Opinion: Termination Without Litigation

By Howard Kurman, Chairman, Labor & Employment Practice Group, and

Julius Steiner, Principal, Offit Kurman Law Firm

With unemployment a lingering national problem, it’s not surprising that “wrongful termination” lawsuits have become something of a cottage industry.

There are any number of attorneys happy to assist employees who feel they were fired without cause, and as a result, employers are finding themselves in a morass of logistical and legal problems even if the reasons for termination to them seem inarguably “with cause.”

If unemployment remains a constant, the problem of layoffs and lawsuits could be particularly thorny for large, national trucking operations that give the impression — if not quite the reality — of deep pockets. But it is essential that even smaller carriers protect themselves and their other employees ahead of time, and not just go ahead with the termination and react to whatever happens as it is happening.

The key to this is to be proactive with a proper workplace investigation conducted before the actual termination in such a way that your defenses are up and running and ready. The following are some do’s, don’ts and general guidelines for such an investigation:

• Begin by adequately investigating any complaints or performance issues with an employee subject to termination. Skipping this may expose you and your company to liability unnecessarily.

• In general, workplace investigations are necessary to ensure objectivity — and also demonstrate that enough fact-finding was undertaken before the severe action of employee termination.

While conducting an investigation:

• Ensure that all relevant resources have been assembled and assessed.

• Fully go over all performance reviews and disciplinary records to ensure that when it comes, the termination message is clear, consistent and supported by a written record.

• Review all applicable employment records and/or policies, not only to ensure there are appropriate grounds for termination but to ascertain if the employee is contractually entitled to benefits at termination or, conversely, is obligated to abide by restrictive covenants such as noncompete or nonsolicitation agreements.

• Be aware that conducting a thorough, objective investigation of the facts leading to a termination — including a review of applicable employment agreements and policies — puts the employer in the best position to explain and document the reasons for the termination coherently and consistently. That enables him (or her) to point to the investigation as proof of due diligence and to properly explain and implement any ongoing obligations that continue after termination of employment.

• Using suspensions during the course of workplace misconduct investigations is often recommended. However, be mindful of how long the employee’s suspension lasts and be able to demonstrate that the investigation has been conducted as thoroughly, efficiently and fairly as possible, given the circumstances.

• Be aware that who conducts the investigation is often as critical as how. In medium-to-large businesses, the human resources division usually will conduct at least part of it, but the person who investigates must be properly trained in legally sufficient investigatory techniques. That includes using appropriate interview methods and documentation requirements — and avoiding any dangerous conclusions in the interview notes. Remember that interview notes are not private. They are generally discoverable in future litigation, and in serious cases, they should be scrutinized by counsel.

Be cognizant, too, of relationships with outside counsel. There are two roles outside counsel can play in this situation:

They may conduct the actual investigation, which is frequently the case when the investigation involves tricky issues such as sexual harassment or suspected theft.

Or, outside counsel can offer advice on the process of the investigation and the witnesses, as well as documents that need further examination. This process includes vetting the investigation to date to ensure that both substantive and procedural due process have been accorded the suspected wrongdoer.

During any investigation, closely control both internal and external communications so that intemperate and inappropriate comments don’t reach other managers/supervisors. Also, consider directing communications to outside counsel to shield their substance pursuant to the attorney/client privilege.

Finally, observe these principles of witness interviews:

• Conduct investigatory meetings in private — not in the middle of the office, garage or repair facility. Consider using a second person to record notes, as it is difficult for one person both to ask questions and record answers. And, of course, the interviewers should be management representatives.

• In nonunion settings, an employee has no right to be represented by any other employee (unlike a unionized setting, where that is the norm).

• In a situation where an employee requests that an attorney be present during an investigatory interview, say “no.” Outside attorneys usually have no legitimate right to participate in internal investigatory proceedings. If the employee refuses to be interviewed without an attorney present, there is no obligation to permit him to be so represented, and you can make it clear that his/her refusal may be construed as lack of cooperation.

• Clean up witness interview notes and get them typed, taking the opportunity to remove impertinent remarks that may be misinterpreted. Keep interview notes objective and unemotional.

• If an investigation might lead to termination, be sure to interview the employee who may be terminated. Outside fact-finders will be checking for the procedural fairness, i.e., due process, you afford to the employee whose job is on the line. Even if you believe termination is a foregone conclusion, interview the employee anyway.

• Have a review process in place so that after the interviews are over, there is an objective evaluation of all testimony.

• Remember that the interview process — particularly with workplace harassment at issue — is often a moving target. Be willing to expand your interview subjects beyond the people you initially believe will complete your investigation.

Terminations today pose far more legal risk than they did even 20 years ago, and a disgruntled employee who has been terminated will likely challenge job loss via many legal avenues. Even a frivolous challenge can be very costly for an employer in terms of legal expenses, lost time and productivity and damaging publicity. It is critical that even a “routine” termination be well thought out, meticulously documented and effectively implemented.

Offit Kurman is a full-service commercial law firm with offices in Maryland, Pennsylvania, Delaware and Virginia.