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Labor Logic


John D. Finerty, Jr.

As employers are learning all too well, employment litigation is a steadily growing fact of life. Attorneys who practice in all fields can help human resource departments reduce employment claims exposure with a bit of preventative medicine on the front lines. The following are seven common errors that, if avoided, will make your clients less vulnerable to litigation.

1. Not Conducting a Rigorous Pre-Employment Screening Process.

Hiring a new employee is no different than investing money. An effective tool to research this type of an investment is the employment application. Watch out for large gaps in time that are not accounted for. Look closely at the applicant’s stated “reason for leaving” a prior job. If this question is left blank or is otherwise unclear, explore this in the interview. If an applicant writes “forced out” or “conflict with a supervisor,” chances are there is a story worth investigating.

Additionally, always conduct a thorough background and employment reference check. Granted, it takes time and effort to reach an applicant’s prior employers, but it is worth it. Even if a company will only provide you with its former employee’s dates of employment and salary, you may learn something from the person’s tone of voice. Better yet, the person may make a telling “off the record” comment.

2. Not being brutally honest in employee performance evaluations.

No one likes to be the bearer of bad news, but if an employee’s performance is lacking, it must be reflected in his or her performance evaluation. Few evidentiary issues are more difficult to deal with than an employee with poor performance who has glowing performance evaluations. Train your supervisors early and often to be brutally honest in their employees’ performance evaluations. Down the road, when it comes time to take corrective action, your hands won’t be tied by evaluations that don’t reflect the employee’s actual performance.

3. Cutting an employee a “break” and not taking disciplinary action.

Employers should take action if an employee is not meeting performance expectations. Ignoring the problem will not make it go away. If you address performance issues as they occur, one of two things will happen: (1) the employee will improve, or (2) the employee will not improve, but you will have laid a solid foundation for termination. When it comes time to terminate, you will have documented your efforts to improve the employee’s performance. In addition, if you don’t take action you will have set a precedent that may prevent you from taking disciplinary action against another employee for the same offense.

4. Giving a wage increase (no matter how small) to an undeserving employee.

Wage increases often imply acceptable job performance. Employers may find it easier to give raises across-the-board, even to employees whose performance is lacking. Rest assured, however, it will be used against your clients later. The employee will argue that his or her performance was stellar and will point to consistent wage increases to prove it.

5. Failing to use the “same actor” defense whenever possible.

If you are faced with terminating an employee that represents a litigation risk (i.e. in a protected class), have the same person who made the decision to hire the employee be the one who makes the decision to fire the employee. This is known as the “same actor” defense. There is an inference of non-discrimination when the individual who made the allegedly discriminatory decision is the same individual who hired the employee. Common sense tells us that if a supervisor had been biased against individuals over the age of 40, he wouldn’t have hired a 50 year old employee only to fire him a year later because he was 51.

6. Giving a terminated employee anything of value without getting a release of claims.

No good deed goes unpunished. Perhaps a client is considering a severance package, a letter of reference or an agreement not to contest unemployment to placate a terminated employee. A good faith gesture could be used by the employee’s attorney as evidence that the employee was not a poor performer. Never provide a terminated employee with benefits above and beyond that to which he or she is entitled without getting a full release of claims. You may be simply funding litigation against your clients.

7. Turning over personnel files without reviewing them first.

When you receive a personnel file request, do not immediately hand the records over. Recognize this request is often the employee’s first step toward commencing a lawsuit. In Wisconsin an employer can require an employee to put the request in writing, and the employer can take seven (7) business days to respond to it. Take this time to carefully review the file and remove documents that do not legally need to be produced. There are only certain categories of documents that an employee is entitled to review or receive copies of under Wisconsin law.

While these guidelines may not fully insulate your company from liability, they will go a long way to preventing employment litigation and minimizing potential liability.

For more information, please contact John D. Finerty, Jr. at jdfinerty@mbf-law.com or (414) 225-8269 or Mitchell W. Quick at mwquick@mbf-law.com or (414) 225-2755.

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