Avoiding Retaliation Liability – The Difference Between What and Why

  • Employment & Human Resources
April 17, 2023

Retaliatory discharge is a claim that an employee was fired, not for a legitimate business reason, but rather in retaliation for the employee taking some legally protected action such as: making a workers’ compensation claim, taking FMLA leave; or reporting harassment, unsafe working conditions, or some other illegal activity.

Wrongful termination lawsuits are unique. In most lawsuits, the fight is about what happened. For instance, in a suit over a traffic collision, the fight might be about which driver had a red light and which had a green light. If the Defendant is found to have run the red light, it won’t matter why she ran it. In a wrongful termination suit—particularly retaliation suits—this is all turned upside down. Most of the time it is clear what happened: The employee engaged in a protected activity, and later the employer terminated the employee.

This difference is crucial because the fact at issue—why the firing took place—can’t be photographed, measured, or even directly documented. Why the employee was fired is ultimately in the heads of the people who made the decision; there is never direct evidence of why people did what they did.

With that perspective here are four simple steps you should take any time you are disciplining or discharging an employee who has engaged in protected activity. We’ll illustrate these steps with the story of Nine Fingered Joe:

Joe is a pretty careless punch-press operator. The units he produces have about three times defect rate of those produced by other employees. He uses poor body mechanics when lifting product and has had many low back injuries. His injuries have put him out of work which slowed production, and cost the company money for his medical bills.

Yesterday, he lost a finger doing routine maintenance on his machine because both he and Supervisor failed to follow lockout procedures. After the incident (which Supervisor falsely blamed solely on Joe) Joe reported to the Division Chief that Supervisor was also at fault. There followed a very unprofessional shouting and swearing match between Joe and Supervisor.

Plant Manager calls a meeting of Division Chief and Supervisor to discuss what to do about Joe. Plant Manager, Division Chief and Supervisor all want to fire Joe for “poor performance” but they never specify what that means. By “poor performance” the Plant Manager means that units produced by Joe have three times the defect rate of other employees’ units. Division Chief means that Joe has missed a lot of work due to his multiple workers’ compensation injuries. Supervisor is outright lying and actually wants Joe fired because Joe reported that Joe’s latest injury was because Supervisor didn’t enforce lockout procedures during routine maintenance.

As you can see, each manager has their own reason for the termination. One of them is legal, the other two are illegal retaliation.

The following four techniques can help minimize liability for retaliation when Joe is fired.

  1. Put the Reason in Writing. Minnesota and some other states require that the employee be told, in writing, the truthful reason for termination, if the employee demands it. Even if you don’t expect the employee to ask, I recommend that you ALWAYS put the reason in writing BEFORE the termination. Doing this before the termination is really more about the process than the product. What this is really about is making sure you have a simple, truthful, understandable and legal reason for the termination that you can convey to an attorney, investigator, judge or jury.Putting the reason in writing is even more important when more than one person has a hand in the decision. By the exercise of putting the company’s reason in writing—with anti-retaliation laws in mind—the decision makers can be deliberate about what is officially in and out of the reasons for termination. Rather than “poor performance” they’ll end up with something better like “Your defect rate on units you produced was 300% higher than the company average.” More importantly, if the Division Chief and Supervisor ever have their deposition taken, they will be able to truthfully give the company’s legitimate reason for termination instead of their own illegal reasons.
  2. Bona Fide Business Reason. This is built into the process of writing the reason for termination. Obviously, Joe’s report of Supervisor, and his use of workers’ compensation benefits needs to be off the table. Any discussion of firing for these reasons should be shut down immediately.Bona fide reasons for termination in our process above could include: (1) the high defect rate; (2) improper safety procedures; and (3) swearing at his boss. There are times in life when more is better and one might be tempted to include all three. But (2) and (3) are awfully close to protected activity. Yes, you can fire for a safety violation that led to a work comp injury, without firing for the work comp injury; but it’s not a safe bet that a judge, jury, or investigator from the Department of Labor will appreciate the difference. Better, in this case, to pick only the one reason that has nothing to do with protected activity: (1) the high defect rate.
  3. Consistency and Comparables. The point of all of this is to prove that the stated legal reason for the termination was the real reason and that the protected behavior had nothing to do with it. This is important because the termination is coming close in time to the protected behavior. The company will do well to show that it has always terminated for a high defect rate. At the same time, it would be helpful to show that it has a history of retaining employees who have had workers compensation injuries.
  4. Eliminate Bias From the Decision Makers. In our hypothetical above, does Supervisor add anything to the conversation? No. His only involvement in the story—getting Joe hurt, and then lying about it, and then fighting about it—is dangerously close to the protected activity of reporting the safety violation. Even the heated argument between Joe and Supervisor could be construed as a fight about the safety violation or Joes’ report of the safety violation. Even if Supervisor provides facts about what happened to the people who make the decision, he should have no say in the decision. More importantly, Supervisor’s exclusion should be communicated and documented. He should be explicitly told “thank you for telling us what happened; but this is not your decision.” Further, any memorandum of the decision should make it clear that only Plant Manager and Division Chief made the decision.

An employer can never make themselves 100% immune from retaliation lawsuits. However, the steps above will minimize the risk. And this is one area where minimizing liability is in lockstep with good leadership and management. Liability aside, your business will benefit from all decisions being based on (1) a proven process; (2) focus on the needs of the business; (3) consistency; and (4) proactive elimination of bias, or any other non-business motivation

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