The Fifth Circuit Refuses to Extend Title VII to Sexual Orientation or Transgender Status

downloadOver the past two years, the Second, Sixth, and Seventh Circuits have construed Title VII of the Civil Rights Act of 1964 to prohibit employers from discriminating on the basis of either sexual orientation or transgender status.

Last year, the U.S. District Court for the Southern District of Texas, when confronted with the issue, referenced the other circuits and ruled that it assumed that an employee’s “status as a transgender woman place[d] here under the protections of Title VII.”  See Wittmer v. Phillips 66 Co., 304 F. Supp. 3d 627, 634 (S.D. Tex. 2018). This past week, the Fifth Circuit Court of Appeals affirmed the district’s grant of summary judgment against the transgender employee, but clarified that in the Fifth Circuit (which covers Texas, Louisiana and Mississippi), Title VII affords no protections against discrimination by employers on the basis of transgender status or sexual orientation.

Specifically, the Fifth Circuit invoked its own opinion from 1979 stating that it remains the binding  precedent in this circuit.  See Blum v. Gulf Oil Corp., 97 F.2d 936 (5th Cir. 1979) (holding that Title VII does not prohibit discrimination on the basis of sexual orientation).  Furthermore, despite the amicus briefs from the EEOC and the National Center for Lesbian Rights asking the Fifth Circuit to hold that Title VII prohibits discrimination on the basis of transgender status, the court of appeals did not grant their request.

The Fifth Circuit affirmed the grant of summary judgment for Phillips 66 because the employee failed to present sufficient evidence to support a prima facie case of discrimination, and because the employee failed to present a genuine issue of material fact concerning pretext.  The evidence in this cased showed that Wittmer conditional job offer was revoked because the background check showed that she had been terminated by her previous employer, which contradicted her representations to Phillips 66 during her job interview.

BOTTOM LINE: The question of whether Title VII of the 1964 Civil Rights Act covers LGBTQ employees continues to percolate in the courts, and at least three petitions involving this issue are pending in the U.S. Supreme Court.  While the law in this area continues to develop, it may be wise for companies confronted with this issue to take a cue from Phillips 66, which sidestepped the issue of transgender protections under Title VII and instead focused on the lack of evidence that the employee experienced any discrimination in its job application process and that the company had a legitimate non-discriminatory reason to revoke the job offer.

Leiza Dolghih is a partner at Lewis Brisbois Bisgaard & Smith LLP in Dallas, Texas and a Co-Chair of the firm’s Trade Secrets and Non-Compete Disputes national practice.  Her practice includes commercial, intellectual property and employment litigation.  You can contact her directly at Leiza.Dolghih@LewisBrisbois.com or (214) 722-7108.

The Rise in Trade Secrets and Restrictive Covenants Litigation – Live Presentation

screenshot_20190107-093330_instagram-01I will be presenting with Stanley Santire of Santire Law Firm on the The Rise in Trade Secrets and Restrictive Covenants Litigation on January 17th at 2:30 p.m. at the Texas Bar Advanced Employment Law Course in Dallas, Texas.  You can get a copy of our paper by registering to attend the event (registration link here).

This is a fantastic course for employment lawyers in Texas, which offers 15 hours of CLE credit over two days.

Additional presentations will include:

  • State Law Update
  • Anti-Slapp Update
  • Conducting Effective Investigations
  • What Is it Worth? How We Value Employment Cases 
  • Proving Up Attorney’s Fees
  • Structuring Settlement Agreements
  • Practical Applications and Q&A
  • Best Practices in Summary Judgment
  • Defining Harassment: Has it Really Changed in the #metoo Era
  • Effective Training: You Need More Than a Video
  • The Evolving Landscape of LGBTQ Protections
  • FMLA and FLSA Updates 
  • Social Media Evidence and Ethics 

Leiza Dolghih is a partner at Lewis Brisbois Bisgaard & Smith LLP in Dallas, Texas and a Co-Chair of the firm’s Trade Secrets and Non-Compete Disputes national practice.  Her practice includes commercial, intellectual property and employment litigation.  You can contact her directly at Leiza.Dolghih@LewisBrisbois.com or (214) 722-7108.

Employers Are Responsible for Stopping Sexual Harassment by Non-Employees

imagesIn the wake of the #MeToo movement, many employers remain unaware that they must investigate sexual harassment allegations and take appropriate measures if sexual harassment is perpetrated by non-employees, such as customers  or vendors.

A recent opinion from the Fifth Circuit Court of Appeals addressed just this issue when the court considered whether a nurse at a nursing home facility who repeatedly complained of sexual harassment by a patient with dementia presented a strong enough claim to go to trial.  The Fifth Circuit found that she did. And although Gardner v. CLC of Pascagoula, L.L.C. involved a rather common and pervasive problem of patient-nurse sexual harassment, the Court’s analysis is usefull for all companies where employees have interaction with customers or third parties on a regular basis.

The Court of Appeals reminded that pursuant to the Regulation issued by the Equal Employment Opportunity Commission (EEOC): 

An employer may [] be responsible for the acts of non-employees, with respect to sexual harassment of employees in the workplace, where the employer (or its agents or supervisory employees) knows or should have known of the conduct and fails to take immediate and appropriate corrective action. In reviewing these cases the Commission will consider the extent of the employer’s control and any other legal responsibility which the employer may have with respect to the conduct of such non-employees. 29 C.F.R. 1604.11(e)

In Gardner, the patient who suffered from a host of mental disorders, had a documented history of grabbing the female nurses’ “breasts, butts, thighs, and trying to grab their private areas,” and asking them to engage in sexual activity with him as well as making lewd sexual comments.  Several nurses routinely recorded this behavior on the patient’s chart and made complaints to their supervisors. Additionally, at least one of the supervisors observed the patient behaving in a sexually inappropriate manner.  

When the plaintiff-nurse attempted to discuss her concerns about the patient’s behavior, her supervisor and the nursing facility administrators allegedly laughed and told her to “put [her] big girl patients on and go back to work.”  Eventually, after the patient punched her in the breast while she was trying to assist him, she asked to be reassigned.  Her request was denied.  The patient was soon transferred to an all-male facility but only after he had punched a male resident. 

The district court granted the employer’s summary judgment finding that a hostile work environment did not exist because it was “not clear to the court that the harassing comments and attempts to grope and hit [were] beyond what a person in the [nurse’s] position should [have] expect[ed] of patients in a nursing home.”  

The Court of Appeals disagreed, however, ruling that while inappropriate comments from patients with reduced cognitive abilities may not rise to the level of legally-actionable sexual harassment, where a patient crosses the line into physical contact, which progresses from occasional inappropriate touching or minor slapping to persistent sexual harassment or violence with the risk of significant physical harm, the employer must take steps to try to protect an employee. 

BOTTOM LINE: If a company becomes aware that its employees are being harassed by a third party, such a customer or vendor, the company has an obligation to take steps immediately to get the harassment to stop. This may include reassignment of the employee, adding security, conversations with a customer or a vendor, and a host of other measures.  Ignoring the situation once the employer becomes aware of it may result in a liability under Title VII. 

Leiza Dolghih is a partner at Lewis Brisbois Bisgaard & Smith LLP in Dallas, Texas and a Co-Chair of the firm’s Trade Secrets and Non-Compete Disputes national practice Her practice includes commercial, intellectual property and employment litigation.  You can contact her directly at Leiza.Dolghih@LewisBrisbois.com or (214) 722-7108 or fill out the form below.

 

 

 

 

 

 

 

Texas Supreme Court Clarifies When Employers are Responsible for Employees’ Negligence

U5drUHKezGhrZZC7zuRZG27Dz7miJyK_1680x8400When are employers liable for negligence of their employees? For example, when an employee is driving a company vehicle and gets in a car accident, when can his/her employer be held liable for the injuries caused by the employee? The legal standard – vicarious liability – has been around for a long time, but last week the Texas Supreme Court added a much-needed clarity to it. 

In Texas, before an employer can be held liable for its employees’ negligence, the following two questions must be answered:

  1. At the time of the negligent act, was the worker an employee (as opposed to an independent contractor) of the employer?
  2. At the time of the negligent act, was the worker acting in the course and scope of his or her employment?

If the answer to both of these questions is “yes,” then the employer can be held liable for that employee’s negligent conduct.   

The “Control” QuestionThe answer to the first question depends on whether an employer has the right to control the details and progress of the worker’s job. The Supreme Court clarified that the “control” question is not evaluated on a task-by-task basis, but is a question of general control over the worker.  If an employer does not dispute that a particular worker is its employee, then the question of control becomes irrelevant and the party seeking vicarious liability can skip to the second question in the analysis. 

In Painter, et al. v. Amerimex Drilling, I., Ltd., the employer conceded that the driller that got into a car accident injuring several people was an employee.  Nevertheless, it argued that because it exercised no control over the details of the driller’s driving at the time of the accident, i.e., the particular task during which the incident occurred, it could not be vicariously liable.  The Texas Supreme Court rejected this argument and stated that once the employer-employee relationship was established, the only remaining question was whether at the at the time of the accident the driller was acting in the scope and course of his employment. 

The “Scope and Course of Employment” Question This question seeks to determine whether an employee committed a negligent act while performing his duties for the employer or while he was doing something unrelated.  A classic law school example would be a driver, who is still “on the clock” taking a detour to run a personal errand and getting into an accident while doing so.  In that situation, his employer would not be vicariously liable because the employee was acting outside the course and scope of the employment. 

In Painter, et al., the driller got into a car accident while he was driving the drilling crew from the drilling site to the campsite provided by the employer. Normally, driving to and from work would not be considered to be within the course and scope of employment.  However, in this case, the driller received $50 bonus from his employer for driving the crew between the drilling site and the campsite, the employer was contractually required to pay such a bonus, and there was evidence that the driller was providing the driving services as part of his assigned job duties.  Therefore, when the driller got into an accident while driving the drilling crew from the drill site to their campsite, the Court concluded that he could have been acting within the course and scope of his employment and the employer was not entitled to a summary judgment on this issue.* 

BOTTOM LINE: Texas employers can be held liable for their employees’ negligence as long as the negligent act occurred when the employee was performing his or her duties for the employer.  Where the employer-employee relationship is not disputed, the only question that stands between the employer and the vicarious liability for employee’s actions is whether, at the time of the accident, the employee acted within the course and scope of his employment or whether he deviated from his/her duties.  

Therefore, Texas employers must carefully consider how they structure employment relationships, contractual obligations and risk-shifting provisions, and how they describe and define employees’ duties.  In facing the question of vicarious liability in litigation, employers should carefully analyze the situation using the Painter framework. 

*Justices Green and Brown penned a dissenting opinion arguing that the proper standard for “control” analysis in vicarious liability cases should be on a task-by-task basis. 

Leiza Dolghih is a partner at Lewis Brisbois Bisgaard & Smith LLP in Dallas, Texas and a Co-Chair of the firm’s Trade Secrets and Non-Compete Disputes national practice Her practice includes commercial, intellectual property and employment litigation.  You can contact her directly at Leiza.Dolghih@LewisBrisbois.com or (214) 722-7108 or fill out the form below.

 

Is Staring at a Coworker / Former Lover During Work Meetings Sexual Harassment? Texas Court says “No”

rosesJust in time for the Valentine’s Day, a recent case involving a workplace romance turning sour provides a good refresher on what constitutes sexual harassment in the eyes of the law (in Texas) and demonstrates how an employer should handle sexual harassment complaints properly.

In Vanderhurst v. Statoil, a senior employee had a six-month extra-marital affair with a co-worker whom he was supposed to mentor. He claimed that after he ended the affair, the woman threatened to physically harm him and his wife and to accuse him of sexual misconduct, so he reported her to the HR. The HR department: (1) told him and the female to act professionally and stay away from each other; and (2) moved the woman to the other side of the floor about 200 feet away and placed her on a different team.  From that point on, the two employees never worked with each other again, and the woman never threatened, touched, or spoke to the male employee.

Nevertheless, the male employee perceived that he was continued to be harassed because (1) the female employee walked past his work station multiple times a day and (2) stared at him during group work meetings.  He complained to the HR again, but shortly thereafter left the company for a competitor.  He then sued his former employer under the Texas Commission on Human Rights Act for retaliation, hostile work environment and constructive discharge.

Hostile Work Environment Due to Sexual Harassment – What is the Standard?

Under Texas law, a hostile work environment claim entails ongoing harassment, based on the plaintiff’s protected characteristic (e.g., in this case, gender), so sufficiently severe or pervasive that it has altered the conditions of employment and created an abusive working environment. Thus, the elements of a prima facie case of hostile work environment are:

(1) the employee belongs to a protected group

(2) the employee was subjected to unwelcome harassment

(3) the harassment complained of was based on the protected characteristic

(4) the harassment complained of affected a term, condition, or privilege of employment; and

(5) the employer knew or should have known of the harassment in question and failed to take prompt remedial action.

To satisfy the fourth element of a hostile environment claim, a plaintiff must show that the workplace was permeated with discriminatory intimidation, ridicule, and insult sufficiently severe or pervasive to create a hostile or abusive working environment.  The plaintiff’s “work environment must be both objectively and subjectively offensive . . ..” That is, it must be “one that a reasonable person would find hostile or abusive AND one that the victim perceived to be so.”

In Vanderhurst, the Court of Appeals clarified that when courts consider hostile-work-environment claims, they look at “the totality of the circumstances,” including:

(1) the frequency of the discriminatory conduct;

(2) its severity;

(3) whether the conduct was physically threatening or humiliating, or a mere offensive utterance; and

(4) whether it unreasonably interfered with the employee’s work performance.

What did the Court of Appeals Rule in this Case?

Considering the totality of the circumstances, we hold that there is no evidence that plaintiff’s work environment was objectively offensiveone that a reasonable person would find hostile or abusive.”  Basically, it agreed with the trial court that “the conduct described by Vanderhurst may have been annoying, but it [did] not constitute an objectively offensive work environment sufficient to support a hostile-work-environment claim.”

BOTTOM LINE:  There is a difference between workplace behavior that a reasonable person would find annoying or awkward and the behavior that crosses into sexual harassment.  Sometimes, the line is rather clear – as it was in this case – and a lot of times, it is not.  For companies to avoid lawsuits related to sexual harassment it is important to: (1) provide quality sexual harassment training; (2) make sure employees know how and where to report any complaints; (3) investigate all complaints of sexual harassment; (4) take an appropriate action when necessary and not ignore the situation.

Leiza Dolghih is a partner at Lewis Brisbois Bisgaard & Smith LLP in Dallas, Texas and a Co-Chair of the firm’s Trade Secrets and Non-Compete Disputes national practice Her practice includes commercial, intellectual property and employment litigation.  You can contact her directly at Leiza.Dolghih@LewisBrisbois.com or (214) 722-7108 or fill out the form below.

 

 

 

Can an employer require employees to repay training costs in Texas?

GiveBack-1000x360Earlier this year, the Second Court of Appeals ruled that an employee had to repay 1/3 of his salary to the employer as a reimbursement for training costs when he decided to leave.  The employee argued that the reimbursement agreement contained in his offer letter was unconscionable (legal term for “patently unfair”) and against public policy, but the Court of Appeals rejected both of these arguments in upholding the trial court’s award.

In Sanders v. Future com, Ltd., Sanders signed an offer letter from Future com that stated that he would be responsible for repaying the company for any training provided to him by Future com if he voluntarily left the company within one year after completing such training.  The repayment included travel expenses and “salary paid for study or course time.”  Sanders left Future com within twelve months of receiving certain training but refused to repay $4,003.39 in travel costs and expenses and $34,476.96 in salary that Future com paid Sanders while he was being trained.  The company sued him for breach of the employment agreement.

Sanders argued that the training reimbursement provision was not enforceable for a host of different reasons, but most notably, because it was unconscionable and against public policy.   The Court of Appeals rejected both of the reasons findings that:

  1. The repayment provision was meant to protect the company from the loss of Sanders’ employment before it had the opportunity to recoup its costs from training him.
  2. The company had a legitimate interest in making sure that it was not training employees for its competitors. 
  3. The company did not have to show that it actually suffered loss form Sanders’ departure. 
  4. The repayment provision was clear and understandable and was not hidden so as to create an “unfair surprise” for Sanders.
  5. Since training repayment provisions have been found to serve public good, this provision was not against public policy. 

TexasBarToday_TopTen_Badge_VectorGraphicTAKEAWAY FOR EMPLOYERS: Generally, training repayment provisions in employment agreements are enforceable in Texas.  Employers should make sure that such clauses are written in a clear and understandable manner and are not hidden within employment contracts.   

When determining the parameters of the reimbursement policies, companies should make sure that they comply with the Texas Texas Free Enterprise and Antitrust Act of 1983, which prohibits the restraint on trade.  In the case above, it appears that the company provided significant amount of training that took up to 1/3 of employee’s working time.  In such circumstances,  a reimbursement clause may be more enforceable than where a company provided minimal training.  Thus, when drafting a training reimbursement policy or agreement, it is best to consult with a qualified attorney to make sure that it is enforceable.

Leiza represents companies in business and employment litigation.  If you need assistance with a business or employment dispute contact Leiza for a confidential consultation at Leiza.Dolghih@lewisbrisbois.com or (214) 722-7108 or fill out the form below.

Texas Statute Prohibits Firing and Discrimination Against Employees Who Evacuate

2337592_630x354Texas employers may not discharge or otherwise discriminate against an employee who “leaves the employee’s place of employment to participate in a general public evacuation ordered under an emergency evacuation order.” Tex. Labor Code § 22.002.

An emergency evacuation order means an official statement issued by a governmental entity recommending the evacuation of all or part of the population of an area stricken or threatened with a disaster. Tex. Labor Code § 22.001(2). 

You can find a list of emergency evacuation orders related to Hurricane Harvey here.

An employer who violates the statute will be responsible for any lost wages or employer-provided benefits incurred by the employee and will have to reinstate the employee in the same or equivalent position of employment. Tex. Labor Code § 22.003.

There is an exemption for emergency services personnel (fire fighters, police officers and other peace officers, emergency medical technicians, and other individuals who are required, in the course and scope of their employment, to provide services for the benefit of the general public during emergency situations) if the employer provides adequate emergency shelter for such employees. Tex. Labor Code § 22.004.

Because the statute covers “recommended” evacuation, it is unclear whether it covers both “mandatory” and “voluntary” evacuations orders.  To be safe, employers should treat those the same.  The statute is also ambiguous as to whose evacuation orders are covered and simply states that it applies to orders issued by any “authority of this state.” 

BOTTOM LINE Before discharging, demoting, disciplining, or otherwise discriminating against an employee for participating in the evacuation related to Hurricane Harvey, employers should gather specific information related to that employee’s reasons for absence and determine whether the employee falls within the statute’s protections. Meanwhile, the evacuated employees’ pay should be determined in accordance with the Fair Labor Standards Act (FLSA) rules.

Leiza represents companies in business and employment litigation.  If you need assistance with a business or employment dispute contact Leiza for a confidential consultation aLeiza.Dolghih@lewisbrisbois.com or (214) 722-7108 or fill out the form below.

Can You Fire an Employee for Participating in Racist Behavior or Speech Off-the-Clock?

imagesFollowing the events in Charlottesville, Virginia involving a “Unite the Right” rally organized by white nationalist groups protesting the removal of a statue of Robert E. Lee, several participants in the rally were fired by their employers.

Immediately, the media and internet went abuzz with discussions about employees’ freedom of speech and the right to express their opinions, however repulsive they might be to the society, contrasted with the employers’ right to fire employees who damage the company’s reputation and destroy its goodwill.

Business or moral dilemmas aside, as a general rule, employers can fire employees for off-the-clock conduct or speech. While employees have the right to express their opinions under the First Amendment, their employers have the right to fire them for expressing such opinions. In other words, the freedom of speech, when it comes to employment matters, is a myth!

As with any area of the law, there are several exceptions to this rule:

  1. California, Colorado, North Dakota and New York have off-duty conduct laws that protect employees from being fired for legal activities in which they engage on their own time;
  2. California also prohibits employers from firing employees for political activities;
  3. Some off-the-clock speech may be protected under the National Labor Relations Act, which protects employees’ right to discuss their employment conditions;
  4. Public employees may have more (but not much more) freedom of speech rights;
  5. Employment contracts that have “for cause” termination provisions may affect the employer’s right to fire an employee for off-the-clock statements or behavior.

BOTTOM LINE: The above exceptions are limited, so the general rule that employees have no free speech rights applies in most circumstances, including those where an employee participates in a pro-Nazi march or some other racist activity or speech that brings negative media attention to the company and damages its customer goodwill.  

Leiza litigates non-compete and trade secrets lawsuits in a variety of industries in federal and state courts. For a consultation regarding a dispute involving a noncompete agreement or misappropriation of trade secrets, contact Leiza at Leiza.Dolghih@lewisbrisbois.com or (214) 722-7108 or fill out the form below.

Texas Supreme Court Nixes Employee’s Defamation Claim, Reinforces At-Will Employment Doctrine

Historically, Texas employers have been able to avoid defamation claims from terminated employees by keeping mum about the cause of termination when asked to provide references. However,  some employees were able to bring defamation claims anyway by alleging that because they had to disclose the reason for their termination to potential employers, they were compelled to defame themselves – a so-called theory of compelled self-defamation.  Over the years, several Texas courts of appeals bought into this doctrine, creating a heartburn for many employers.  

However, last week, the Texas Supreme Court closed the loophole created by the doctrine of compelled self-defamation and expressly and unequivocally ruled that such doctrine was not recognized under Texas law.  In Exxon Mobil Corp, et al. v. Rincones, an employee terminated for alleged drug use, brought a defamation claim against Exxon and other parties and alleged the doctrine of compelled self-defamation on the grounds that each time he applied for a new job, he had to repeat his employer’s defamatory statements about himself, i.e. that he used drugs, to others.  The Supreme Court ruled that: 

“We expressly decline to recognize a theory of compelled self-defamation in Texas. In rejecting it, we join an emerging majority of state courts that have considered the issue, including those in Connecticut, Massachusetts, Hawaii, Tennessee, Iowa, Pennsylvania, and New York.”

The court explained that if it were to recognize compelled self-defamation, it would risk discouraging plaintiff employees from mitigating damages to their own reputations and encouraging them to publish defamatory statements just to increase the damages associated with their claim. Furthermore, allowing a claim based on compelled self-defamation would impinge on the at-will employment doctrine, which allows employers to terminate employees for any lawful reason, however unreasonable or careless that reason might be. Allowing these types of claims to proceed, would impose a burden on employers to conduct investigations and make accurate findings before taking any action against an employee or risk being sued for defamation.    

BOTTOM LINE: The Rincones decision reinforces the at-will employment doctrine in Texas and serves as a reminder that employers in Texas may terminate at-will employees for any lawful reason.  Employers, however, should continue to be cautious about disclosing the reasons for termination to third parties such as potential employers looking for references.

Leiza represents companies in business and employment litigation.  If you need assistance with a business or employment dispute contact Leiza for a confidential consultation at Leiza.Dolghih@lewisbrisbois.com or (214) 722-7108.

How to Fire Employees Without Being Sued

notice_of_lawsuitLitigation can be expensive, disruptive to business and bad for employee morale.  The good news is that there are certain things that an employer can do before, during, and after the termination of an employee that can minimize the chances of a lawsuit arising out of the termination. In the spirit of an old proverb that advises that “an ounce of prevention is worth a pound of cure,” this article provides a list of best practices that can help avoid wrongful-termination types of lawsuits and the business interruption that comes with such litigation.

Have a probation period. A probation period of 60 to 90 days for new employees allows a business to determine whether an employee is the right fit, and makes it clear to the employee that they do not have a guaranteed term of employment or any rights that may come with a longer tenure, such as medical or other fringe benefits.  An employer should make sure that any problems with an employee during the probation period are documented. The employee’s file should also clearly show when the probation status changes to regular employment.

Have an employee policy.  An employee handbook that clearly outlines the practice’s policies and procedures is key to avoiding disputes over whether the terminated employee is owed unpaid Paid Time Off (PTO) or other compensation upon termination, or whether such employee was terminated for cause or without cause (an important distinction when it comes to the payment of unemployment benefits). If the handbook contains a description of the company’s progressive discipline policy, consistent application of this policy to all employees can establish a defense to a claim that a particular employee was terminated based on a discrimination or retaliation. It should also contain an anti-harassment policy and explain to employees how to report incidents of harassment, discrimination or retaliation.

Follow the policy.  If a business has a progressive discipline policy, it must make sure that such policy is applied fairly, neutrally, and consistently to all employees.  In other words, if one employee is terminated after receiving three written warnings, then another employee cannot be allowed five such warning before being terminated. Making exceptions to the policy can result in a terminated employee arguing that they were treated differently based on one of the protected categories such as race, gender, religion, and others.

Document problems. Any problems with an employee, especially policy violations, should be documented in their personnel file.  Ideally, the problem should be documented in writing, on a form that is signed by the employee, acknowledging that they received the warning.  If this is not possible, then a written note should be made by the employee’s supervisor noting what the problem is and that it was discussed with the employee. Most termination lawsuits involve a situation where an employee had no documented problems or the problems were documented poorly.

Know which laws apply to your practice. Before dismissing an employee, an employer should become familiar with the laws that might apply.  Often, but not always, that depends on how many employees the business has.  Additionally, certain laws, such as the Family and Medical Leave Act, for example, apply only to employees who have worked for the employer for 12 months and a certain number of hours.  Thus, such a statute does not protect all employees.  Knowing which laws a company must comply with before terminating an employee can save it from an unpleasant surprise in the form of a lawsuit.

Prepare for the termination.  Firing on the spot should only occur in extreme circumstances that justify such an action.  Rather, a typical termination should be preceded by a few steps that tend to minimize the chances of a lawsuit. The person in charge of termination should know which laws apply.  He or she should also review the company’s handbook describing unacceptable employee behavior and the discipline policy and make sure that the company has complied with the policy in documenting the employee’s violations of the rules.  The performance appraisals and any disciplinary action records should be consistent with each other. 

A pre-termination review of all the records related to the employee should establish that the termination is legal under all applicable laws, is justified by the facts, is consistent with the company’s policies and procedures and is consistent with how the business has handled such terminations in the past.

Be professional during the termination meeting. During the termination, the key is to treat the employee with respect, and to be polite but firm.  The discussion should be brief and based on the facts.  While an employee may get emotional, the person on the other end of the discussion should remain professional. If a volatile situation is expected, it may be necessary to have security personnel present.  At the very least, one other person should be present on the employer’s side during the termination, who can later confirm that nothing improper was said during the termination conversation.

Comply with Texas Payday Law.  Many times, employers will take certain deductions from the final check, or will hold the final paycheck until the employee returns company property. These actions may violate the Texas Payday Law statute, which requires employers to follow very specific rules in making the final payment to a terminated employee. 

The Texas Payday Law covers all Texas businesses, regardless of size, and applies to all persons who perform a service for compensation, except for close relatives and independent contractors. It covers salary, commission, bonuses, and certain fringe benefits.  This statute lays out the rules on how and when an employer must pay the final paycheck, depending on whether the employee resigned or was terminated. It also describes when an employer can take deductions from the final paycheck.  Failure to comply with the final paycheck rules under the statute can result in penalties from the Texas Workforce Commission. Therefore, employers should become familiar with this statute and its requirements.

Follow up after the termination. The terminating manager should write down what was said at the meeting in the event of a lawsuit. She or he must also inform the remaining employees on a need-to-know basis about the termination.  If a higher-level employee is terminated, have a staff meeting as soon as possible after the termination and tell them what happened and why, but do not provide the specifics.  You want to stop the rumor mill, not feed it.

Leiza is a business and employment litigation attorney in Dallas, Texas. If you need assistance with a business or employment dispute contact Leiza for a confidential consultation at Leiza.Dolghih@lewisbrisbois.com or (214) 722-7108.