Oct 18, 2018

Test employee terminations for defensibility

Illinois unemployment levels are low and skilled labor is at a premium. In this strong economy, finding suitable employees is increasingly difficult. Advertising, screening applications, interviewing, onboarding and training can be time consuming and as long as positions remain open, the more work opportunities are lost.

With the high demand for quality candidates, responsible employers must take time to carefully hire, acclimate and train them to build and maintain a productive workforce. Even with employers’ best efforts directed to hiring and training, employers regularly lose employees. Some leave for new opportunities but others may be involuntarily separated. Employees may be terminated if they do not fit in the company culture and others may have unanticipated performance deficiencies that were not remedied with additional focused training.

Because it can be so difficult to find replacements, employers may delay terminating misfit or nonperforming employees. Certainly, the time and energy invested in hiring and training those employees is a sunk cost that will seem wasted in the termination. Employers also recognize that terminating employees will take away their livelihood and their financial means to provide for themselves and their family. If employers provide insurance to their employees, terminations also puts that at risk. While there are state unemployment benefits and continuation insurance, unemployment money is limited and paying up to a 102 percent of the cost of the premiums to continue insurance may be cost prohibitive. As a result, employers may hesitate to terminate an employee even when it is abundantly clear that they should.

The common wisdom is to hire slowly and fire quickly. As noted above, concerns about expected difficulties in hiring replacements and the issues a terminated employee and their family may face can slow down termination decisions. But there is another reason for employers to weigh their termination decision—litigation and exposure. Whenever an employee is terminated they generally feel wronged. Many fail to see or refuse to accept responsibility for how their own actions may have led to termination. If an employer exercised due and deliberate consideration, they should be able to defend its decision. Although many employment relationships are “at will” (meaning that the employment may be terminated without notice and without cause by either the employer or the employee), employees often raise challenges. They may argue their employer based the decision to fire them on an improper factor such as their age, nationality, race, sexual orientation or even claim their employer retaliated against them for participating in a workplace investigation. In that situation, the employer is required to defend the termination by identifying legitimate business reasons for the decision. Legal disputes over employment terminations can be expensive, distracting and time consuming.

When an employer decides it is time to terminate an employee, they should consider seeking legal counsel to test the defensibility of the decision. Briefly reviewing the facts underlying the decision with a seasoned employment attorney will provide the employer with additional knowledge regarding any possible ramifications that might occur as a result of the termination. Armed with this knowledge, the employer may decide to proceed, reconsider or defer its decision. This second look with an attorney will help reassure the employer of the defensibility of its business decision. After a carefully considered termination, employers should be better able to focus their limited time and energy looking forward rather than defending backwards.

If you have additional questions or concerns about terminations, please reach out to one of Chuhak & Tecson’s Employment Law attorneys.

This Chuhak & Tecson, P.C. communication is intended only to provide information regarding developments in the law and information of general interest. It is not intended to constitute advice regarding legal problems and should not be relied upon as such.

Client alert authored by: Jeralyn H. Baran, Principal