July 16, 2014 How To Terminate Employees You're 'Just Not That Into'

Law360, New York (July 16, 2014, 11:15 AM ET) -- People often dread hearing “it’s not you, it’s me.” We all know this platitude is a polite way of telling someone “it really is you.” Like a breakup with a significant other, employers often struggle putting together the right words to breakup with an employee. Managers or human resources personnel may grasp at vague reasons for termination such as “we just don’t think you’re the right fit” or “we’ve decided to go in another direction,” but these vague reasons only raise questions for employees and fact finders. This article discusses common situations where the wrong fit discussion typically comes up, and uses recent examples of federal cases where the employer’s reliance on such vague language backfired during litigation. In addition, the article provides practical tips for managers to avoid the wrong fit conversation. The wrong fit discussion most commonly creeps up in two types of situations. The first scenario occurs when an employer’s business changes over time to conform to industry practices or new technology. The employees must grow and adapt, often times with a steep learning curve. Likewise, managers are given new, aggressive objectives to measure performance, and they struggle to hold accountable their employees, who also happen to be their long-time friends. When an employee fails to meet expectations, a manager may resort to a vague reason for termination, so as not to hurt the employee’s feelings and to remain on friendly terms. The other common scenario occurs when a new manager takes over a poorly performing department with the objective of “cleaning up shop” after the department has coasted under a less attentive manager. Indeed, a common problem with defending against claims by employees in this situation is that the employees have years of perfectly good performance reviews and accolades in their personnel files to legitimately respond to assertions they weren’t the “right fit.” The obvious and inherent risk in using a vague “wrong fit” explanation during termination is that any judge can construe this reason as having multiple interpretations, making it a ripe disputed issue for a fact finder at trial. Likewise, a jury can be easily persuaded that such language evidences possible discriminatory animus based on a protected category (i.e., if the employer couldn’t explain why the employee was a wrong fit then the real reason for termination may have been a protected characteristic). A jury may also feel it is not fair to the employee to give such a vague reason for termination and substitute its own judgment for that of the company. As illustrated by the cases described below, employers should steer clear of such ambiguous reasons for a breakup and give employees more specific reasons for adverse actions, even if those reasons may be difficult to articulate. In Hudson v. Lands’ End Inc., the plaintiff was a general merchandise manager of the men’s division of Lands’ End. Plaintiff had been with the company for approximately 20 years and his employment was terminated when he was 56 years old. At his discharge meeting, the employer told him that he “wasn’t a good fit” without any other reason for the termination. According to plaintiff, three months prior to the termination meeting, a manager also told plaintiff that he was the “wrong fit” for the position and that a “younger” person would be the “right fit.” Plaintiff sued for age discrimination under the federal Age Discrimination in Employment Act. The U.S. District Court for the Western District of Wisconsin denied the employer’s motion for summary judgment to dismiss the age discrimination claims. Specifically, the court found issues of fact as to the real reason for plaintiff’s termination because the employer failed to give any specific reasons at the termination meeting and the reason given was so “vague.” The court also noted that the employer failed to “state clearly” why the plaintiff was “struggling” and “not able to run his business,” even when asked by the plaintiff for specific reasons. In the context of a layoff where a management consultant was terminated for being the “wrong fit” for a consulting firm’s new strategic direction, the D.C. Circuit found issues of fact and reversed the grant of summary judgment to the employer in Barnett v. PA Consulting Group Inc. In the case, the employer decided to “eliminate noncore activity” and focus the management consulting business on several specific aviation industry groups. The employer claimed it laid off plaintiff, a female employee who was 58 years old, because she had an industry focus in the Middle East and North African trade that did not “fit” with the new aviation industry focus of the company. She alleged her termination was based on her age and/or gender under the ADEA and the D.C. Human Rights Act. The trial court granted summary judgment to the employer and plaintiff appealed. The D.C. Circuit reversed and found an issue of fact as to pretext because the company retained a 41-year-old male employee whose industry focus was on China — not the aviation industry — and who similarly did not have a good “fit” with the strategic focus of the business. The “right fit” discussion may also creep into other adverse actions. For example, in Curry v. Contra Costa County, a manager told plaintiff, a 68-year-old mental health clinical specialist already working for the employer, that she was not selected for at least one other vacant position within the county because another candidate, who was 48 years old, was a “better” fit. In response to her claim of age discrimination under the ADEA and the California Fair Employment and Housing Act, the employer articulated its legitimate, nondiscriminatory reason that plaintiff was “not a good fit” for the sought-after position. The U.S. District Court for the Northern District of California found that plaintiff raised an issue of fact as to whether the employer’s reason for not selecting her for the position was a pretext for age discrimination because the employer had not articulated a specific basis for establishing that plaintiff was “not a good fit.” The court took issue with the employer’s attempt to explain why plaintiff was not a good fit for the position, which the court summarized as a “history of not getting along with unspecified other members of the unit, and that unspecified others ... could quit if [she] were hired.” Moreover, these purported concerns were not reflected in any prior performance evaluations and were not otherwise formally documented. As such, the court found “significant and substantial evidence of pretext to survive summary judgment.” As these cases illustrate, employers should be straightforward when managing termination or other personnel decisions. Employers should implement the following strategies to avoid unnecessary right fit or wrong fit litigation: Document and timely communicate specific performance issues to the employee, allowing the employee to improve on the performance problem. If the employer decides to terminate the employee because the employee has failed to improve on the previously raised issues, the employer can rely on prior documentation and the failed opportunity to improve to support the termination decision. If the reason for termination truly is that the employee is not a “good fit” with the company, elaborate on the specific, nondiscriminatory reasons why the employee is not a good fit for what the company needs. For example, is the company focusing on one area of industry over another, as in Barnett? If so, make sure any “good fit” discussion applies uniformly to other employees who also are not a “good fit” for the company’s future direction. If the company is extremely entrepreneurial and in a growth mode, explain specifically why the employee’s specific contributions to date have not supported the company’s entrepreneurial spirit. If, as in Curry, the employee’s attitude or poor interactions on the job is the reason for an adverse action, provide anecdotes illustrating the employee’s attitude and how it affected the ability of co-workers to accomplish their job duties. Focus on showing how those interactions impacted business operations. If the employer is tasking a new manager with turning around a failing department, ensure that the new manager clearly sets forth new expectations and benchmarks at the outset of his or her management of the department. Then, if an employee fails to meet those new benchmarks, the employer can point to the objective benchmarks to support the termination. Make sure human resources or senior leadership trains managers to conduct termination meetings, so that managers are adequately equipped to point to specific evidence of performance problems rather than vague reasons. Consider having a third person from the company in the termination meeting to further ensure straightforward, honest reasons are given. The third person can also act as a witness to any disputed interactions in an ensuing litigation. Avoid defensive explanations (e.g., “This is an at-will state so I don’t need to give you a reason.”). While that may be an accurate statement of the law in many states, it is likely to raise a red flag to a fact finder as to the real reason for termination. This is particularly true if the employer later tries to defend itself in litigation by pointing to evidence of performance or misconduct issues that were not addressed at the termination meeting. Consider the tone and level of detail in any specific documentation, how will it play out to a judge when reviewing dispositive motion papers or to a jury at trial? Being specific with respect to events and anecdotes is helpful to explain the employee’s “wrong fit,” but excessive detail may also create problems for an employer. Reams of paper containing blow-by-blow accounts about an employee’s daily whereabouts may give a judge or jury the impression that the employer is not to be trusted or is out to get the employee. Likewise, excessive detail may “lock in” an employer to one story, preventing the employer from being able to rely on later facts that are discovered to help the employer’s defense. By giving enough detail to put the employee on notice of the performance issue to be corrected, refresh the employer’s witnesses’ recollection of key events and allow flexibility for anecdotal expansion in litigation, the employer will hit the right note to defend itself in “wrong fit” litigation. Even when managers really do intend to convey that an employee is not a good fit for the company’s work ethic or strategic initiatives, the employer’s lack of foresight to collect specific anecdotes, documentation or other evidence supporting a specific reason for termination can land the company in “wrong fit” litigation. By adopting some simple prophylactic measures, an employer can greatly limit exposure to liability by leaving employees little doubt as to the true reason for termination or other adverse action.

—By Joanne A. Buser, Paul Plevin Sullivan & Connaughton LLP Joanne Buser is an associate in Paul Plevin Sullivan & Connaughton's San Diego office. The opinions expressed are those of the author(s) and do not necessarily reflect the views of the firm, its clients, or Portfolio Media Inc., or any of its or their respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice. All Content © 2003-2014, Portfolio Media, Inc.

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