An Ounce of Prevention

Disagreements between management and labor are sometimes unusual enough to make headlines. Workers sued a Michigan company that fired workers for using nicotine on their own time. Wal-Mart is defending itself against a gender-bias lawsuit and caught flak last fall for a memo suggesting ways to weed out “unhealthy” workers. Clothing retailer Abercrombie & Fitch settled a class-action lawsuit in 2004 after being accused of hiring only white, good-looking salespeople. But these cases may not give a clear sense of the most common legal issues facing employers.

According to local employment-law attorneys, Minnesota firms are rarely involved in media-ready disputes. Instead, labor and management face off over such quotidian issues as terminations, Social Security no-match letters, medical absences, non-compete agreements, and harassment. Learning more about these areas can help a boss stay out of court and on the right side of the law.

Employers often blame the workers who complain instead of taking steps to end the harassment. Stopping the harasser is usually the least expensive course a company can take.

Terminations Without Trouble

Too much “Minnesota nice” is the most common cause of termination lawsuits, says Charles Roach, a partner at Minneapolis law firm Rider Bennett, LLP. Employers who offer vague platitudes instead of performance-based reasons for letting someone go give that employee room to manufacture a discrimination claim, he says.

“Employers don’t do themselves any favors by trying to sugarcoat what they’re doing to an employee,” agrees Andrew Tanick, also a Rider Bennett partner. “They say, ‘We’re letting you go because things just aren’t working out,’ and then the person sues for age discrimination. Then the employer says that they fired the worker because he was late a lot, didn’t finish three projects, and sexually harassed his secretary. The employee says, ‘That’s not what you told me when you let me go,’ and the employer responds, ‘I didn’t want to hurt your feelings by telling you what a lousy employee you were.’”

It’s possible to be both kind and clear, both attorneys say. Keep a record of performance problems and warnings. If you do fire someone, be honest. At the same time, though, “you can go a long way toward avoiding disruptive and costly legal claims if you send the person on his or her way with a reasonable chance to maintain some dignity,” says Howard Tarkow, a partner with Maslon Edelman Borman & Brand, LLP, a Minneapolis law firm.

There’s a great deal of dignity in severance benefits, Tarkow notes. You can tailor the package to the employee’s needs, which might include money for lost wages or health, dental, or life insurance. You might promise not to contest unemployment benefits, or to pay for outplacement counseling. “For a relatively modest amount of money, you can give the employee a huge benefit,” Tarkow says. A letter of recommendation is a nice extra, if circumstances warrant. “Think about whether you can say something that would help the person get a job,” he advises.

In return for benefits, you might ask a worker to reaffirm a non-compete agreement and sign a release waiving all legal rights and promising not to sue. Releases must comply with state and federal law, so a lawyer or human resources professional should draft them. Or you may decide that the risk of a lawsuit is small, making a release unnecessary. If you’re offering a small settlement, you might not go to the trouble of putting together a waiver, Tarkow says.