Thursday, June 25, 2009

Protecting Yourself Against Claims of Discrimination and Wrongful Termination

Most employers these days are being faced with the need to make some changes to the way in which their businesses are structured. During these difficult economic times, I am sure that each choice is weighed carefully. As of April 2009, the unemployment rate in Texas stood at 6.7%, which is better than the 9.4% rate of unemployment that the country as a whole is experiencing. This relative good fortune is of little comfort to those whose lives are affected. When you hold the livelihood of others in your hands, there is a great sense of responsibility.

You need to make the decisions that are best for your business and family as well as give consideration to the people who work for you. Unfortunately, after issuing a painful but necessary cut to your staff, you still may be accused of discrimination or wrongful termination. Good jobs are hard to come by these days, and employees may try any tactic to keep their positions. You need to be familiar with both federal and state laws that apply to employment practices, as well as know that steps you can take if faced with such a lawsuit.

Let me start with a piece of good news. Texas is one of the friendliest states in terms of employer protection. Our state follows the "employment at will" rule, which means that, with limited exceptions, an employee can be fired without warning and without cause. Even if there is a written contract establishing employment, the employer must specifically indicate that he or she will not terminate anyone except for under certain circumstances, which must be laid out. So, even if you signed on the dotted line when hiring someone to assist you in your office, you likely have retained the right to let that person go at any moment that you choose.

The "at will" policy does reach its boundaries when it comes into conflict with the federal and state laws that are in place to protect employees. Texas employers cannot discriminate against or fire employees who fit into the following categories:

1. Whistle blowers - If any employee reports fraudulent activity or safety or environmental concerns to authorities, this person cannot be fired as a result.

2. Refusing to Break the Law - This should not be surprising. If you ask an employee to commit an illegal act and your request is refused, you may not use this decision as cause for termination.

3. Victim of Discrimination against Protected Class - An employee cannot be fired simply based on race, color, national origin, religion, sex, age (with exceptions), disability, or for taking maternity or family medical leave

If you are dealing with a former employee who is suing you for discrimination or wrongful termination and his reasoning does not fit into one of the categories listed above, the case should be dismissed quickly. This is certainly the desired outcome, as the cost for further legal defense can be quite difficult for employers to handle. Out of the discrimination claims that are not dismissed outright, eighty-one percent wind up in front of arbitrators of in administrative hearings. These proceedings cost the employer an average of between $22,000 and $40,000. Of course, cases that end up going to trial will be exponentially higher in total cost. An employer's best course of action is to know his rights and his boundaries when dealing with employees and always to operate within these guidelines.

Keeping up with this issue is crucial for employers because accusations of discrimination are on the rise, both here in Texas and around the country. Age discrimination is one area that perhaps does not get much publicity, but is a growing problem. As shared by Joe Bontke from the Equal Employment Opportunity Commission (EEOC), "The older the workforce gets, the more age discrimination claims come. 16,585 out of 86,000 cases received in Texas last year were regarding some form of age discrimination."

This represents a 20% increase in claims since 2004. Section 21 of the Texas Labor Code, as well as the federal Age Discrimination in Employment Act of 1967, protects individuals who are at least forty years old from facing employment discrimination based on age. In addition, charges of racial discrimination in the workplace are at their highest levels nationally since 1994. With the diverse population that resides in Texas, this issue is one that needs to be of concern to all employers. And, with layoffs and office closures continuing to occur in the wake of the current recession, you can be certain that disgruntled employees will be looking for legal reasons to protect their jobs or promotions when paychecks are on the line.

What can you expect if an employee does seek legal action against you? A complaint will be filed with the EEOC within 180 days of the alleged wrongdoing. If mediation is available, the EEOC may present this option to both parties as a first step. Mediation is free and the resulting settlements are confidential. If an investigation is determined to be necessary, someone from EEOC will be assigned to the case and embark upon a study of the case that usually takes at least six months.

The EEOC then will send the employee a "right to sue" letter, which indicates that the employee either has a cause for a complaint, no cause for further action, or insufficient evidence to proceed further. Regardless of the decision reached by the EEOC investigator, the employee still has the right to sue you in federal or state court for up to ninety days after receiving the "right to sue" letter. Be prepared for the possibility that an employee who is unhappy with his situation will pursue his or her case to the fullest extent possible.

It is in your best interest to hire an employment attorney as soon as you receive notice that an investigation concerning possible discrimination at your workplace is underway. An experienced lawyer will assist you in the important process of being fully compliant with the request for materials. Your attorney also will be your advocate in presenting the best possible argument in your defense and ensure that all relevant state and federal laws are being applied on your behalf. If you are facing a complaint concerning employment discrimination or wrongful termination, please place a call to an attorney today.

Tony Bertolino is a managing partner of Bertolino LLP, a law firm with offices in Austin, Houston, and San Antonio. Bertolino LLP has attorneys who specialize in the area of business litigation and can assist with issues surrounding employment. Please contact Bertolino LLP to learn how you can be assisted with your legal needs as an employer.

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