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RHOADS & SINON LLP ATTORNEYS AT LAW
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Employment & Labor Law Group

TO: Clients, Friends and Colleagues of Rhoads & Sinon

FROM: David F. O’Leary

RE: Employment Law Note #8. Firing an Employee Under the Employment Discrimination Laws. Tell the Truth! (June 2004)

Periodically (no more than once a month), I write a brief essay on an employment law issue in which I am interested. I try to provide practical advice. Please do not hesitate to contact me if you have any questions or comments, or have a need for my services.

Firing an Employee Under the Employment Discrimination Laws– Tell the Truth!

When you are about to fire or layoff an employee, what do you say to the employee about the reason he or she is being fired or laid off? The simple and almost always correct answer is: the truth. Tell the employee the truth about why he or she is being fired, particularly the performance problems, misconduct, or incident that triggered the decision to terminate the employee. Omitting reasons, sugarcoating the reasons, dispensing outright falsehoods as a substitute for the real reasons – even with the best of intentions – can often come back to haunt an employer if the terminated employee files an employment discrimination lawsuit. A recent case illustrates the point.

A black female employee filed a race discrimination lawsuit alleging that she was denied a promotion to a job for which she had applied in favor of a less qualified white female applicant. The employer told the black female that the reason why she was not selected for the job was because she was less qualified than the white female. This explanation was false. The real reason, which the employer admitted after it was sued, was because the white female’s job was being eliminated, and to avoid laying off the white female, the employer promoted her to the vacant position.

At her deposition, the black female said she thought the employer should have hired the best qualified candidate for the vacant job. She alleged the employer was acting unfairly by allowing the white female’s prospective layoff to trump the black female’s better qualifications. Significantly, the black female admitted that she did not believe that her race made a difference in the employer’s decision.

Based on her admission that her race did not make a difference in the employer’s decision, the Court dismissed the lawsuit. There is a broad principle in employment discrimination cases that employers are free to employ non – discriminatory criteria that are “unfair” or even reprehensible, so long as they are not unlawfully discriminatory. Judge Frank Easterbrook from the 7 th Circuit Court of Appeals has said:

“A [n] employer may feel bound to offer explanations that are acceptable, such as that one employee is more skilled than another, or that “we were just following the rules.” The trier of fact may find, however, that some less seemly reason – personal or political favoritism, a grudge, random conduct, an error in the administration of neutral rules – actually accounts for the decision. Title VII [The employment discrimination statute that prohibits employers from discriminating against employees on the basis of race, color, sex, national origin, religion] does not compel every employer to have a good reason for its deeds; it is not a civil service statute. Unless the employer acted for a reason prohibited by the statute, the plaintiff loses.”

Private employers often mistakenly believe that they are obligated to have a “good” reason for terminating an employee, and will invent such “a good” but false reason, even if the true but “bad” reason is lawful and does not violate any employment discrimination law.

The problem with giving an employee a false or only partly true reason as an explanation for terminating the employee is that if the employee subsequently sues the employer for unlawful termination, the employer is obligated to state under oath why the employee was terminated. If the employer repeats the same half or whole untruths that it provided the employee, it is committing perjury and also generously providing the fired employee with an opportunity to attack the employer’s credibility and argue that an unlawful factor (race, age, sex, religion, etc.) made a difference in the decision. If the employer comes clean and states the real reason for terminating the employee, the employer’s credibility can still be attacked on the grounds that the employer told the employee one story, while telling the Court another.

In the case I described above, suppose the black female had not made the damaging admission that race was not a factor in the employer’s decision. Suppose she alleged that the employer’s hidden motive was to protect a white employee’s job because the employee was white and that race had made a difference in the employer’s decision and that the employer had lied to her about the real reason as a pretext to cover up race discrimination. The case may well have gone to trial at which a judge or a jury could find that the black female did not get the promotion because of her race.

CONCLUSION AND RECOMMENDATION: When you fire an employee, tell the employee the unvarnished truth about why you are firing the employee.