A three-part checklist for HR before terminating an employee

Bob was a solid, long-term employee. But at the company retreat, he stayed late at the bar, had a few too many drinks, and made a highly inappropriate pass at a member of the hotel staff. The hotel had enough and called you, his supervisor, to come get him. You dutifully complied and found Bob a room at a new hotel. The next morning Bob returned to the retreat, but it was clear he had stayed up all night drinking. He made several offensive comments to other employees before you could usher him back to his off-site hotel. On the way, Bob cried in your car and reported that he is an alcoholic and asked for information about your employee assistance program. The CEO was livid and wants Bob fired. What should you do?

Here is a three-part checklist for Human Resources when making a termination decision.

1. Why is Termination the Right or Perhaps the Only Option?

Before you fire someone, consider your options. Would a lesser penalty suffice? Good employees are hard to find, and replacing an employee is an expensive proposition in terms of recruiting, training and lost opportunity costs. So, if there is a reason to save Bob, you may want to consider a warning, suspension, or last chance agreement—a document Bob would sign agreeing to random testing and termination if he does it again.

On the other hand, Bob’s actions were highly public and if you keep him, you may set a precedent for bad behavior by another employee you really don’t want to save. Consistency is the tail that should not wag the dog, but if you are going to make an exception to your policies for any employee, you need to have a really good reason for doing so.

In this regard, it helps to know and make a record of the facts. Not all situations are as clear cut as Bob’s, so do a little investigation, talk to folks who know, and confront the bad actor with what you have learned. Give the soon-to-be-ex-employee a chance to explain his or her conduct and listen to what they say. This is not a time to rush to judgment (the jury won’t) so be sure you know exactly what happened and get both sides of the story.

Once you have all the facts, be sure you can articulate a clean and simple reason for the termination. In Bob’s case, it would run something like this: “We are ending Bob’s employment because he violated our drug and alcohol and our anti-harassment policies.” Done. Almost.

2. Consider the Risks

Contrary to popular belief, every employee in Arizona has an employment contract. [1] Absent some inconsistent promise, employment agreements are presumed to be “at-will,” meaning that either party can end the employment relationship at any time and for any lawful reason – or for no reason at all.

There are three broad exceptions to the “at-will” rule:

A. An Inconsistent Promise.

Some employees have a written contract that defines when and how it can be terminated. Such agreements are typically reserved for executive level employees – but you need to know if your employee has one. Promises can also be found in offer letters and employment policies. So, before you pull the trigger, make sure there is not a document that specifies how or when you can do so. I once had to defend an entire lawsuit solely because my client failed to give an employee a required written notice of termination. Be sure that your actions are consistent with your promises.

B. Discrimination.

In Arizona, you cannot fire someone because of their Race, Color, Religion, Sex, Age, National Origin, or Disability. Federal law protects additional characteristics including, Pregnancy, Veteran Status, Sexual Orientation and Genetic Information. These characteristics can play NO ROLE in your decision. And it isn’t just minorities who are protected – the law goes both ways; even a white male can sue if you fire him because he is a white male. These protected characteristics also don’t need to be the sole or only reason for your decision. It is enough for a plaintiff to show that a protected characteristic was “motivating factor” in your decision.

You can overcome a discrimination claim by showing that you had a legitimate business reason for the decision. So, in Bob’s case, you are NOT firing him because he is an alcoholic. Alcoholism is a protected disability. If you fire him, it can only be because he violated your policies.

Which brings us to the most difficult part of Bob’s case. The Americans with Disabilities Act or “ADA” requires that employers “accommodate” the known disabilities of their workers. Bob told you he was an alcoholic, and he asked for information about your EAP program. Under the ADA, you may have an obligation to at least engage in the “interactive process” with Bob to determine whether his after-the-fact request for help triggers an obligation to provide an accommodation. Generally, a disability does not excuse misconduct – particularly when that misconduct is fueled by alcohol, but a termination under these circumstances carries some risk, and may warrant a discussion with legal counsel.

C. Retaliation

Retaliation claims are the hardest claims to defend, and they can take many forms. They all begin with some sort of “protected activity” which is an action, complaint or request that is protected by law. For example, taking leave under Arizona’s Paid Sick Leave Statute is protected activity. Telling all your co-workers the size of your bonus is protected activity. So is posting negative comments on social media about the way our boss treats you. And if you fire someone for engaging in protected activity, you are handing them a retaliation claim.

There are so many ways to engage in protected activity that it is sometimes hard to recognize, but ask yourself this question: Has the about-to-be-fired employee taken leave, disclosed a medical condition, or complained recently? If so, call counsel and explore whether that leave, that disclosure, or that complaint is protected. If it is, you’ll need a really good reason to terminate.

3. Be Honest

The biggest mistake employers make is trying to be nice when they fire someone. If you tell an employee that she is not a good “fit” you may as well tell her you don’t like her because she is a woman. If you say, “it just isn’t working out” one might wonder if a recent complaint is to blame. If you give an employee inconsistent reasons for your decision, the law presumes that discrimination was a motivating factor. So don’t do it. Don’t be nice. Be honest. Tell the employee exactly why you are letting them go and consider doing it in writing.

Taking the time to write out the honest reasons for your decision will make you think carefully about those reasons and explain your decision in way that is clean, simple, and kind. For an extra measure of protection, review your letter with your favorite employment lawyer. Then, if your former employee considers suing, she will need to show your letter to her lawyer, and if your reasons make sense, that lawyer should decline the case. That is a trouble-free termination.

[1] A.R.S. § 23-1501(A)(1)

David T. Barton is an attorney in Fennemore’s Labor & Employment practice group. Barton focuses his practice on representing employers in matters involving discrimination, harassment, wrongful termination, and wage and hour disputes, offering strategic counsel on compliance, risk management, and litigation defense. He provides comprehensive representation to clients navigating complex employment and benefits-related legal issues. He can be reached at dbarton@fennemorelaw.com.