Should company settle with employee it fired?

ManagementBy LYNNE CURRYJuly 17, 2012 

Q. I didn't know we had a problem in one of our branch offices until I got a letter from an attorney. A terminated employee alleges that she complained about porn on a co-worker's computer and sexual jokes by other co-workers, jokes her supervisor supposedly heard and laughed at.

She says she complained to the accounting manager charged with handling human resources, not realizing the manager was a close friend of the supervisor. She says she got brushed off.

When I checked with the supervisor and accounting manager, both said the woman was fired for attendance problems and her complaints had been appropriately handled and weren't a factor in her firing.

Our attorney, however, told me we should settle because it will be difficult to prove we didn't retaliate because the employee complained only weeks before her firing and we never did a formal investigation of her complaints.

The accounting manager and supervisor are both angry that I'm considering settling, given that attendance problems are a valid reason to terminate under our company's policies.

We do rely on our managers and supervisors to fairly enforce policies and I believe the supervisor when he tells me the employee was a poor worker and a troublemaker. What's my best course of action?

A. Immediately investigate the situation. Pull the employee's records and find out the extent of her absenteeism and how your accounting manager and supervisors handle other employees with similar attendance problems.

Investigate both the joke-telling and porn allegations. Find out what your accounting manager and supervisor did to look into and resolve those complaints. You need these facts before you and your attorney decide how to handle the situation.

You can soften the edges of your supervisor's and accounting manager's anger if you let them know that they could be held personally liable if the former employee takes her case to trial.

A May 2012 court ruling in the case of Smith v. Bray confirms that HR managers and supervisors who participate in allegedly retaliatory firings can be individually sued.

Smith, a technician dismissed for excessive absenteeism, sued both his manager and the company's HR manager under federal statute Section 1981, which prohibits retaliation in contractual relationships, allows for uncapped damages and has a four-year statute of limitations. His supervisor settled. While the HR manager eventually prevailed by showing she had no retaliatory motive, she suffered through a lengthy legal battle.

Although polices serve as guidelines, supervisors can't apply them without looking at the entire situation. Jeff Ellis Management recently learned this when firing lifeguard Tomas Lopez after Lopez swam 1,500 feet outside the company's "protection zone" to save a drowning man's life.

Company supervisor Susan Ellis compounded the error by defending the firing decision on television, saying, "We have liability issues and can't go out of the protected areas. What he did was his own decision. He knew the company rules and did what he thought he needed to do."

Meanwhile, supervisors investigating the situation terminated two other lifeguards for saying they would have made the same decision as Lopez. Two other lifeguards quit in protest.

After a widespread public outcry, the company offered to rehire the three terminated lifeguards. Although Lopez doesn't want his job back, the two other guards could sue their former company for firing them in retaliation for their statements.

What would have prevented problems for the lifeguard company and you? Companies should thoroughly review any proposed termination before acting. In your case, while your employee may have merited termination, the timing of her complaints gave her ammunition for a retaliation lawsuit.

Does this mean an employer can't fire a complaining employee? No, it means the employer has to be able to prove it took the complaints seriously, that the complaints had no relationship to the employee's later discipline and that the discipline was completely justified.

Management/employee trainer and the owner of the consulting firm The Growth Company Inc., Dr. Lynne Curry provides columns to newspapers in multiple states. For questions, Curry can be reached at the growthcompany.com.

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