Havre Job Service Employers' Committee                                        Employer Resource Guide                            

How to Avoid Wrongful Discharge Suits

Each year thousands of employers are sued by employees for wrongful discharge. In order to avoid such lawsuits, employers should carefully review their personnel policies and practices. The items in the following checklist represent issues that occur with frequency in such lawsuits.

Specific activities. Companies should review practices and procedures governing the following:

1. Employee handbooks or any official communication to employees,
2. Performance appraisal forms and procedures,
3. Hiring and termination procedures,
4. Human resources development programs, and
5. Consistency of personnel policies and practices.

Policy statements. A policy statement should not make any promise that could be construed as establishing a contractual obligation. It should be a broad and comprehensive statement of a goal, unlike a procedure, which should be specific and action-oriented. Nevertheless, a policy should still clearly communicate its intent to all employees. The policy statement itself should include:

1. Procedures or steps used to apply or implement the policy;
2.  Management responsibilities or what managers are expected to do and methods for monitoring or controlling how the policy will be implemented or enforced;
3. Consequences or statements indicating what will occur if the policy is violated and positive statements related to the value of following the policy;
4. References or summaries of specific legal documents if legislation or common law is involved in the application of the policy or is the reason for the policy.

Additionally, a policy should be:

1. Broad, leaving room for discretion and interpretation and allowing its application to be flexible;
2. Comprehensive, covering all aspects of a relevant personnel activity;
3. Inviolate, allowing no exceptions unless, under special circumstances, the policy itself does not apply;
4. Authoritative, identifying responsibilities and both positive and negative consequences of decisions made within the context of the policy;
5. Reasonable and applicable, so that managers can ensure that their decisions are fair and consistent and in accord with the company's goals.

Policy language. When constructing policy statements or procedures, employers should use:

1. Short, clear sentences rather than technical or legal jargon or lists and outlines;
2. A friendly responsive tone rather than impersonal legalistic language;
3. Personal pronouns rather than impersonal words, to enable readers to clearly see how a policy applies to them;
4. Ordinary language that communicates what the employer really means, rather than ambiguous language that may allow a supervisor to make an inappropriate decision;
5. Action-oriented words in the form of active verbs.

Company handbooks. Company handbooks should be carefully examined, and any handbooks that contain the following language should be either modified or deleted:

1. A statement that termination will be for just or proper cause;
2. A statement that indicates an employee will be placed on permanent status after successful completion of a probationary period;
3. Managers may want to consider inserting the following statements in company handbooks:
   1. A statement that informs employees that the company retains the right to change the employee handbook at its discretion;
   2. A disclaimer to the effect that the employee handbook is not a contract, and any employee may be terminated by the employer at any time for any reason.

Performance appraisals. In order to decrease an employer's vulnerability to a wrongful discharge claim based on the company's performance appraisal system, the company should do the following:

1. Inform employees of any decline in the quantity or quality of their performance;
2. Advise managers to discuss each and every incident affecting performance with an employee when the incident occurs, and maintains a record of these actions as documentation for future performance appraisals;
3. Once an employee's deficiencies have been observed, provide the employee with an opportunity to improve performance;
4. Develop clear, objective criteria for evaluating performance;
5. Train managers in the administration of the performance appraisal system, and instruct them in how to conduct a performance evaluation interview;
6. Require employees to sign a statement that they have been informed of the results of their performance appraisal.

Recruitment and selection practices. Managers should carefully evaluate their recruitment and hiring policies and practices to reduce the probability of exposure to a wrongful discharge claim. The organization should consider:

1. Including in all employment offers a statement that the employee may voluntarily terminate his or her employment with proper notice, and that the employee may be terminated by the employer at any time for any reason;
2. Deleting from any recruitment brochures or applicant correspondence any promises of long-term employment, fast-track careers, a fixed term of employment or permanent employment;
3. Discouraging supervisors from promising long-term employment, job security, permanent positions or termination only for just cause.

Employee discipline. Courts frequently use just cause standards when reviewing wrongful discharge claims. Therefore, employers should ensure that their disciplinary actions generally are consistent with the following guidelines:

1. Employees are informed of work rules and the consequences of violating them;
2. The employer makes a reasonable effort to investigate incidents before administering discipline;
3. Incidents are investigated fairly and objectively;
4. All rules are administered evenhandedly and without discrimination;
5. The degree of discipline administered is related to the seriousness of the offense, the employee's prior record and other mitigating circumstances.

Resignations. Review voluntary resignations for instances in which an employee states that the company has not adequately supported the employee in performing the functions of his or her job. Pay particular attention to situations where the employee infers that the employee's working conditions were so difficult and intolerable that the employee had no other choice but to resign. In the event a resignation alleges this type of situation: 

1. Investigate each of these situations thoroughly to determine if there is any basis in fact.
2. Determine if the employee has taken medical leave due to work related matters, such as stress, prior to the resignation.
3. Look for independent collaborative evidence.
4. Compare the employee's allegations to exception criteria of at-will status that can arise from public policy or failure to act in good faith.

Terminations. When terminating employees the company may want to consider doing the following:

1. Have someone other than the terminating employee's supervisor conduct an independent review of the facts of the termination before the final termination decision;
2. Monitor termination procedures to make sure that supervisors consistently apply personnel policies and procedures over time;
3. When employees resign voluntarily, ask them to sign a separation agreement. In the agreement, the employees agrees not to sue the company and releases it from all future liability arising from the resignation in exchange for some benefit like a letter of reference or severance pay;
4. Have a detailed written explanation of the reasons why the employee was terminated;
5. Respond to any questions raised by the employee about the termination accurately, and expeditiously, giving him all the reasons for the action.

Human resources development. In order to develop a positive human resources management program while at the same time avoiding exposure to wrongful discharge claims, companies should consider doing the following:

1. Inform supervisors about those personnel policies and practices affected by employment-at-will issues.
2. Advise supervisors on what they should tell applicants in employment interviews or correspondence.
3. Point out to supervisors those statements that they are not authorized to make.
4. Inform supervisors of legal changes regarding employment-at-will issues.

MEMO TO MANAGERS: Statements to avoid in the recruitment process.  

TO:

FROM:

DATE:

SUBJECT: Statements to avoid when interviewing or recruiting prospective employees

The following statements must be avoided at all times, but particularly when interviewing job candidates and when in the process of recruiting either in house or externally. To make these statements could be construed by the prospective candidate and potentially by a court of law as indicative of the existence of an employment contract when the employment is at will. When interviewing or recruiting, avoid making statements such as these:

1. You will have a long, rewarding and satisfying career ahead of you.
2. We will pay half your moving expenses now and the balance after one year.
3. You will be with us as long as you do your job.
4. You will not be fired without just cause.
5. This is a company where you can stay and grow.
6. In this company you'll have lots of job security.
7. There are no layoffs within this organization.

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