Costliest Termination Mistakes and How to Avoid Them: Leaves, Workers Compensation, Disabilities and More

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1 Costliest Termination Mistakes and How to Avoid Them: Leaves, Workers Compensation, Disabilities and More Michael W. Garrison, Jr. O Melveny & Myers LLP Harold M. Brody Proskauer Rose LLP 0

2 Preliminary Considerations Benefits of Proactively Managing Employee Performance Increased Productivity Positive Morale Employee Loyalty Employee Retention Less Litigation 1

3 Effective Performance Reviews Document, document, document Helps avoid discrimination or other employment based claims Having a record of honest, accurate assessments is critical Helps demonstrate employer acted fairly in decision Helps Company treat all employees consistently and avoids appearance of disparate treatment Helps Company defend litigation 2

4 Progressive Discipline Provide early notice of an employee s problems. Be decisive when an employee fails to respond or improve. Stay consistent during discipline meetings. 3

5 Other Considerations FAIRNESS Why Care About Fairness? Employees who feel they have been treated fairly are less likely to sue. A good record of fairness will discourage plaintiffs lawyers from commencing litigation. Juries will make decisions more on their sense of fairness than under any particular legal direction they receive from a judge. 4

6 Termination Before terminating any employee, an independent reviewer should review the decision before the termination is executed. Reviewer should: 1. Know the law; 2. Know employer s personnel policies and procedures; 3. Know employer s past practices; and 4. Be objective and preferably unfamiliar with the personalities. 5

7 Additional Factors to Consider Termination Is there an employment contract in place? Is the employee in a protected class (e.g., based on age, gender, race/ethnicity, national origin, religion, marital status, sexual preference, some medical conditions, disability, pregnancy, or leave status)? Has an adequate investigation into the grounds for termination been conducted? No rush to judgment Are those grounds objectively provable? Have similarly situated employees been treated similarly? Are there any hidden or pretextual reasons (e.g., whistleblowing activity or attendance problems excused by law)? Has there been proper documentation? 6

8 Red Flags Termination There may be indicators which suggest improper motives or potential liability in the discipline process or termination of an employee: Certain types of attendance problems excused by law (e.g., FMLA, Workers Compensation) Complaints (Whistleblowing, Discrimination, Harassment) Decisions made in the heat of the moment Decisions made by a new supervisor who views employee less favorably than prior supervisor 7

9 Termination What Does It Mean for a Leave to Be Protected? Employer may not interfere with employee s lawful right to take leave. Caution Do not make remarks suggesting you are unhappy that the employee is taking the time off. Employer may not take adverse action against the employee for taking protected leave. Caution Be aware of perceptions. Employer may not count protected leave against its attendance policy. Caution Scrutinize disciplinary notices and performance reviews. 8

10 Termination Disabled Employees Have Rights Under Several Federal and State Laws Family & Medical Leave Act ( FMLA ) California Family Rights Act ( CFRA ) Workers Compensation Americans with Disabilities Act ( ADA ) Fair Employment and Housing Act ( FEHA ) 9

11 Workers Compensation Workers Compensation Leave Eligible for employees with work-related illness or injuries Length of leave is for the length of the illness or injury Employer cannot discharge or change the employee s status while on leave unless: Justified by business necessities ; or Employee is permanently disabled Leave is unpaid, but employee can claim workers compensation insurance benefits Leave may run concurrently with FMLA and CFRA leave Prohibits retaliation against employees for filing workplace injury claims and/or receiving benefits 10

12 Workers Compensation Workers Compensation Leave Anti-Discrimination Law: Labor Code 132a It is the declared policy of this state that there should not be discrimination against workers who are injured in the course and scope of their employment. Requires only that an employer refrain from treating injured employees differently, making them suffer disadvantages not visited on other employees because the employee was injured or had made a claim. Thus, employers who apply uniform policies to industrially injured and non-industrially injured employees will not typically be found to violate section 132a. Contrast Judson Steel and views of applicants counsel 11

13 Disabilities Americans With Disabilities Act ( ADA ) California Fair Employment and Housing Act ( FEHA ) Must reasonably accommodate disabilities unless undue hardship No cap on length of leave Leave beyond that provided by other statutes Must participate in the interactive process Right to return to same position 12

14 FMLA (federal); CFRA (Cal.) Termination 12 months, 1250 hours Serious Health Condition of Employee or Family Member Armed Forces - Family Member Leave (FMLA only) Birth of a Child (baby bonding) 12 Weeks of Leave FMLA - Pregnancy included CFRA - Pregnancy excluded Right to return to same or comparable position Key Employee Exception Benefits Requirements 13

15 Interactive Process Discussions between an employer and a qualified disabled employee regarding the individual's limitations and possible reasonable accommodations 14

16 Interactive Process Be direct Ask the employee what accommodation she wants Give employee opportunity to get back to you Encourage her to give you information Document conversation 15

17 Reasonable Accommodation Reasonable Accommodation May Include: Unpaid leave of definite duration Making existing facilities accessible Job restructuring Part-time or modified work schedules Reassignment to a vacant position Affirmative duty to tell disabled employee about other suitable jobs May honor collectively-bargained seniority system Acquisition or modification of equipment or devices Adjustment or modification of examinations, training materials or policies Provision of qualified readers or interpreters 16

18 Reasonable Accommodation What is a reasonable amount of time needed for the leave? There is no set amount of time off for leave that is reasonable. No requirement to provide indefinite leave Employers must try and accommodate the employees request for leave for as long as possible. Factors to consider when determining whether or not to grant additional leave time: Employer s size Business operations & efficiency Compelling reason why the employee s request for additional time off to extend the leave should not be granted this time (e.g., undue hardship on employer) 17

19 Failure Timely to Return from Leave When An Employee Fails To Return To Work Following A Leave Three Letters in 30 Days It is good practice to send the employee written letters notifying him/her that he/she has missed the return to work date. Give the employee an opportunity to respond to the letters. If there is no response, terminate. Letter 1 st Letter 2 nd Letter 3 rd Letter Employee Response Time 14 days upon receipt of letter 2 days upon receipt of letter 2 days upon receipt of letter 18

20 Questions and Answers