How Employers Can Prevent Wrongful Dismissal Claims

by Shamila Ahmed

Employees may be dismissed for a wide variety of reasons.  However, employers are not permitted to terminate employment for discriminatory reasons.  The current state of the world has unfortunately led to the lay-off of millions of Americans, many of whom may allege they were wrongfully dismissed.  If you are an employer concerned about potential claims of wrongful dismissal, there are steps you can take within your company to minimize the likelihood of being subject to a wrongful dismissal lawsuit. 

Wrongful Dismissal Defined

Wrongful dismissal may occur when an employer terminates an employee for discriminatory reasons in violation of federal, state and/or local laws.  Employees are protected under federal law from being terminated on the basis of their race, color, national origin, sex, religion, disability, pregnancy or age (as long as the employee is at least 40 years old).  Wrongful dismissal may also occur when an employer terminates the employee in breach of a contractual agreement.  An employment contract may list explicit reasons for when termination is permitted, and anything outside of those reasons can be cause for a wrongful dismissal action.

At Will Employees

New York generally considers employment relationships to be “at-will.”  At-will employment means that an employer or employee can terminate the relationship at any time without reason or notice.  However, this does not mean that employers can bypass wrongful dismissal claims.  An at-will employee can still file a wrongful dismissal suit if he or she believes such dismissal was based on discrimination, sexual harassment, retaliation, violation of an employment contract or reporting illegal conduct of an employer.  

Some Relevant Statutes

The New York State Human Rights Law “NYSHRL” prohibits discrimination on the basis of “age, race, color, gender identity or expression, disability, pre-disposing genetic characteristics, familial status, domestic violence victim status, religion, sex, national origin, sexual orientation, military status and marital status.  Also, under the NYSHRL, there is no employee threshold and even an employer with only one employee is governed by this law.

The New York State Paid Family Leave Act provides employees with job-protected paid time off to care for sick loved ones, spend time with their new born children and even assisting a loved one when an immediate family member is deployed for active military service.  It is important as an employer to know and understand your responsibilities under this Act in order to prevent unknowingly violating one of its requirements.  The first thing an employer should do is make sure they obtain Paid Family Leave Insurance.  Next, the employer should post a notice of compliance stating that insurance has been obtained and informing employees of related information.  Finally, the employer should identify employees who do not meet the eligibility requirements so that a waiver can be submitted.  Employees do not meet the minimum requirements if they work less than 20 hours per week and will not work 175 days in a year, or if they regularly work 20 or more hours per week, but won’t be in employment for 26 consecutive weeks.

It is crucial for employers to handle Family Leave requests adequately to avoid a potential lawsuit.  As an employer, you are required to reinstate an employee when they return from their Paid Family Leave. The position you reinstate them in must be the same or a comparable position.  There must not be any retaliation or discrimination as a result of the employee taking this leave.  An employee must provide a 30-day advance notice of their intent to use the leave only if it is foreseeable.  If the circumstances are not foreseeable then the leave request must be made as soon as the employee becomes aware of the need. 

Develop the Right Policies

Competent Employee/Supervisor Training

In many instances, wrongful dismissal suits can be avoided by clear communication from the outset of an employer/employee relationship.  An employer should lay out easily understandable expectations at the start of the employment.  For example, identifying policies such as a three-strike rule (where employees will be terminated after three days of not showing up to work without any notice).  Setting clear expectations and boundaries also requires adequate training for supervisors.  Training supervisors and managers on how to effectively communicate with employees, and how to properly document employee performance or complaints, may decrease the likelihood of a lawsuit. 

Written Acknowledgements

As mentioned above, it is important that from an employee’s first day, the employee is informed of all the relevant workplace policies and protocols.  To ensure further employer protection, any and all protocol should be set forth in a writing signed by both the employer and employee.  Employer should not only keep a copy of the signed form in the employees file but also make sure the employee has a copy for themselves.  Documentation of any violations made by an employee is also crucial.  If any critique, discipline or feedback is given to an employee, it should be documented.  If a dismissal eventually results, there is evidence to help prove the termination was performance-based. 

Consistent Enforcement of Policies

Another important practice employers should follow is consistent enforcement of workplace policies amongst all employees.  It is worth reiterating the importance of documentation in this context.  If all terminations are properly documented, it becomes easier to prove equal and fair treatment.  If dismissal policies are followed consistently, it makes it less likely an employee will be able to prove improper dismissal or discriminatory motive. 

Provide Advance Warning and Assistance

You may wish to consider providing an employee with advance warning of dismissal, which gives the employee an opportunity to begin finding a new source of income.  If a former employee is working elsewhere upon termination, they may be less inclined to file a lawsuit.  In cases of dismissal due to no fault of the employee (such as downsizing or lack of available work), it is especially beneficial to find ways to help the former employee gain new employment.  Providing a reference or even putting the employee in touch with your network can go a long way in preventing potential legal action. 

Review

It is imperative when making a decision to dismiss someone it is made under careful review.  Seeking advisement from a Human Resources director or consultant in order to ensure the employee is dismissed for appropriate and necessary reasons is prudent.