How to Ensure Rightful Terminations in California

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This is the first in a four-part series excerpted from the newly released California Employment Law: An Employer's Guide, Revised and Updated for 2018 (SHRM). Part 2 will discuss creating defensible severance agreements. 

Given all the wrongful termination lawsuits in California, employers are understandably leery of firing even the worst employee. They need not be, however. When a termination is properly set up in advance, following the steps below, the chances of avoiding a lawsuit are actually good. 

Be sure there is a written record of prior discipline. Sometimes employers are confused about the need for written documentation of misconduct or performance problems. Since an at-will employee may be terminated for any reason or no reason, why is documentation of a reason for termination necessary? 

Establishing an employee's at-will status is vital because it prevents claims for breach of an implied contract to terminate only for good cause, but that is all that it does. It does not protect an employer from claims of discrimination, retaliation or wrongful discharge in violation of public policy. In those cases, an employer must articulate a lawful, nondiscriminatory or nonretaliatory reason for termination. It is not sufficient merely to say that the employee was employed at will. Moreover, although the law books say that the plaintiff always has the burden of proof in a lawsuit, the practical reality is that most judges and juries expect the employer to prove that it had a good reason (or at least a lawful one) for terminating an employee, and in most cases that the employee received sufficient warnings prior to termination. 

What is sufficient warning depends on the type and seriousness of the offense. Several warnings are advisable for minor infractions such as tardiness or simple work errors. No prior warnings are required for serious misconduct such as stealing, workplace violence, failing a drug test, or sexual assault. Other misconduct that falls in the middle should be documented in one or more prior warnings. 

These warnings must be in writing because oral warnings can be difficult to prove in court. Every fired employee "forgets" about all the oral warnings that preceded the termination. Written documentation of an employee's misconduct or performance deficiencies can be essential toward refuting an unlawful motive for a termination. 

Review the personnel file. Always review the employee's personnel file prior to terminating an employee, especially when a termination for poor performance is involved. Was the employee's last performance evaluation a positive one? Did the employee recently receive a raise or a commendation for good performance? The presence of these items need not get in the way of a termination that must occur, but you should be prepared to explain why circumstances have changed so drastically that termination is now warranted. 

Document the termination decision when it is made. Sometimes it takes a while to effect a termination decision. It may take time to obtain approval of HR or higher management, or to gather all the persons who need to be present for the termination meeting. During that time facts can develop that could make the termination much more complicated. The employee could suffer a work-related injury, request a medical leave or complain of harassment. Therefore, if you cannot carry out the termination right away, at least document the fact that you have made the termination decision. Send an e-mail to HR or higher management notifying it that you have decided to fire the employee. If you plan to replace the person, start the process required to post the vacancy or recruit a replacement. This kind of documentation is incredibly helpful in court as it shows that you made the decision to terminate the employee before he or she filed a workers' compensation claim, requested leave or complained about harassment, thus refuting the claim that the termination decision was made in response to those events. In many cases courts will award summary judgment for the employer when this evidence is available. 

Put the real reason for the termination in writing. You should give the employee a letter or document stating the real reason for the termination. Never, ever, provide an untrue reason for a termination, such as calling a performance-related firing a "layoff." To do so will make it easy for a plaintiff's lawyer to argue that you discriminated against the employee, because California's jury instructions allow juries to find discrimination if the reason the employer gave for the termination was untrue. 

Sometimes employers think they are protecting themselves by listing a vague reason for the termination such as "didn't work out" or "at-will termination," or by not putting anything in writing at all. This is a mistake. Never hide from the real reason for a termination, no matter how unpleasant it might be to confront the employee with the truth. A good plaintiff's lawyer will pounce on your equivocation to make it appear that you had an illegal motive. Be clear about the reason for termination. Own it and be prepared to defend it. 

Do not give too many reasons for a termination. The more reasons you list for a termination, the less credible they all become. If you are terminating an employee for failing to meet productivity standards, leave it at that. Resist the temptation to "pile on." Do not also state that the employee was tardy, submitted late expense reports, wasted time on the Internet or other reasons. For one thing, it is almost certain that other employees also engaged in such trivial misconduct yet were not fired. More importantly, adding a lot of reasons makes it appear that you lack confidence in the primary reason for the termination. 

Please visit the SHRMStore to order your member-discounted copy of California Employment Law: A Guide for Employers, Revised and Updated for 2018 by James J. McDonald Jr. 

James J. McDonald Jr., J.D., SHRM-SCP, SPHR, is managing partner of the Irvine, Calif., office of the labor and employment law firm Fisher & Phillips LLP. His practice involves trials, arbitrations, and appeals of employment law claims. He also has more than 25 years of experience advising California employers about all aspects of labor and employment law, strategic human resource issues, and how to avoid employment claims and lawsuits. He received his undergraduate degree from New College of Florida and his law degree cum laude from Georgetown University.

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