Honesty has always been the best policy. Recently, the United States Supreme Court decided a case that emphasized that 'rule' and issued a decision that will probably have a significant influence upon every discrimination case that will follow. The case is Reeves v. Sanderson Plumbing Products, Inc., and the important issue in Reeves is what kind and amount of evidence is necessary for an employer to prevail in a discrimination suit based on age where the employer claims a non-discriminatory reason for terminating an employee.
The Case
Reeves involved a 57-year-old employee of a company that manufactured toilet seats and covers. Mr. Roger Reeves spent 40 years in this company, but in 1995 production was low and Mr. Reeves was terminated, ostensibly because of his failure to maintain accurate attendance records. Mr. Reeves brought suit claiming that the actual reason for his termination was because of his age, in violation of the Age Discrimination In Employment Act of 1967. The jury did not believe that the company was truthful in the reason given for firing Reeves and granted judgment in his favor.
The courts debated whether the employer's failure to establish their alleged basis for termination should result in a decision for the plaintiff. Put another way, should the plaintiff's narrative prevail just because the defendant's narrative failed?
The Supreme Court held that a plaintiff might succeed if the employer's reason for termination is not believed. Why? The Court explained that once the employer's justification for firing has been eliminated, the discrimination may well be the most likely alternative, especially since the employer is in the best position to put forth the actual reason for its decision. Therefore, a jury can infer discrimination when a plaintiff proves that the reason given by the employer for discharge is not true.
Conclusion
This decision puts employers in a position of losing cases involving allegations of discrimination even where none exists simply because the reason given for termination is not believed. What is the lesson to be learned? Employers are in the best position to explain the reason for their actions. Be direct and up front with employees about the reason for termination.
For example, if they are being terminated for failure to make a certain required quota, then tell them so instead of softening the blow with the "it's not you, it's us" speech. Have documentation to support your reasons. Then, you will truly have a reason for termination that cannot be disproved. Honesty, while not always the most popular or easiest policy to follow when terminating an employee, may just be the best policy to protect your company from losing a case of alleged discrimination.
Additionally, termination processes should be fully documented. Contemporaneous notes regarding the employer's motivations and intentions when terminating an employee can help support the employer's later defense against claims of discrimination. If an employee is being terminated for the quality of their work, or their failure to perform job duties, the employer is wise to both hold and document meetings with the employee establishing and discussing the behavior that is the basis for their termination. Had the employer in Reeves kept proper documentation they may have prevailed.
*article courtesy of Thompson Coe.