As the economy worsens, many employers will seek ways to cut costs. One very painful but sometimes unavoidable cost-cutting measure is job elimination. A well-meaning employer faced with laying off a poorly-performing employee may attempt to soften the blow by downplaying or ignoring performance issues. But as we can see from the story of Marvin Master below, this may not always be a wise move.
Marvin's Story
Marvin Master owns Acme Corporation, a manufacturing company with 25 employees. Acme's 52-year-old file clerk, Wanda Worker, has had performance problems since she was hired two years ago. In the last several months, however, she has made a number of costly mistakes. Because of falling sales and a worsening financial situation, Marvin realizes that Acme cannot continue to absorb the cost of Wanda's mistakes. He knows that he cannot afford to keep Wanda on. Even so, he hates the thought of terminating her. She is very sensitive, and she has tried hard.
As he thinks a little more about Wanda and her job duties, Marvin determines that he may be able to continue operations even if he does not refill her position. If he eliminates her job and distributes her job duties among other employees, he can avoid having to tell her he is terminating her for poor performance and he can cut costs. Relieved, Marvin calls Wanda into his office. He tells her has to eliminate her job because of the company's poor financial situation. He says nothing about her performance problems.
Two weeks later, Marvin receives a routine mailing from the Unemployment Office asking why Wanda lost her job. He writes "job elimination" on the papers and returns them.
Five months later, Acme's financial situation has improved. Marvin decides that he really could use a file clerk and asks a neighbor if he knows anyone looking for a job. The neighbor mentions that his 22-year-old daughter is looking for work. Marvin interviews her and hires her.
Within weeks, Marvin receives a charge of age discrimination on Wanda's behalf from the EEOC. Wanda alleges that Acme fired her in order to hire a younger person. In his response, Marvin truthfully states that he did not intend to refill the position at the time that he terminated Wanda. He also asserts that Wanda was let go not only because her position was being eliminated, but because of performance problems as well. The EEOC asks Acme to produce Wanda's personnel file. When Marvin reviews the file, he realizes that he never took the time to document Wanda's performance issues. In fact, he had given her a nearly perfect performance evaluation several months before her termination, hoping to spare her feelings.
Where did Marvin go Wrong?
Can you spot the mistakes Marvin made? There are several. First, he failed to document Wanda's poor performance. While it would have been best for him to follow a progressive discipline procedure, any accurate documentation would be better than none. Second, Marvin did not prepare a truthful performance evaluation. He now has to tell the EEOC that the evaluation he wrote before the charge was filed does not accurately reflect her performance, raising obvious credibility issues. Third, Marvin did not give a complete reason for the termination to Wanda, and he did not give a complete reason to the Unemployment Commission. Now, he must try to convince the EEOC that he is not just inventing new facts when it is convenient to do so. Fourth, Marvin did not think carefully about the consequences of refilling a position that he had recently eliminated. While there can be legitimate reasons for this, and, in fact, there were legitimate reasons in this case, the logical conclusion drawn by someone in Wanda's position is that the job elimination was simply a pretext for an illegal motive.
Depending on other evidence that might exist, Marvin's mistakes may lead the EEOC to conclude that there is reasonable cause to believe illegal discrimination occurred. This may happen even though, as we know, Wanda's age played no part in the decision to let her go. You can avoid Marvin's possible fate by (1) accurately documenting performance and behavior issues, (2) making truthful and complete representations about personnel decisions, and (3) carefully considering the possible consequences of reversing a decision to eliminate a position.
Do you have a question about employment law issues? E-mail Wendy Becker at wlb@gdm.com and your question may be addressed (anonymously, of course) in a future issue.
Wendy Becker, a member in the Lexington office of Greenebaum Doll & McDonald PLLC, advises and defends employers in all types of employment-related matters. This article is provided as general information rather than legal advice. Questions about individual situations should be directed to legal counsel.