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Bad News Can Be Good For a Wrongful Termination Lawsuit

An employer may build a stronger defense against a problem employee by digging up more evidence of misconduct.
Ask employers to list their least favorite tasks and firing an employee is bound to be at the top. It’s difficult, awkward and stressful for everyone concerned. Replacing an employee is expensive, time-consuming and hurts productivity, and the possibility of a lawsuit for wrongful dismissal makes it even more worrisome. So it’s no wonder that employers are reluctant to terminate staff even in cases of blatant employee misconduct.

But hanging onto a problem employee is a bad idea, no matter how unpleasant it may be to let him or her go. In most cases, it’s better to remove a problem employee as quickly as possible. Keeping on bad employees is bad for morale, but equally important is the fact that the discovery of one termination-worthy incident may be only the tip of the iceberg. In fact, some employment attorneys feel that the discovery of one fireable offense could indicate that there are others.

“Most difficult employees cause problems across the board,” wrote Toronto employment lawyer Howard Levitt in a recent article in the Ottawa Citizen. “When a client comes to me with one reason to terminate someone, I am always alert to the possibility of more,” he wrote.

Secondary Misconduct as a Defense

The good news is that this can sometimes work in the employer’s favor in the case of a wrongful termination lawsuit. If an employer discovers, while preparing a wrongful termination defense, that the employee engaged in misconduct other than that for which he or she was fired, the newly uncovered misconduct can be used in the defense of the lawsuit, and this applies in both the US and Canada.

“Ultimately, employers can rely on the results of later investigations if the evidence establishes that the problems existed at the time of dismissal,” wrote Levitt.

“In the US, federal and state law usually permit the use of ‘after-acquired evidence’ in defending employment discharge and discrimination cases,” says Charles Krugel, a Chicago labor and employment lawyer.

In fact, the employer could end up successfully defending a wrongful termination case that he or she might have lost, had the secondary misconduct not been uncovered.

“More specifically, this means that although there is an alleged illegal action by the employer, if newly obtained evidence of employee misconduct justifies firing or disciplining that employee anyway, then the employee can’t be compensated (awarded damages) even if the employer’s actions, prior to obtaining the new evidence, are illegal,” says Krugel.

Dig for Dirt to Reduce Damage

“The newly obtained evidence should warrant termination or discipline so long as such action is consistent with company policy or practice, is illegal or is otherwise so extreme that the employer can’t justify retaining that employee (eg, violence, theft, vandalism),” says Krugel. This evidence may not be a complete insulator from liability, Krugel says, but it may help to reduce damages.

It makes sense then, for employers faced with a wrongful termination lawsuit to spend considerable time and effort digging through the dismissed person’s employment history to find any other evidence of serious misconduct.

Published November 22, 2011; Author: Dawn Lomer

Very recently, one of my clients had 2 civil rights complaints filed against them with an enforcement agency by the same employee.  Each complaint was a few months apart and were sort of “kitchen sink” complaints.  That is, the employee primarily complained of disability discrimination though their complaint included discrimination on the basis of many other protected classes too.

One of the problems that arose, on our end, was that we never responded to the complaints in a timely manner in the first place; I won’t explain why this happened but it did.  Although our delays had no bearing on whether the actual alleged discrimination occurred, in my opinion, it’s never a good idea to just blow-off a regulatory & enforcement agency (for more on how to deal with & respond to regulatory agency complaints, see this post). Nevertheless, after we officially responded, by denying all charges, & once we got the settlement process going, it took about 2 weeks from issuing our response to reaching a $1,250 settlement for both complaints.

This is the 3rd employment civil rights complaint I’ve settled in the $600 range over the past few months.  Here’s information on the earlier (September) complaint.

The rationale for settling all 3 of the complaints instead of going through hearings or trials is that it’s cheaper to settle in the $600 range than it is to pay my fees & lose a lot of time off from work preparing for & attending hearings.

The complaint was baseless. The employer is a great social services organization. The settlement is similar to a recent NLRB settlement I negotiated for 40% backpay.  This case also concerned a social services agency & allegations of firing in retaliation for concerted activity. In both cases, the complaints were groundless, but the settlements were cheaper than prolonged litigation or dispute resolution.

Another common element in these cases, as with most labor & employment complaints I deal with, is that the complainants almost always think that they’re going to receive a financial windfall & shock the world with revelations of abuse, mismanagement, etc. That’s just not reality. More often than not, the ex-employees have to realize that if they want to get a quick resolution & money, or some sort of resolution, from their complaints, then they should reach a cost-effective settlement.

The agencies that process these complaints are usually cognizant of these realities already, which is probably why they don’t block these settlements, and sometimes even persuade the complainants to accept these terms. These agencies have huge caseloads & need to spend greater resources on substantiable complaints.

Daysi Funes, Executive Director, Centro Romero.