et seq.

c.The National Labor Relations Act (“NLRA”) protects against discrimination on the basis of Union membership.29 U.S.C. § 151 et seq.

d.The Rehabilitation Act of 1973, which applies to federal contractors, protects qualified individuals with a disability.29 U.S.C. § 701 et seq.

e.The Americans With Disabilities Act (“ADA”) protects qualified individuals with a disability.42 U.S.C. § 12101 et seq.

2.State and Local Human Rights Statutes.A myriad of state and local statutes and ordinances not only mirror protections under the federal statutes, but also go beyond federal protections.The Minnesota Human Rights Act (“MHRA”), for example, prohibits discrimination on the basis of race, color, creed, religion, national origin, sex, marital status, status with regard to public assistance, disability, sexual orientation, or age.Minn. Stat. 363A.08.

3.Reprisal, retaliation and other “whistleblower” claims. Several Federal and Minnesota statutes protect against retaliation.Basically, if a person makes a claim in good faith, then the employer cannot retaliate.See discussion in Section III, B.

4.Contractual Obligations and Promises.

a.Employment Agreements.See e.g. Ross v. Garner Printing Co., 285 F.3d 1106, 1113 (8th Cir. 2002) (employer failed to meet its burden of proof that the termination had been “for cause,” as required by the employment agreement).

b.Written or oral job offers. Written job offers not carefully drafted may inadvertently create an employment contract. See e.g. Friedman v. BRW, Inc., 40 F.3d 293 (8th Cir. 1994) (employee claimed offer of “permanent employment” changed at-will contract to one of discharge for-cause only).Moreover, oral offers may create binding contractual obligations.See e.g. Martens v. Minnesota Mining & Manufacturing, 616 N.W.2d 732 (Minn. 2000) (setting forth the elements of a promissory estoppel claim in the employment context; the elements include a promise by the employer upon which the employer intends the employee to rely, the employee did rely to his/her detriment, and the enforcement of the promise is necessary to prevent injustice); Severson v. Kevin Roche Financial Services, No. C2-00-1834, 2001 WL 741396 (Minn. App. Jul. 3, 2001) (awarding $250,000 to plaintiff based on her claim that her oral job offer created a partnership, which was subsequently breached).

c.Handbooks; policies; procedures. Employee handbooks and other policies, if not carefully drafted, may create an employment contract between employers and employees.Pine River State Bank v. Mettille, 333 N.W.2d 622 (Minn. 1983) (determining that under certain circumstances an employee handbook may create an employment contract).

5.Other Common Statutory and Common Laws Claims.

a.Compensation and Benefit laws, such as Employee Retirement Income Security Act; Wage and hour statutes and regulations, Family and Medical Leave Act, Minnesota leave laws.

b.Assault, battery.

c.Defamation, Libel, Slander and Invasion of privacy.

d.Tortious interference with contract.

e.Breach of fiduciary duty and other ownership rights.

f.Statutes intended to address workplace injuries.

B.Reductions in Force.

Reductions in force can and often do lead to claims and litigation.

1.Class action potential.If the workforce reduction intentionally or unintentionally impacts protected classes, then an employer might be at risk for liability to an entire class of employees.During a RIF, be aware of:

a.Intentional discrimination.

b.A “disparate impact” on protected classes is prohibited, even if it is not intentional.A disparate impact arises from significant statistical disparities between retention rates for individuals in protected and non-protected classes.

2.Individual Claims.Employees subjected to a RIF may file claims against the employer, such as:

a.Discrimination:Intentional or Disparate Impact.

b.Contract claims, particularly due to oral promises and handbook or other policy language.

c.Public policy, whistleblower and retaliation claims.

d.Claims that the RIF was a “pretext” to cover up an illegally motivated termination.

e.ADA, FMLA, workers’ compensation issues.

III.FOCUS ON WHAT THE LAW DOES ALLOW.

When facing the possibility of difficult terminations, human resource “best practices” and the high risks of claims often – rightfully – lead to a careful and thorough analysis whether some legal theory may prohibit the termination, or at least expose the employer to likely risks. Sometimes, management may decide that it is a risk worth taking.

At that point, (presumably once all less aggressive options are explored and rejected), the employer should create layers of safety nets (factual defenses, legal defenses, and damage control), and should maintain evidence of fairness and good faith, in order to minimize litigation expenses and exposure.

One step is to change the focus of the analysis – to what the law does allow.This may provide the needed path to follow. This remainder of this section is not intended to cover all possible scenarios where termination is legally allowed, but rather to provide examples of how this type of approach might work.

IV.EXAMPLES

A.­­­­­­­­­­­EVEN IF THE EMPLOYEE IS A MEMBER OF A PROTECTED CLASS, IT IS LEGAL TO TERMINATE IF THERE IS A GOOD FAITH, BONA FIDE BUSINESS REASON FOR THE TERMINATION.

1.Disparate treatment discrimination may be proven by direct evidence of intentional discrimination.Feges vs. Perkins Restaurants, Inc., 483 N.W.2d 701, 710 n. 4 (Minn. 1992), rev. den.Where there is no direct evidence of intentional discrimination (which is often the case), Plaintiffs can still establish a prima facie case by meeting the three-part McDonnell Douglas standard for proving disparate treatment claims.McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973); Sigurdson v. Isanti County, 386 N.W.2d 715 (Minn. 1986).A discharged employee, to establish a prima facie case, must show that the employee:1) is a member of a protected class; 2) was qualified for the position; 3) was discharged from the position; and 4) was replaced by a non-member of the protected class.See, e.g., Feges v. Perkins Restaurants, Inc., 483 N.W.2d 701 (Minn. 1992), rev. den.But, see, Walker v. St. Anthony’s Medical Center, 881 F.2d 554, 558 (8th Cir. 1989) (discharged female employee may establish prima facie case under Title VII even if replaced by another female employee).If there is no prima facie case, the claim should fail.

2.Even if the employee satisfies each element of the prima facie case, that only establishes the presumption of a discriminatory intent; it does not automatically make it a compensable claim.At that point, the burden of production shifts to the employer to articulate a legitimate non-discriminatory reason for its action.If it can do so, the presumption of discrimination disappears.Texas Dep’t. of Community Affairs v. Burdine, 450 U.S. 248 (1981).

3.The employee can overcome the stated legitimate reason by showing by a preponderance of the evidence that the employer’s argued legitimate business reason was in fact a pretext for intentional discrimination.Id; Ward v. Employee Development Corp., 516 N.W.2d 198, 202 (Minn. App. 1994).Moreover, the inquiry does not end there.The U.S. Supreme Court has held that even if the court does not find the employer’s explanation credible, that does not automatically entitle the employee to a judgment as a matter of law; the employee must nevertheless persuade the judge or jury that there was intentional discrimination.“[I]t is not enough [for the plaintiff to recover], to disbelieve the employer; the fact finder must believe the plaintiff’s explanation of intentional discrimination.”St. Mary’s Honor Center v. Hicks, 509 U.S. 502 (1993).Similarly, the Minnesota Supreme Court has held that, once an employer introduces evidence of a nondiscriminatory reason for its employment decision, the plaintiff still bears the “ultimate burden” of proving that the employer actually acted with discrimination.Hasnudeen v. Onan Corp., 552 N.W.2d 555 (Minn. 1996).

4.In mixed motive cases, where more than one factor motivates an employer’s action, the Civil Rights Act of 1991, 42 U.S.C. § 2000e, made it clear that liability under Title VII occurs if discrimination was a motivating factor in the employer’s decision, even if the employer was also motivated by a legitimate nondiscriminatory reason.However, if the employer would have made the same decision even if it had not considered the prohibited factor, the employee’s remedies would be reduced.The Minnesota Supreme Court continues to apply the McDonnell Douglas analysis to single motive and mixed motive cases.Anderson v. Hunter, Keith, Marshall and Co., Inc., 417 N.W.2d 619, 626 (Minn. 1988).In Minnesota, even in a mixed motive case, the employee can establish liability by demonstrating that the employer was more likely than not motivated by the unlawful reason.The fact that the employer might have made the same decision regardless is irrelevant to liability and damages determinations.Id.

5.In short, an employer can overcome a discrimination claim if it can establish:

a.The termination had nothing to do with the protected class, but instead had to do with performance, behavior or other bona fide business reasons; and

b.Other nonmembers of the protected class were subjected to the same adverse employment action under similar circumstances.

B.EVEN IF THE EMPLOYEE HAS ASSERTED A LEGAL COMPLAINT, IT IS LEGAL TO TERMINATE IF THERE IS A GOOD FAITH, BONA FIDE BUSINESS REASON FOR THE TERMINATION.

1.Several Federal and Minnesota statutes protect against retaliation.Title VII, 42 U.S.C § 2000e-3; Minnesota Human Rights Act, Minn. Stat. § 363.03, subd. 7; OSHA, 29 U.S.C § 660(c); Minnesota Workers’ Compensation Act, Minn. Stat. § 176.82; Minnesota OSHA, Minn. Stat. § 182.654, subd. 9; ERISA, 29 U.S.C. § 1140; the FMLA, 29 U.S.C. § 2615(a); Minnesota Whistleblower Act, Minn. Stat. 181.932 et seq.; many federal statutes, included the ADEA, ADA, NLRA, OSHA, and Sarbanes-Oxley; and other statutes all prohibit retaliation against anyone exercising their right to file a claim.See e.g. Cox v. Crown Coco Inc., 544 N.W.2d 490 (Minn. App. 1996) (noting that employee established causal connection between her discharge and her earlier reports to authorities about safety violations at workplace for purposes of establishing prima facie case of retaliatory discharge in violation of whistleblower statute and the Minnesota Occupational Safety and Health Act, though employer presented evidence that it had intended to terminate employee prior to her making the reports).

2.To establish a prima facie case of retaliation, the terminated employee must show that (1) he/she engaged in statutorily protected activity; (2) the employer took adverse employment action against him/her; and (3) that there is a causal connection between the two.Montandon v. Farmland Indus., Inc., 116 F.3d 355, 359 (8th Cir. 1997).

3.The mere fact that someone asserts a claim does not necessarily bar termination.There needs to be a causal connection between the discharge and the protected complaint.Freeman v. Ace Telephone Ass’n., 467 F.3d 695 (8th Cir. 2006) (termination less than a month after the protected activity was not sufficient to establish a causal connection); Hubbard v. United Press Int’l, Inc., 330 N.W.2d 428 (Minn. 1983) (termination two days after receiving a discrimination complaint established a prima facie causal connection); see also Cox.If the employee fails to establish that causal link, there is no legal violation.See Kipp v. Missouri Highway and Transp. Com’n., 280 F.3d 893 (8th Cir. 2002) (employer was entitled to summary judgment because employee failed to establish causal link between the filing of a charge and her termination; “more than a temporal connection is required to present a genuine factual issue on retaliation”); see also St. Hilaire v. Minco Products, Inc., 288 F.Supp.2d 999 (D. Minn. 2003) (employee could not establish causal link showing employer’s allegedly retaliatory motive played a part in the adverse employment action when all he could show was that the termination occurred after the charge of discrimination was filed).

C.EVEN IF YOU HAVE POOR DOCUMENTATION OR PAST DOCUMENTATION OF GOOD PERFORMANCE, NEW DOCUMENTATION, OTHER EVIDENCE MAY SUPPORT YOUR GOOD FAITH, BONA FIDE BUSINESS REASON.

1.Oral complaints or oral warnings are extremely hard to prove later.If a supervisor or manager wishes to raise concerns about an employee (regardless whether it is at evaluation time or not), there should be some documentation of the concern.A written warning to the employee, with a signed acknowledgment (and agreement of the problem, if possible) is best.If there is a verbal warning given, the supervisor/manager should do an appropriate, objective memo to the file documenting the conversation.Documents do not need to be lengthy, but they should set forth specific detail about the concern, the underlying circumstances of the problem, the reasons for the concern, and pertinent discussions which took place.Certainly, if the employee was warned that further occurrence would cause the employer to take certain disciplinary actions (including termination), that should be documented. However:

a.Although good documentation to prove your position certainly helps, it is not legally required; there are other forms of evidence.

b.Courts and jurors can determine what really happened based on witness testimony and explanations. If the testimony is compelling, it can prove what you need to prove.

c.The truth is the truth.

2.Employers often fail to be completely candid in their evaluations of their employees (the “halo effect”).Erroneously positive evaluations can create problems in the event of future disciplinary or termination proceedings.If an employee has five years worth of “excellent” or “above expectations” grades in evaluations, it is very difficult for that same employer to later claim (assuming this to be the case) that the employee has “had problems for years.”This is particularly complicated if that employee is terminated after making some form of legal claim against the company (e.g. sexual harassment, disability discrimination, whistleblower issues, etc.).However:

a.Circumstances may have changed, requiring different skills and experience.

b.Past performance does not always carry forward. See Miller v. Citizens Sec. Group, Inc., 116 F.3d 343 (8th Cir. 1997) (positive performance evaluations were not evidence that employee was meeting employer’s legitimate expectations when terminated because reviews were too far removed in time from the date of the employee’s discharge; last review was complete 15 months before termination).

c.Management may well have new expectations. See Calder v. TCI Cablevision of Missouri, Inc., 298 F.3d 723 (8th Cir. 2002) (new management brought new performance and professionalism expectations and employee failed to produce evidence that she was meeting these new expectations because positive reviews under prior management were not probative of her meeting the new expectations).

D.IT IS LEGAL TO OFFER A VOLUNTARY REDUCTION IN FORCE TO OLDER WORKERS OR OTHER PROTECTED CLASSES.

1.Consider Voluntary Reductions. Voluntary reductions are legally safer than involuntary reductions. Consider early retirement plans or other voluntary severance packages. Even if they only apply to a protected class, such as older workers, they are legal if properly implemented.See Cooney v. Union Pacific R. Co., 258 F.3d 731 (8th Cir. 2001) (voluntary severance program where benefits were awarded on the basis of location and seniority, not retirement eligibility, did not violate ADEA).See also Mason v. Lister, 652 F.2d 343 (5th Cir. 1978) (voluntary reduction in force plan did not give employer the power to forcibly retire older workers and therefore did not conflict with the ADEA).

2.Make Necessary Disclosures. Ensure that that every eligible employee receives full disclosure regarding the benefits being offered and any conditions for receiving the enhanced benefits.

3.Make Sure it is Voluntary.Take steps to assure that the plans are truly voluntary, without any direct or indirect coercion or other pressures.Set up systems to assure there is no such pressure; to assure that any such pressure is reported and dealt with; and to assure that all employees are well informed pursuant to various laws. Create all related documentation and election forms with this in mind.

4.Get a Release.Releases are typically structured so that employees are offered early retirement incentives, severance pay packages and/or some form of additional compensation in exchange for a release of claims.For a signed release to be a valid waiver of an employee’s age discrimination claims under ADEA, it must comply with the notice, consideration period and revocation right requirements of OWBPA and the Minnesota Human Rights Act, and must be signed knowingly and voluntarily by the employee. 29 C.F.R. § 1625.22; Minn. Stat. § 363A.31.

a.Assure that any releases satisfy the Older Workers’ Benefit Protection Act (“OWBPA”).29 C.F.R. § 1625.22. Recent court decisions highlight the lack of clarity that exists in the practical application of OWBPA’s informational requirements, and the courts’ willingness to invalidate releases in RIFs.Pagliolo v. Guidant Corp., 2007 WL 1040869 (D. Minn. 2007); Thomforde v. Int’l Business Machines Corp., 406 F.3d 500 (8th Cir. 2005); Ellison v. Premier Salons Int’l, Inc., 164 F.3d 1111 (8th Cir. 1999).

b.Assure that any releases satisfy applicable state laws.In Minnesota, for a signed release to be a valid waiver of claims protected by the MHRA, it must comply with requirements under Minn. Stat. § 363A.31, including a 15-day revocation period, and various notices of rights.

E.AN INVOLUNTARY REDUCTION IN FORCE IS LEGAL AS LONG AS IT DOES NOT TARGET (OR DISPARATELY IMPACT) PROTECTED CLASSES OR INDIVIDUALS.

1.In cases involving a reduction in force, where there is not direct evidence of discrimination, a charging party makes a prima facie (see discussion in Section III, A) case for age discrimination under federal law by establishing:(1) he/she is over 40 years old; (2) he/she met the applicable job qualifications; (3) he/she suffered an adverse employment action; and (4) there is some additional evidence that age was a factor in the employer’s action.  See e.g. Ward v. International Paper, 509 F.3d 457 (8th Cir. 2007); Stidham v. Minnesota Mining and Mfg., Inc., 399 F.3d 935 (8th Cir. 2005).

2.If a reduction in force is based on legitimate business needs, and does not target or disparately impact protected classes, it is legal.See Wittenburg v. American Exp. Financial Advisors, Inc., 464 F.3d 831 (8th Cir. 2006) (reduction is force was legal when on financial and business reasons and former employee could not establish pretext).See also Thomas v. First Nat. Bank of Wynne, 111 F.3d 64 (8th Cir. 1997) (former employees could not recover for age discrimination on disparate impact theory because they failed to submit statistics sufficient to raise inference that former employer’s criteria for making its reduction-in-force decisions had a disparate impact on employees within the protected class); McLaughlin v. Esselte Pendaflex Corp., 50 F.3d 507 (8th Cir. 1995) (crucial questions must focus on the effect of the reduction in force and whether statistics show that the layoffs and firings discriminated against a protected class of employees).

3.FIRST: Plan Involuntary Workforce Reductions Before You Implement.

a.Define explicit business objectives and selection criteria.

b.Identify objective evidence of business declines or other needs to justify objectives, such as reduced profits, reduced market share, reduced business, excessive costs, need to reduce production, abandoning line of business, closing facilities, combining departments or functions, restructuring, delayering, etc.

c.Determine the post-RIF structure and tie this to business objectives.

d.If the RIF is not a result of a plant closure, create a new organizational chart, and show how it will accomplish the desired needs.Focus on jobs and not people, justify all job changes, additions, eliminations, etc., and clearly tie any decision to new business objectives.

e.Assure that the new organizational structure, and all decisions relating to it, tie directly to the overall business purpose of the underlying reduction in force.

4.LAST:Select Individual Employees for Termination.

a.Be sure the method to select employees for departure is objective, and use a standard methodology.

b.Analyze jobs, not people, if at all possible.

c.Be sure the job is not needed (i.e., that you will not need to quickly rehire somebody to perform those duties).

5.BE OBJECTIVE, AND HAVE PROOF THAT YOU ARE:

a.Try to base decisions on purely objective criteria, such as length of service, or other objective data.

b.If possible, avoid making decisions based on individual performance.If you must view performance:

(1)Measure your employees’ skills against new jobs and new structures, rather than past performance.
(2)Consider creating an evaluation form used by all persons in the selection process.
(3)Have managers/supervisors objectively rank people in different categories, and explain their objective rankings based on legal and supportable reasons.Compile results, and compare how different managers do the ranking.
(4)Documentation could become a trial exhibit in any challenge to the RIF, so be sure that all documentation is designed to be comprehensible to a judge and/or jury, and that it ties to real, provable facts.

F.EVEN IF THE EMPLOYEE HAS A DISABILITY IT IS LEGAL TO TERMINATE THE EMPLOYEE IF HE/SHE IS NOT A QUALIFIED INDIVIDUAL WITH A DISABILITY.

1.The Americans With Disabilities Act (“ADA”), 42 U.S.C. § 12101 et seq., provides disability discrimination protection to employers with fifteen or more employees.The Minnesota Human Rights Act (“MHRA”), Minn. Stat. § 363A.01 et seq., covers all employers.

2.From the ADA’s enactment in1990 until January 1, 2009, there was a great deal of litigation over the definition of the word “disability.”Employers were able to defend many disability claims on the basis that the person was not “disabled.”See e.g. Sutton v. United Airlines, Inc., 527 U.S. 471 (1999); Toyota Motor Manufacturing, Kentucky, Inc. v. Williams, 534 U.S. 184 (2002).The Americans With Disabilities Act Amendment of 2008 (“ADAAA”) made it clear that, effective January 1, 2009, it will be much more difficult for employers to establish that an impairment does not constitute a disability under the ADA.See ADAAA, amending 42 U.S.C. § 12101 et seq.

3.To be protected by Title I of the ADA, a person must not only be an individual with a disability, but a qualified individual. 42 U.S.C. § 12112(a).A qualified individual with a disability is someone with a disability who: satisfies the requisite work, experience, education and other job-related requirements of the employment position such individual holds, and who, with or without reasonable accommodation can perform the essential functions of the position. 42 U.S.C. § 12111(8).

4.There are two basic steps to determine if an individual is qualified under the ADA.

a.The first step is to determine if the individual is “otherwise qualified”, i.e. meets the necessary prerequisites for the job such as: education, skills, experience, licenses, training, certificates, job related requirements such as good judgment or ability to work with people.

b.The second step is to determine if the individual can perform the essential functions of the job with or without reasonable accommodation. The second step requires a serious review of the “essential functions of the job” and a consideration whether the person with the disability can perform these functions unaided or with “reasonable accommodation.” If a person with a disability who is otherwise qualified cannot perform one or more essential job functions because of his disability, an employer, in assessing whether or not the person with the disability is qualified to do the job, must consider whether there are modifications or adjustments that would enable the person to perform these functions.

5.If the person does not have the needed skill, experience, education or other job-related requirements of the employment position, he/she is not a “qualified individual with a disability.”42 U.S.C.A. § 12111(8). If the employee is not performing the job in compliance with the employer’s legitimate expectations, and the termination is due to performance, behavior or other bona fide business reasons, it is legal to terminate.See e.g. Breiland v. Advance Circuits, Inc., 976 F.Supp. 858 (D. Minn. 1997) (neither the ADA nor the MHRA require an employer to ignore the employee’s misconduct; where an employee violated employer’s workplace policies, employee was appropriately disciplined in accordance with his conduct); Larson v. Koch Refining Co., 920 F.Supp. 1000 (D. Minn. 1996) (purpose of ADA and MHRA is to protect an individual’s disabled status, but it is clear that a company need not tolerate misconduct).

6.Even if the person’s disability is the very cause of the inability to perform the essential functions of the job, termination is legally allowed.If the disability causes excessive absenteeism which clearly affects job performance, termination is proper.Lindgren v. Harmon Glass Co., 489 N.W.2d 804 (Minn. App. 1992) (“the fact that [plaintiff’s] absences were caused by her disability does not automatically render [defendant’s] articulated reason for her termination to be discriminatory.Problems caused by a disability may be legitimate, nondiscriminatory basis for termination.”)Id. at 809; see also Miller v. Centennial State Bank, 472 N.W.2d 349, 353-54 (Minn.App.1991) (performance problems caused by employee’s sleep apnea constituted legitimate reason for employee’s discharge); Spangler v. Federal Home Loan Bank of Des Moines, 278 F.3d 847 (8th Cir 2002) (a “qualified individual with a disability” is “an individual who can perform the essential functions of their job” either with or without reasonable accommodation; where employee’s disability made her unable to come to work on a regular and reliable basis, she was unable to perform essential functions of her job); Lang v. City of Maplewood, 574 N.W.2d 451 (Minn. App. 1998) (police officer that conceded he was totally disabled from performing his job duties due to his mental condition was not a qualified individual with a disability).

G.EVEN IF THE EMPLOYEE IS A QUALIFIED INDIVIDUAL WITH A DISABILITY, IT IS LEGAL TO TERMINATE THE EMPLOYEE IF THE EMPLOYER CANNOT PROVIDE REASONABLE ACCOMMODATIONS OR IF THERE IS A “DIRECT THREAT” TO THE PROPERTY OR SAFETY OF OTHERS.

1.Although disability cases are decided on a case-by-case basis, the fact remains that if the employer can prove that it could not provide reasonable accommodation to enable the person to do the job, then it is legally permissible to terminate. See Lang, supra (where no reasonable accommodation would have permitted employee to perform his job, termination was appropriate).

2.If the person’s disability is such that it creates a “direct threat” to the health, safety, or property of others, and that risk cannot be eliminated by reasonable accommodations, then termination is legally allowed.See Minn. Stat. 363A.03 subd. 36(2) (“disability excludes any condition resulting from alcohol or drug abuse which…constitutes a direct threat to property or safety of others”); 42 U.S.C. § 12111(3) (“direct threat” means significant risk to the health or safety of others that cannot be eliminated by reasonable accommodation); 29 CFR §1630.2(r) (defining “direct threat” as a significant risk of substantial harm and requiring consideration of factors such as the duration of the risk, the nature and severity of the potential harm, and the imminence of the potential harm).

H.IT MAY BE LEGAL TO TERMINATE SOMEONE WHO IS ON FMLA LEAVE.

1.The Family and Medical Leave Act of 1993 (“FMLA”), 29 U.S.C.A. § 2601 et seq., generally assures that eligible employees must be reinstated to the positions that they held before taking the leave or to a position with equivalent benefits, pay and other terms and conditions of employment.Id; Cooper vs. Olin Corp., 246 F.3d 1083 (8th Cir. 2001).

2.However, it may be legal for an employer to refuse to reinstate, or terminate, an employee for economic reasons unrelated to the taking of the FMLA leave.See O’Connor v. PCA Family Health Plan, Inc, 200 F.3d 1349 (11th Cir. 2000) (female employee who was terminated pursuant to a reduction in force while on pregnancy leave under FMLA did not have cause of action, where employer proved that she would have been laid off during FMLA period in any event because of economic losses).

3.An employee may even be discharged for performance while on FMLA leave under certain circumstances.See Throneberry v. McGehee Desha County Hosp., 403 F.3d 972, 977 (8th Cir. 2005) (finding sufficient evidence that the employer discharged the employee during her FMLA leave for poor work performance and disruptive conduct, not for exercising her FMLA rights, the court held that “an employer who interferes with an employee’s FMLA rights will not be liable if the employer can prove it would have made the same decision had the employee not exercised the employee’s FMLA rights.”).

4.Nothing in the FMLA prevents an employer from terminating an employee for job-related misconduct.See, e.g., McConnell v. Swifty Transport, 198 Fed. Appx. 438 (6th Cir. 2006) (employee was properly terminated when he told the disability provider that he would like to “personally come pay him a visit”); Newton v. SunTrust Bank, 2006 WL-1643346 (M.D. Fla. 2006) (employee was properly terminated after employer discovered she falsified medical certification).This is true even if the misconduct is related to the underlying medical condition.Anders v. Waste Management of Wisconsin, 463 F.3d 670 (7th Cir. 2006) (an employee who became violent on the job was properly terminated even though he claimed his behavior resulted from his medical condition; See also Pence v. Tenneco, 169 Fed. Appx. 808 (4th Cir. 2006); McBride v. Citigo Petroleum Corp., 281 F.3d 1099, 110 (10th Cir. 2002) (“the FMLA does not protect an employee from performance problems caused by the condition for which FMLA leave was taken, nor does it require that an employee be given an opportunity to show improved job performance when not ill”).

5.It is even possible to terminate employees on FMLA leave because of the employee’s FMLA application.See, e.g. Crouch v. Whirlpool Corp., 447 F.3d 984 (7th Cir. 2006) (holding that the employer’s honest suspicion of the employee’s misuse of FMLA leave justified his termination, after a private investigator found the employee performing activities inconsistent with his disability leave and employee admitted to vacationing in Las Vegas during the leave).

I.IT MAY BE LEGAL TO TERMINATE SOMEONE BECAUSE YOU WRONGLY, BUT IN GOOD FAITH, THOUGHT YOU HAD A BONA FIDE REASON.

1.Even if the employer was mistaken in finding that the employee committed misconduct, termination may be legal as long as its belief was the basis for the termination; the pertinent question is whether employer honestly believed the employee committed the misconduct. See De Anda v. St. Joseph Hospital, 671 F.2d 850, 854 n. 6 (5th Cir. 1982) (cited in Norcross v. Sneed, 755 F.2d 113, 119 (8th Cir. 1985)) (whether employer’s belief that employee engaged in wrongdoing is wrong does not matter so long as its belief was the basis for the termination); Plagmann v. Square D. Co., 2002 WL 32832031 at *3 (Dist. Iowa 2002) (citing Scroggins v. University of Minnesota, 221 F.3d 1042, 1045 (8th Cir. 2000)).

2.The point remains that the termination was not related to the person’s protected status.

J.IT MAY EVEN BE LEGAL TO TERMINATE SOMEONE BECAUSE HE/SHE BROUGHT SEVERAL LEGAL COMPLAINTS

1.To establish a prima facie case of retaliation, the terminated employee must show that (1) he/she engaged in statutorily protected activity; (2) the employer took adverse employment action against him/her; and (3) that there is a causal connection between the two.Montandon v. Farmland Indus., Inc., 116 F.3d 355, 359 (8th Cir. 1997).

2.Legal protection for employees who make complaints is not absolute. “[T]o qualify for the protection of the statute, the manner in which an employee expresses her opposition to an allegedly discriminatory employment practice must be reasonable.”Rollins v. State of Florida Dept. of Law Enf., 868 F.2d 397, 400-01 (11th Cir. 1999).

3.Conduct that is “disruptive, excessive, or ‘generally inimical to [the] employer’s interests’” is beyond the protection of anti-discrimination statutes.See Kempcke v. Monsanto Co., 132 F.3d 442, 445 (8th Cir. 1998) (regarding ADEA).

4.In determining whether an employee’s conduct is reasonable (and therefore protected) courts have used a balancing test wherein they “balance the setting in which the activity arises and the interests and motivations of both the employer and employee.”Hochstadt v. Worchester Found. for Experimental Biology, 545 F.2d 222, 232 (1st Cir. 1976); see also Rollins, 868 F.2d at 401 (“balancing the purpose of the statute and the need to protect individuals asserting their rights thereunder against an employer’s legitimate demands for loyalty, cooperation and a generally productive work environment”).Essentially the question that must be answered is did the employee go “too far.”Rollins, 868 F.2d at 401; Hochstadt, 545 F.2d at 231, 234. Where the employee acted unreasonably, the employee’s conduct may be deemed an independent, legitimate basis for the employer’s action. Rollins, 868 F.2d at 401; see also Hochstadt, 545 F.2d at 234; Ammons v. Zia Co., 448 F.2d 117, 120-21 (10th Cir. 1971) (affirming lower court’s finding that employee who complained 32 times about low pay based on her sex and violated rules was fired “because of a series of incidents, not related to her sex,” even though employer admitted that her constant complaints had some bearing on its decision to terminate her).

V.the termination decision.

Before making the decision to terminate, assure that, in addition to considering legal risks and options, the employer has done all that can be done to assure that it does not make matters more difficult. A few basic questions should be asked:

A.HAVE YOU COMMUNICATED CLEARLY AND DOCUMENTED YOUR RULES AND EXPECTATIONS?

1.Employers who follow their rules and policies and clearly communicate their expectations to employees can prevent or minimize liability.See e.g. Stiefel v. Allied Domeco Spirits & Wine USA, Inc., 184 F.Supp.2d 886(W.D. Ark. 2002) (employer not liable under the Family and Medical Leave Act for terminating employee after miscarriage because decision to terminate employee for absenteeism was supported by employee handbook); Foster v. Arthur Andersen, LLP, 168 F.3d 1029, 1034 (7th Cir. 1999) (employee failed to establish Americans with Disabilities Act claim although terminated one month after she told her supervisor of her tendinitis because employee was warned that a single misstep would result in her termination and she was terminated when she came to work tardy).

B.did you fairly investigate the facts?

1.Before making a final decision regarding discipline or discharge, management should be certain that an employee has, in fact, violated a work rule or otherwise failed to perform. Failure to do so can lead to a wrongful termination, defamation and/or pretext claim. Accusations or suspicions should be thoroughly and fairly investigated.The employee should be given an opportunity to fully tell his or her side of the story.

C.HAVE YOU BEEN OBJECTIVE AND CONSISTENT?

1.Employers who treat protected classes and non-protected classes the same in same or comparable situations can prevent or minimize liability.Treating employees unfairly relative to others may lead to claims of discrimination and/or pretext under Title VII, ADA, ADEA, EPA, MHRA or other statutes that protect certain groups of people from unfair treatment in the workplace based on their protected class status. See discussion in Section IV, A; see e.g. Simmon v. New Public School District No. Eight, 251 F.3d 1210 (8th Cir. 2001) (holding, in part, that the salaries of male employees are relevant to a female employee’s claim of unequal pay); Graham v. Long Island R.R., 230 F.3d 34 (2nd Cir. 2000) (violation of Title VII when employer terminated African-American employee for alcohol violation after receiving one waiver, but granting Caucasian employee two additional waivers); Blount v. Alabama Co-op. Extension Service, 869 F.Supp. 1543 (M.D. Ala. 1994) (employee could state prima facie case of wage discrimination under Title VII based on her race or sex because three Caucasian males and one Caucasian female who held same position but were paid more).

D.can you live with a possible CLAIM or lawsuit?

1.Face the possibility that a claim or legal action may happen, and ask yourself if that still is better than your alternatives.

2.Make sure that all needed decision makers are in agreement.

3.Know in advance your initial litigation position.

VI.THE TERMINATION PROCESS.

A.DON’T MAKE matters worse by making things up; BE HONEST.

1.Lying about the reason for termination will make matters worse.

2.A mediocre story told well is better than a great story told poorly.

3.A truthful defense is less expensive to litigate, and easier to prove.

4.Avoid:

a.Pretext claims.Even if an employer can offer a legitimate non-discriminatory reason for an employment action, employees can prove that the alleged reason was just pretextual by pointing to other employer actions that show discrimination or inconsistency.See e.g. White v. McDonnell Douglas Corp., 985 F. 2d 434 (8th Cir. 1993) (if employer articulates reasons sufficient to rebut prima facie case of race or sex discrimination, inquiry proceeds to new level of specificity; employee is entitled the opportunity to show that stated reason for employer’s action was in fact pretext); Potter v. Ernst & Young, LLP, 622 N.W.2d 141, 146 (Minn. App. 2001) (holding employment discrimination plaintiff can prove pretext either by presenting direct evidence that discriminatory reason motivated employer’s decision or by presenting evidence that employer’s proffered reason is unworthy of credence, thus raising inference that real reason is discriminatory).

b.Defamation claims.Terminated employees are bringing an increasing number of “defamation” lawsuits against their former employers.Consequently, employers should make sure that the documentation regarding all employees focuses on objective, provable facts.Broad, subjective statements such as an employee is “incompetent” “lazy” or has committed “misconduct” should be avoided.Instead, specific performance problems and/or rule violations should be itemized (e.g. produces 40 widgets when 50 are the expected goal, late for work three times in one week, filled in extra hours (unworked) on time card, etc.).To further prevent liability for defamation, employers must make careful investigations of the facts before terminating or disciplining an employee.For example, if an employee is terminated for theft (and implicitly called a “thief”), the employer may be liable for defamation where there was, in fact, no proof to implicate the employee and/or the employer conducted a sloppy or minimal investigation.

c.“Whitewash” accusations; looking like a liar.

d.Fact disputes; pro-employee juries.

B.maintain confidentiality

1.Employers must hold information in the strictest confidence.Written documentation should be tied to the objective facts and be seen only by those who need to be involved.Likewise, conversations of employment matters should be limited to those involved and not discussed with other employees, or especially with persons outside the company.

2.In addition to defamation and other employment issues, there is some risk of an action for invasion of privacy. The Minnesota Supreme Court has recognized a cause of action for invasion of privacy.Lake v. Wal-Mart Stores, Inc., 582 N.W.2d 231 (Minn. 1998) (recognizing cause of action for (1) intrusion upon seclusion, (2) appropriation, and (3) publication of private facts but declining to recognize an action for false light publicity).See also C.L.D. v. Wal-Mart Stores, Inc.,79 F.Supp.2d 1080, 1082 (D. Minn. 1999) (relating to disclosure of private health information to three other managers); Bodah v. Lakeville Motor Express, Inc., 649 N.W.2d 859 (Minn. App. 2002) (relating to dissemination of social security numbers to 16 managers of affiliate).

C.Timing the Termination

1.Don’t terminate prematurely.Before an employee’s employment is terminated, the employer should take steps to assure that the employee’s rights have not been violated, and that termination is likely to withstand a legal challenge.Make sure that the termination was based on good faith, lawful reasons; that the employee has not been discriminated against, or had other legal rights violated; that the grounds for the termination are supported; and that the records properly reflect what the employer understands to be the situation.

2.Having said that, employers should also realize that sometimes termination decisions are made too late.Some employees create exhaustive and frustrating problems for employers.This can be costly, counterproductive and create morale problems.Also, in certain circumstances, that employee’s presence can give him or her (if acting in bad faith) an opportunity to develop, create, and even make up claims which might not otherwise exist.Beware of the following potential situation: an employee who is in constant trouble, and probably should have been asked to leave the company months ago, is clearly about to lose his or her job; suddenly, often after being summoned to the final termination meeting, that employee reports a work injury, a sexual harassment claim, a disability discrimination claim, a whistleblower claim, or any of the other varieties of claims which employees can make; at that point, the employer who goes forward with the termination will undoubtedly be accused of wrongful retaliation.In short, there are circumstances where the employer would have been better off making the termination decision earlier and acting on it.Procrastination can be very expensive.

3.Once a decision is made to terminate an employee, employers must decide how quickly to do it, whether to give the employee several weeks notice, whether to ask the employee to leave the premises on the spot, etc.These decisions have to be made on a case-by-case basis.

D.Telling the Employee.

1.Ordinarily, a face-to-face meeting between the employee and at least two representatives of the employer, is the best way to inform an employee of the termination.The meeting should (generally) be brief, but the representatives of the employer should be honest, clear and direct.The employer’s representatives should concisely state the reasons for termination, but not enter into an argument regarding those reasons.The reasons for termination should be documented, signed and dated, and placed in the employee’s personnel file.

2.It is a good practice for employers to give the employee some (but not in great detail) idea what he or she can expect.For example:

a.Make it clear what you expect and do not expect in terms of performance.If you are asking the employee to leave immediately, make it clear that he or she should not be performing any more services on behalf of the company, making any agreements on behalf of the company, contacting customers of the company, etc.

b.Discuss what company property you expect to have returned, and arrange for a time and place (appropriately supervised if needed) to get it and for the employee to pick up his or her personal belongings.

c.Explain to the employee what he or she can expect in terms of post-termination information and compensation (final pay checks, unpaid accrued vacation, COBRA letter, possibly discuss – but definitely do not guarantee – the employee’s rights to apply for unemployment, etc.)

d.Provide a simple letter, confirming the termination, the employer’s expectations about responsibilities and when the employee can expect to receive final wages, COBRA letter, etc.

E.TRUTHFUL REASONS LETTER

1.Minnesota law allows employees who have been involuntarily terminated to request, in writing, that the employer provide a written statement of the “truthful reasons” for termination.Any statement furnished by the Employer under this provision of the law cannot be made the subject of any action for libel, slander, or defamation by the employee against the employer.Minn. Stat. § 181.933 (an employee may, within 15 working days of termination, request in writing that the employer inform the employee of the reason for the termination; the employer must respond in writing within 10 working days).

2.If employers are asked to write this letter, and/or asked to provide terminated employees with copies of their personnel records (Minn. Stat. § 181.961 (employers are required to provide the employee with an opportunity to review the employee’s personnel record upon written request by the employee)), that may be a sign that the employee is contemplating litigation, and has spoken to an attorney.Regardless, this letter may become critical evidence as part of a future unemployment claim dispute, workers’ compensation dispute, or any other type of wrongful termination/defamation claim.

3.The letter, if well done, may dissuade a plaintiff’s lawyer from pursuing the case and/or become evidence in some future proceeding.It is important for employers to take the time to do a good, thorough job on this letter.Be sure to fairly and objectively state all of the reasons for the termination.If you fail to do so here, you may have a hard time explaining other issues later. And be sure that you can back it up with evidence.

4.Depending on your level of documentation and confidence that employees will be around long term, you may want to have counsel interview people, and perhaps even obtain written statements to lock in the facts.

F.UNEMPLOYMENT INSURANCE

1.Unemployment Insurance. Minn. Stat. 268.029 et seq.Employers often underestimate the importance of unemployment claims by terminated employees.Although a good legal argument can be made that filings and decisions in unemployment hearings are not “admissible” as evidence in subsequent wrongful termination lawsuits (See Minn. Stat. 268.105, Minn. State. 268.19), the documents can form the basis for later inquiries, investigations, examinations, etc. Care should be taken to file detailed and complete information with the Department of Jobs and Training, as part of the unemployment claim process.If an employer previously was asked to write a letter stating the “truthful reasons” for termination as discussed above, employers may want to submit that letter to the unemployment division.Regardless, it is essential for employers to verify the facts before responding to the initial unemployment claim and any subsequent hearings.

G.POST–TERMINATION NEGOTIATIONS

1.Severance/Settlement/Release Issues.Employers need to consider when, if ever, they should offer employees some sort of post-termination compensation (severance or settlement), and whether they should seek an appropriate Release of Claims from the employee.These decisions can only be made on a case-by-case basis, depending on all of the facts and circumstances.

2.Employers should consider when, if ever, they wish to enter into negotiations with employees, who should do the negotiations, and what the tone of the negotiations should be.This period of time creates opportunities to avoid lawsuits which might otherwise occur.Unfortunately, it also creates potential risks of creating lawsuits which would not otherwise occur.

3.Beware of setting precedents.While it is often easier and cheaper to offer some amount of money for a release, in order to avoid potential litigation, beware of the impact that may have on future employment decisions.If, for example, an employer pays an employee three months of severance pay in exchange for a release simply because that employee is a member of a protected class, other future similarly situated individuals may expect the same or more; it may prompt others to threaten or bring legal actions which otherwise would not have considered.On the other hand, obviously, an appropriate release for a reasonable price – in the right case – could prevent a great deal of litigation expenses, exposure and publicity!Employers should consider these issues in each situation.

VII.CONCLUSION

Even if an employer successfully defends a lawsuit, the financial cost, damage to morale and lost productivity cannot be recovered.Employers should always strive to avoid problems in the first place if possible. When the decision is made to terminate, despite whatever risks are ahead,employers should take as many actions as possible to create layers of safety nets (factual defenses, legal defenses, and damage control), and should maintain evidence of fairness and good faith, in order to minimize litigation expenses and exposure.

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