We are considering terminating an employee who has been with us for two years, but we’re concerned we may be at risk if we do. She’s 50 years old and has a hearing disability. She is a nice person but while her performance is okay, she has never developed into the kind of an employee we like to have at our nonprofit. There have been a few noteworthy performance issues in the past year that we didn’t document, but she seemed to improve. Yet overall, she just doesn’t seem to be a good fit.
She is an at-will employee according to our State law and our own policies, which she has acknowledged in writing. We’ve always understood that we can fire an at-will employee because they are at-will and there is no risk of any claims coming back against us. Is that true? Also, there’s a complicating factor in her case: she recently filed a well-justified sexual harassment complaint that resulted in the termination of a long-term, popular employee.
Can we terminate her without the risk of a lawsuit?
Dear Strong Willed:
While the employment relationship in most states is defined as “at-will”—meaning an employee, in the absence of a contract to the contrary, can quit or can be fired for any or no reason at any time—there are a number of exceptions. For example, many states will not enforce an at-will policy if the termination violates public policy or results in breaking the law—such as terminating an employee because they didn’t vote for the candidate management supports. In this case, the at-will relationship would not protect the employer from a wrongful termination lawsuit.
Another exception that is almost universally recognized comes from the concept that an employee cannot be fired for engaging in protected activity under the law, such as filing a workers compensation claim, pursuing a medical leave under FMLA or, as in this case, making a complaint of sexual harassment. The same exception applies when termination occurs because of a protected class, such as race, age, religion, disability, and a number of others that are set out by Federal and State anti-discrimination laws.
While it should be fairly clear that this kind of termination would be illegal and not protected by the at-will doctrine, the fact that an employee is in one or more protected classes or has engaged in protected activity must always be considered in a risk analysis when making termination decisions. This is because, in this day and age, the mere fact the employee is in those classes or engaged in that activity could form the basis of a claim of wrongful termination, discrimination, or retaliation.
In your situation, there is a risk that the employee could file a lawsuit and allege that she was terminated because she has a disability, is over the age of 40, or is being retaliated against because she filed the sexual harassment complaint. Your burden then becomes one of proving the motivation for the termination was not her disability, age, or sexual harassment complaint.
At that point, you would have to explain the legitimate justification for terminating her. This is why it is essential to have clear and well-defined business reasons—supported by documentation—to back up the decision to terminate. In the situation you describe, it sounds like there would not be much to offer in defense of your situation since there was little or no documentation of her legitimate shortcomings.
If your only response to why the decision to terminate was made is “she was not a good fit,” you can expect her lawyer to ask you: “Was she not a good fit because she was disabled, older, and/or made a sexual harassment claim?” As an aside, this is why I always suggest you never use the phrase, “not a good fit” when terminating someone. Instead, be prepared to explain the tangible performance issues and reasons why you drew that conclusion.
The best way to contain risk arising from any termination, and regardless of the at-will doctrine, is to:
- Make sure there are clear and supportable reasons for a decision to end an employee’s relationship with your nonprofit after documented efforts to raise and remedy any performance or conduct problems that might arise, and
- Carefully evaluate whether the employees are in any protected classes or participated in any protected activities and evaluate whether the reasons chosen to support termination are sufficiently documented to overcome the potential of the employee claiming it was the protected classes or activities that led to your decision.
Finally, always remember, being at-will only defines the relationship—it is not a reason to terminate. As should be clear, unqualified reliance on at-will employment to support a termination without proper preparation and risk assessment can lead to serious, and at times, expensive, consequences.
I hope this helps and please feel free to share comments below if you have any more questions on this matter!
Mike Bishop is a graduate of the University of California, Davis with a Bachelor’s degree in Political Science, and a graduate of the University of the Pacific, McGeorge School of Law. He is a member of the State Bar of California and has been admitted to practice in a number of Federal District Courts in both California and Ohio. During his legal career, he worked for 32 years with a Sacramento law firm where he focused on employment litigation in both State and Federal courts. During that time he defended employers in litigation. In 2016, he began his work as an Employment Risk Manger for the Nonprofits Insurance Alliance, assisting nonprofits in evaluating employment risks. He lives in Lakewood, Ohio.