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Termination letters can come back to haunt employers

September 25th, 2014  |  Lorene Park

By Lorene D. Park, J.D.

Being fired is bad enough. What’s worse from the point of view of many courts? Worse is being told, in the termination letter, that you should find a less stressful job due to your heart condition. Or that your job functions were being transferred out of state, only to find out later that this was not the case. Or that the employer could not accommodate your schedule request even though your supervisor had previously approved it. In each of these real-life scenarios, the termination letters provided evidence that the employers engaged in unlawful discrimination or retaliation.

Get well now. For example, one employee, who was fired when his recovery from triple bypass heart surgery took “too long,” survived summary judgment on his claims of discrimination based on actual and perceived disability. The employer told its disability insurer it would accommodate the employee, who sent emails indicating his intent to return, but the employer then hired two replacements without physical limitations and sent the employee a termination letter that referred to his heart condition and the need for him to find a less stressful job. The federal district court in Louisiana found that the letter suggested that the employer regarded him as disabled and terminated him for that reason (Thomas v Hill).

Silence is not golden. Some attorneys might suggest that cases like this are a good reason to remain silent in the termination letter as to specific reasons for the discharge, but when it comes to questions of intent in discrimination and retaliation cases, silence is not golden. In one case, an employee who had threatened to sue the employer in the past was fired after violating a policy on computer use at work and after requesting an accommodation for his leg injury. The termination letter was silent as to the actual reason for his discharge, merely stating that the company was an at-will employer. To a federal district court in Arizona, this was inconsistent with termination letters the employer provided to other employees because their letters specified the reasons for their terminations. This was enough to raise a triable issue of fact on the employee’s disability discrimination claims (Maxwell v Verde Valley Ambulance Co, Inc).

In another case, a hospital defended its decision to fire an employee with severe depression and anxiety by citing years of “insubordinate and combative behavior,” but it never mentioned such conduct in her suspension memo or termination letter. A district court in Pennsylvania found a reasonable basis for concluding that her discharge, ostensibly for turning in a requested email an hour late, was pretext for discrimination, given that none of the incidents described by the employer were mentioned in the letter, the employee’s previous discipline did not list discharge as the next step, and she had good reviews (Franzi v UPMC Presbyterian Shadyside).

Given the importance of wording a termination letter just right and handling the termination process well, employers should take steps to avoid common pitfalls. Suggestions follow.

Verify the basis for discharge. Before writing the termination letter, review records, interview supervisors, or take other measures to confirm the factual basis for the discharge. For example, if an employee approved for FMLA leave was later fired for excessive absences, make sure none of the absences underlying the discharge were FMLA-qualifying. In another example, a termination letter stated that an accounts payable position was eliminated due to a new electronic record system, but other evidence suggested to a district court in Tennessee that the job was not actually eliminated by the time the employee would have returned from maternity leave, so she advanced her retaliatory discharge and FMLA interference claims (Hawkins v The Center for Spinal Surgery). In a case out of Minnesota, a federal court denied summary judgment on a race discrimination claim based in part on the fact that a termination letter stated the employer was unable to accommodate an employee’s scheduling request, even though her supervisor had previously approved it. The contradiction suggested pretext (Kennedy v Heritage of Edina, Inc).

Be consistent. Make sure the decision is consistent with any disciplinary policy. And even if there is no doubt that an employee violated a policy, ensure that the level of discipline is consistent with that imposed against others who engaged in similar conduct. For example, in an Ohio Court of Appeals case, an employee who was fired for sending sexually explicit emails in violation of an employer’s policy (according to the termination letter) could proceed to trial on his age discrimination claim because the company did not fire younger employees for substantially similar conduct (Bowditch v Mettler Toledo International, Inc).

Maintain a professional tone. The termination letter should be typed and should be professional and objective in tone. It should be dated and have a place for the employee’s signature.

Don’t mention protected characteristics. Do not mention health, age, sex, pregnancy, disability, or other protected characteristics in the termination letter or meeting. Also, avoid telling an employee to “look on the bright side.” For example, stating “This is a great time to retire anyway” could suggest that age was behind the discharge. Telling someone who took FMLA leave that “Now you can spend more time with your ailing wife” might suggest retaliation for that leave. And as mentioned with respect to the Thomas v Hill case, don’t suggest the employee would prefer a different job anyway due to his heart condition (or any disability).

Discuss the termination face-to-face. If possible, meet with the employee and deliver the letter to help avoid misunderstandings and address concerns that any individual might have upon being fired. The letter could provide a good outline for what should be discussed in the termination meeting, and following the letter could help the HR rep or other person conducting the meeting maintain a professional demeanor.

Write for a larger audience. You are delivering the letter to the employee – but how would the letter be read by the EEOC, a Facebook audience, or a jury? Provide enough background facts to keep things in context. If the employee was fired for violating a policy, or for failing to meet performance or behavioral standards, say so. Don’t leave it to a potential jury to fill in the blanks.

Be consistent after the fact. The reasons in the termination letter should also be the reasons provided if the decision is challenged later (perhaps in an EEOC charge). While it is okay to provide additional details on policy violations or other reasons outlined in a termination letter, avoid adding entirely new bases for the discharge that were not mentioned in the letter. Also, if you provide letters of recommendation, avoid saying anything that could contradict your stated reasons for terminating the employee. That could be used against you in court.

Avoid joint employer issues. Be mindful of the letterhead used. If an employee for company A was terminated on company B’s letterhead (or by company B’s HR personnel), that could suggest that both A and B exercised control over the termination decision and both could be liable as employers.  Also, don’t use the terms “we” or “us” when referring to the employer. This could also become the basis for arguments that related companies received proper notice of EEOC charges or were joint employers for purposes of liability. For example, a federal court in Illinois refused to dismiss Title VII claims against three entities that arguably received notice of EEOC charges served on a CEO, as evidenced by shared offices, equipment, and owners, as well as by the fact that the CEO responded to an EEOC charge by commenting on when the employee “came to us” and stating “we” have always been an equal opportunity employer. Such language could also be problematic in termination letters (Jowers v Village Green Apartments, LLC).

Explain the employee’s rights and responsibilities. If you offer a severance package, the letter should reference the package. State that all property of the employer should be returned and perhaps provide a separate checklist of items, such as cell phones, computers, or keys. The employee should also be reminded of other contractual obligations (e.g., noncompete or nondisclosure agreements). In addition, provide information on available benefits, including COBRA documentation as appropriate. In one recent case, a federal court in Nevada ordered an employer to pay the maximum statutory daily penalty where the employee received an attachment to her termination letter explaining COBRA but was never provided an election form and was merely told that it would be sent separately (Honey v Dignity Health).

Final thoughts. The importance of a properly worded termination letter cannot be stressed enough. Mainly, it can provide evidence of an employer’s legitimate reason for taking the action it did. But it can also provide a roadmap for both employer and employee — guiding the employer through the termination meeting and helping maintain a professional tone, while also providing the employee with information underlying the decision and information on the next steps he or she needs to take. The termination letter also serves to document the employment action and, if EEOC charges are subsequently filed, can provide a ready response to any ensuing inquiry. With that in mind, be sure to have the employee sign the termination letter to acknowledge receipt. As with any document as important as this, having an attorney review the termination letter before delivering it is a good idea.