How? Nardo drafted a performance review that made all his grievances abundantly clear. Before the woman could react, he offered two months' pay and a favorable reference, in exchange for her resignation and an agreement not to sue or bad-mouth the company. "The strategy was fraught with risk," he admits, "but I had to take it. I figured I could always find another sales manager, but it wouldn't have been easy to replace the rest of the staff. In losing one, I gained 10."
The strategy worked, and it makes a broader, and critical, point to all employers. As Lonny Dolin puts it, "I've won awards of a million dollars, when the only amount the defendants had to pay initially was for the employees to be heard out, to be treated reasonably, and to be given back respect."
Modest compensation that the system has lost sight of.
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BE PREPARED
Fighting a disgruntled-employee suit until a verdict is reached can cost the defending employer more than $100,000 in legal fees, says commercial litigator Joseph Ortego. Here are some of his recommendations for keeping out of difficulty.
Hire smart. Every time you take someone on, you also take on the potential of spending time and money getting rid of him. Spell out the job's duties and your expectations at the start.
Document trouble. Prepare for a legal problem by putting events in writing. Be sure more than one person contributes to the file. Keep your notes clear, factual, and formal, as if they were going to be submitted for evidence.
Define expectations. Send a note to the employee detailing the standards he's violating. "You were late on May 1, 12, 16, and 23. Getting to work on time is a critical part of your job." Have the employee acknowledge receiving the note. It will insulate you from my-word-against-your-word confrontations.
Keep current. Maintaining a personnel file for each employee is essential, but don't let evaluations accumulate year after year (unless they're going to be an issue). Imagine what might befall your company when you've written, "Tom is among the best employees we have" one year and you send Tom packing the next.
Don't waver. Mixed signals get a company in hot water. In a recent case, an older employee who wasn't performing was let go. A vice-president felt sorry for him and fabricated a positive reference for him to show to potential employers. Instead, the resentful employee showed the reference to the judge in a wrongful-termination suit he filed against the company.
Seek advice. Before taking a decisive step such as termination, have a lawyer look over the documentation.
Source: Joseph J. Ortego, a senior partner at Rivkin, Radler & Kremer, in Uniondale, N.Y.
DEFENSIVE FIRING
10 Tips to Trouble-Free Termination
1. Find a neutral location. Using a supervisor's office attaches a stigma.
2. Have two people present, one a neutral witness with whom the employee doesn't have a work relationship; that person is present only to listen.
3. Have a written termination notice to give the employee. It should review the disciplinary history and events leading to the termination and list procedures the employee should follow after the meeting.
4. Deliver the news and answer questions without engaging in an argument. Say what you need to say and nothing more.
5. No matter what the employee's response is, remain calm and in control of the conversation. Listen to what the employee has to say, but never get angry.
6. Make sure you've applied rules, policies, and penalties consistently and accurately. If you're firing for cause, have the relevant facts and explain how they violate company policy. Review your own practices to make sure this termination matches past practices for similar conduct.
7. Don't give career advice to someone you've just fired, but do offer assistance in finding a new job. That reduces the chance the employee will sue and mitigates claims of bad faith.
8. Avoid euphemisms like layoff, which could be taken to imply that the employee might be brought back later. Better: termination.
9. Write up an accurate record of the interview and give a copy to the terminated employee.
10. Avoid giving notice at the end of the workday, before a holiday, or just after the employee has returned from a business trip.
Source: Rightful Termination, by James Walsh (Merritt Publishing, Santa Monica, Calif., 1994)
PLAINTIFF TALK
Telltales That a Suer's Lawyer Likes to Find
A personnel file in which performance reviews are consistently good -- but the person has been terminated anyway.
A personnel file in which the reasons given for taking action are subjective and suggest that age, race, or disability is involved: "Mary was sick so frequently we couldn't give her a raise." "Tom needs to get 'fresher' ideas."
Personnel files that, after the fact of termination, are "papered." Suddenly, they're filled with memos written from memory and offered by management in defense of a discrimination suit. Juries see right through them.
Indications that a company is spending money to train new or younger workers but is seldom spending on older employees. Signs that a company is giving new or younger workers time off to attend seminars but is not providing a similar benefit for older workers.
Different working terms and conditions among employees possessing comparable skills.
Conflicting records of performance. A subordinate is told his project isn't good, is given a warning, and ultimately is terminated. The plaintiff looks at the superior's performance review and finds that the superior has been lauded for the project. Many businesses aren't aware that in federal court, any source of information that will in turn lead to relevant information can be used in discovery.
Source: Lonny H. Dolin of Dolin & Modica, in Rochester, N.Y.
Because of the legally sensitive nature of the real-life episodes related to Inc. by small-company owners and officers, the identities of businesses, persons, and locales and other particulars have been altered unless otherwise noted; the situations themselves and the quoted material remain authentic.
