First thing you should know is that there is no such thing as a safe termination. The loss of a job is near the top of the life-stress hierarchy, so if you have to let someone go, don't expect a thank-you card and a small gift. Termination often follows a period of discord between employer and employee. A fired employee will probably spend a few days brooding, then blast you on Facebook and call a lawyer.
Most employee claims are contingent fee cases, so an attorney has to be willing to invest time and money. A case that goes to trial can involve well over 200 hours of work. At $250-$400 an hour, that's a minimum of $50,000 to $80,000 worth of time, plus court reporter fees, expert witnesses and other expenses. Once a lawyer files a case, she can't withdraw without a judge's permission, so most lawyers try to get it right before they sign on.
Typically, the attorney's initial evaluation goes like this:
1. Was there a contract for employment, and was it breached?
2. Was the employee paid appropriately under Federal and state Labor laws?
3. Did the termination arise from discrimination, harassment, or retaliation?
4. Was there any other violation of employment law that could result in damages for this employee?
The best protection you have as an employer is to make sure the answer to all of those questions is “no,” or that the potential recovery is so small that it's not worth the attorney's time.
Contracts
California is an “at-will” state. Unless you and the employee agree otherwise, you or the employee can end the relationship without cause and without notice. Of course the exceptions would fill a book, but your first line of defense is an “integrated statement of at-will employment.” This is a written paragraph that basically explains that the employment is “at will” and this term can't be changed except in writing signed by employer and employee. Courts typically honor these agreements, unless the termination is illegal.
Wages
Wage Claims are the Daily Special for 2011, particularly class actions. There are hundreds of sections of the Labor Code and numerous federal rules that deal with how and when employees should be paid, how much time they get for lunch and breaks, how much time off they can have to vote, visit a child's school, testify in court, serve on a jury, even fight fires. It's complicated to figure out who is exempt from overtime and can legally be paid a salary. Make a mistake and it can cost you plenty, considering you can't prove the employee didn't work all those overtime hours. Plaintiffs can also collect stiff penalties on behalf of the state of California.
Wrongful Termination
The able-bodied white guy under 40 is still pretty much fair game, but everyone else has some kind of protected status under Title VII, the ADA, the ADEA, or the Fair Employment & Housing Act. Employees are protected if they threaten to complain about violations of the law, if they hold political beliefs, or if they exercise legal rights. If you have five or more employees (and sometimes when you don't) you can be accused of using the wrong reason to fire someone.
But you can still fire someone for not performing or violating reasonable rules. Always verify and document the reasons leading to termination, as though the Supreme Court of California were looking over your shoulder, because they might be. If you can afford Employment Practices Insurance, buy it. You'll need it sooner or later.
Other Violations
How can an employer keep up with all of the laws affecting the workplace? Hard to do, even if you have a full time HR department. But try to keep abreast of the hot-button issues, seek out trusted information sources, and consult with a lawyer when you need to. Most often it's cheaper to buy preventive advice than to defend a lawsuit.
Lou Storrow can be reached at [email protected].
Most employee claims are contingent fee cases, so an attorney has to be willing to invest time and money. A case that goes to trial can involve well over 200 hours of work. At $250-$400 an hour, that's a minimum of $50,000 to $80,000 worth of time, plus court reporter fees, expert witnesses and other expenses. Once a lawyer files a case, she can't withdraw without a judge's permission, so most lawyers try to get it right before they sign on.
Typically, the attorney's initial evaluation goes like this:
1. Was there a contract for employment, and was it breached?
2. Was the employee paid appropriately under Federal and state Labor laws?
3. Did the termination arise from discrimination, harassment, or retaliation?
4. Was there any other violation of employment law that could result in damages for this employee?
The best protection you have as an employer is to make sure the answer to all of those questions is “no,” or that the potential recovery is so small that it's not worth the attorney's time.
Contracts
California is an “at-will” state. Unless you and the employee agree otherwise, you or the employee can end the relationship without cause and without notice. Of course the exceptions would fill a book, but your first line of defense is an “integrated statement of at-will employment.” This is a written paragraph that basically explains that the employment is “at will” and this term can't be changed except in writing signed by employer and employee. Courts typically honor these agreements, unless the termination is illegal.
Wages
Wage Claims are the Daily Special for 2011, particularly class actions. There are hundreds of sections of the Labor Code and numerous federal rules that deal with how and when employees should be paid, how much time they get for lunch and breaks, how much time off they can have to vote, visit a child's school, testify in court, serve on a jury, even fight fires. It's complicated to figure out who is exempt from overtime and can legally be paid a salary. Make a mistake and it can cost you plenty, considering you can't prove the employee didn't work all those overtime hours. Plaintiffs can also collect stiff penalties on behalf of the state of California.
Wrongful Termination
The able-bodied white guy under 40 is still pretty much fair game, but everyone else has some kind of protected status under Title VII, the ADA, the ADEA, or the Fair Employment & Housing Act. Employees are protected if they threaten to complain about violations of the law, if they hold political beliefs, or if they exercise legal rights. If you have five or more employees (and sometimes when you don't) you can be accused of using the wrong reason to fire someone.
But you can still fire someone for not performing or violating reasonable rules. Always verify and document the reasons leading to termination, as though the Supreme Court of California were looking over your shoulder, because they might be. If you can afford Employment Practices Insurance, buy it. You'll need it sooner or later.
Other Violations
How can an employer keep up with all of the laws affecting the workplace? Hard to do, even if you have a full time HR department. But try to keep abreast of the hot-button issues, seek out trusted information sources, and consult with a lawyer when you need to. Most often it's cheaper to buy preventive advice than to defend a lawsuit.
Lou Storrow can be reached at [email protected].