Over the last two weeks, over 12 million Americans have filed claims for unemployment benefits according to the U.S. Department of Labor. These historic numbers reflect that thousands of business owners, executives, and managers are faced with difficult decisions to close down their operations, or lay off their employees. Businesses should be careful to give thoughtful consideration to the decision-making process, and ensure the economic hardship and time sensitivity of these issues do not result in decisions that can be easily challenged in wrongful termination lawsuits. Over the next twelve months, we anticipate a significant spike in wrongful termination lawsuits. These lawsuits will allege that particular employees were laid off because of their age, disability, gender, race, national origin, or other protected class. Here are three steps for minimizing your risk of a future wrongful termination claim.
- Check for agreements and policies – Many businesses require employees sign to contracts or acknowledge receipt of handbooks that detail policies regarding their employment, including termination. Some businesses do not carefully consult these documents before decisions are made. Be sure to check to see if these documents require a particular procedure, such as a certain number of days’ notice to the employee before the termination becomes effective.
- Document the decision – While COVID-19 and the resulting economic downturn require swift action, it is critical to document the decision to furlough or terminate a specific employee. Why was this employee chosen over others? What factors were considered in making the decision? Who made the decision? If this is not clearly documented, it creates ambiguity that an employee could take advantage of in a lawsuit claiming discrimination or unlawful termination. Businesses should also use this opportunity to ensure that any performance or disciplinary problems are in writing, so that the basis of any future employment decisions are clearly documented.
- Treat Similar Employees Exactly the Same – Employees in the same position with the same performance and disciplinary history should be treated the same. If similar employees are treated differently (or for reasons that are not well documented such as past attitude problems), employees could challenge the decision and allege they were selected for termination because of their protected class.
In short, business owners and decision-makers should be careful that hard decisions based on COVID-19 and the economic downturn do not unintentionally create legal claims down the road. Following the above best practices, and consulting with an employment attorney, will minimize the risks of these claims.
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This publication is for general information only. It is not legal advice, and legal counsel should be contacted before any action is taken that might be influenced by this publication.
Gunster, Florida’s law firm for business, provides full-service legal counsel to leading organizations and individuals from its 11 offices statewide. Established in 1925, the firm has expanded, diversified and evolved, but always with a singular focus: Florida and its clients’ stake in it. A magnet for business-savvy attorneys who embrace collaboration for the greatest advantage of clients, Gunster’s growth has not been at the expense of personalized service but because of it. The firm serves clients from its offices in Boca Raton, Fort Lauderdale, Jacksonville, Miami, Orlando, Palm Beach, Stuart, Tallahassee, Tampa, Vero Beach, and its headquarters in West Palm Beach. With over 200 attorneys and 200 committed support staff, Gunster is ranked among the National Law Journal’s list of the 500 largest law firms and has been recognized as one of the Top 100 Diverse Law Firms by Law360. More information about its practice areas, offices and insider’s view newsletters is available at www.gunster.com.