Boxoffice-March.1988

KUUKAJVL: LA1:3UK AINU tlMrLU I MiiiN i
IN
THE THEATRE
Wednesday, February 24, 9:30 a.m.
By Richard J. Simmons
HISTORICALLY. EMPLOYERS HAVE enjoyed
enormous freedoms to discipline
or discharge employees as
they deemed appropriate, restricted only
by a handful of civil rights and public policy
statutes and, in some cases, selfcreated
contractual obligations. Within
the first three months after entering the
human resources field, however, those
with personnel responsibilities realize
that employer freedoms have become attenuated
as a result of the serious erosion
of the termmation-at-will doctrine. Indeed
the halls of our courts are witness to the
agony of those who have relied on their
ability to terminate at will and who have
thus failed to take necessary steps to
demonstrate that their personnel decisions
were both (1) motivated by legitimate
considerations, atid (2) administered
fairly and in good faith.
In the short space available, it is not
possible to provide a comprehensive examination
of the web of judicially-established
theories that have evolved to restrict
employer freedoms in this area.
Instead, this article has three objectives:
) to identify some of the shortcomings
( 1
of employer actions that have culminated
in significant liabilities in discharge cases,
(2) to address some of the measures that
employers can adopt to safeguard their
interests in connection with the administration
of disciplinary actions, and (3) to
identify some factors that courts have
recognized as enhancing employer arguments
that an employment-at-will standard
is still applicable. In each of these
areas, it must be stressed that the human
resources function will play an increasingly
important role in protecting employers
against enormous liabilities.
Hopefully, it will not take a multi-million
dollar lawsuit to attract management's
attention to the importance of this function.
The Nature Of The At-Will
Relationship And Its Erosion
Despite recent judicial pronouncements
and a large outpouring of employer
concern, employment relationships in
most states are—or are capable of becoming—
terminable at will. Recent court decisions
have simply recognized a number
of exceptions to the general circumstances
under which employers can safely
rely upon the application of the termination-at-will
doctrine.
Many state laws provide that an employment
relationship that is not for a
specified period of time is terminable at
the will of the employer or the employee.
Employers have historically construed
these laws to mean that they could fire
employees for a good or a bad reason, or
for no reason at all. It was necessary only
that the termination not transgress any
law, such as a civil rights statute, or violate
any public policy.
Illustrations of Problem Areas
There are many reasons why employers
have lost wrongful discharge
cases in recent years. There are, for
instance, obvious problem cases where
employers have asked employees to engage
in unlawful or unconscionable acts
and have terminated employees for refusing
to comply with their demands to do so.
These cases perhaps have the greatest
jury appeal. Other cases that have culminated
in employer liability involve far
more subtle violations or offenses of employee
rights. These cases are illustrated
by terminations that have resulted from
inappropriate or suspect motives of supervisors,
poor investigations, or actions
that simply do not make sense, such as
firing a long-tenn employee for mere suspicions
or discharging an employee for
violating a minor rule that other employees
have transgressed without repercussion.
Although each wrongful tennination
case is as unique as a fingerprint, there
are generic problems to many cases that
can often be averted. In the author's
experience, one of the principal causes
for wrongful termination cases is a cavalier
and almost wreckless attitude of employers
who feel that power and authority
are justifications for whatever actions
that they take. It therefore must be
stressed that the power and authority to
discipline or fire an employee bear absolutely
no relationship to an employer's
ability to justify such a decision to a
judge, administrative agency, or jury as
many as five years after it occurs. A second
glaring error is often committed by
employers who wish to comply with their
legal and moral obligations but who fail to
do what is necessary to demonstrate patience
and reasonableness when administering
discipline. It is not uncommon, for
example, for employers to hasten to terminate
an employee only to deal with the
problems engendered by the tennination
for years to come. By exercising patience
and the willingness to provide a long-term
employee a reasonable time to identify
and improve performance to an acceptable
level, where feasible, many employers
could avoid spending time in the
court room. Patience is truly a virtue in
the defense of wrongful termination
cases.
Another area of increasing dithculty
surfaces in connection with the manner
in which disciplinary actions are carried
out. This is illustrated in cases where
employers are justified in tenninating an
employee but administer the discharge in
an entirely unreasonable and inappropriate
manner. For instance, the ability to
fire an employee for legitimate reasons
does not create a right to humiliate or
defame the employee, to invade one's privacy,
or purposely to inflict emotional
distress.
Finally, employers sometimes lose
cases where they are right in their hearts
and actions, yet they are unable to
demonstrate that they acted in a fair and
reasonable manner due to the absence of
sound personnel practices, such as properly
designed and administered progressive
discipline, termination, and documentation
procedures. It is important to emphasize
that it is not mere documentation but
good documeritation that will assist employers
to win termination cases. It is
therefore incumbent on an employer's
human resources professionals to educate
and train supervisors. The fact that supervisors,
personnel officials, and other management
representatives may iac& personal
liability will provide a useful tool in
gaining everyone's attention.
Impetus For Wrongful
Discharge Cases
As an attorney, the author feels comfortable
in acknowledging that one factor
has predominated over all others in providing
the impetus for the increase in
wrongful termination cases. That factor is
the availability of a tort theory of recovery
and the employees' potential ability to
recover punitive and exemplary damages
against their former employers. The advent
of the punitive damage remedy in
the employment area has provided an
incentive for employees to pursue actions
against their former employers and for
attorneys to accept such cases on a contingency
fee basis. The willingness of
juries to play Monday-moming-c|uarterback
with employer decisions and to
award multi-million dollar judgements to
employees whose actual losses, if any, are
a tiny fraction of those awards has stin'ed
the wrongful termination fire even more.
Moreover, candor dictates that the author
disclose that employers are the only real
victims of the wrongful termination theory.
Attorneys representing employees and
employers both benefit from the theory,
as do employees themselves. In fact, it
can be argued that it is more lucrative to
be imemployed in California than to be
employed. In some cases, this is imdoubtedly
true. Nevertheless, the economic realities
and incentives in the area suggest
that a legislative soUilion m.iy be but a
distant goal.
(continued)
SW-16
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