Why Document At-Will Terminations?
Managers often ask why they need to worry about documentation when terminating employees since everyone is an employee-at-will. The answer requires a short summary of employment law 101. Although employment in every state in the country other than Montana is employment-at-will, the answer lies in what most employees do once they have been terminated.
First of all, what is employment-at-will? Employment-at-will means that you can hire or fire an employee for any reason or no reason at all. However, there is a little exception at the end of that sentence that states that this is so "as long as the reason is not unlawful." Herein lies the issue.
Many employees who have been terminated will claim that their termination was unlawful because it was discriminatory based upon their protected class. As everyone knows, under Title VII of the Civil Rights Acts of 1964 and 1991 there are only five protected classes, to wit, sex, color, race, national origin and religion.
If President Obama has his way there may soon be a sixth which will be sexual orientation. But currently there are five protected classes under Title VII as well as age under the Age Discrimination in Employment Act, disability under the Americans with Disabilities Act, military status under USERRA and genetic information under the Genetic Information Nondiscrimination Act ("GINA").
In addition, each state usually has a larger number of protected classes than under federal law such as citizenship, marital status, sexual orientation, etc. So what most terminated employees do is claim that the reason they were terminated was discriminatory based upon one or more of these protected classes such as race, age, disability, etc.
How then can an employer protect itself against such claims? The answer is documentation. The employer must be prepared to show, prior to the termination of the employee, that the real reason for the termination was that this was a terrible employee with poor performance or that his attendance was abysmal. The best way for an employer to demonstrate this is with disciplinary warning letters stating that the employee is a poor performer or has terrible attendance.
Expectation of Fairness
Courts have an expectation of fairness, meaning that if an employer is really terminating the employee for poor performance or attendance, the employer who terminates an employee should provide the employee with the reason that they are doing poorly and what they can do to improve. All of this should be in the disciplinary warning.
The employer should then provide the employee with an opportunity to improve as well as with a warning that a failure to improve his/her performance will lead to further discipline, up to and including termination. If they fail to improve, provide another warning and another until it is clear that you have given the employee every opportunity to improve and they refuse to change. Then, when you terminate the employee, it will be clear to a court and/or jury who hears the discrimination case that yes, in fact, the employee’s performance and not discrimination was the actual motive for the termination.
So this is the reason that although employees are employees-at-will, employers still have to document the reasons that the employees are being terminated: It is necessary so that employers protect themselves from any future claims that the termination was in fact discriminatory.