Employment laws can be complex. Dozens of federal, state and local laws set standards for how employers must treat employees and handle employment matters. To make matters even more challenging, these laws change frequently and vary significantly from state to state. Accordingly, conscientious, well-intentioned employers can run the risk of legal claims despite their best efforts.
In this first (of three) installments, I will discuss two common mistakes that Pennsylvania employers often make (with nos. 3-10 to come in Parts 2 and 3):
- Misunderstanding the concept of “at-will employment”
This phase may not mean what you think it means. Contrary to what many employers think, employers in Pennsylvania (a so-called “at-will state”) do not have a blanket legal right to terminate an employee “for any reason or no reason at all.” There are, indeed, many reasons that an employer may not fire someone. These include an individual’s legally protected characteristics (such as race, national origin, religion, sex/gender, veteran status, etc.), and the exercise of rights under laws like OSHA (the federal workplace safety and health law) or the ADA (the federal law that prohibits discrimination against qualified individuals with a disability). Additionally, the specific provisions of employment agreements or union contracts may limit when, how or subject to what procedures an employer may terminate an employee. Lastly, Pennsylvania employers may not fire employees for reasons that violate important public policies. For example, Pennsylvania employees cannot be fired for refusing to commit a crime, filing a workers’ compensation or unemployment compensation claim, etc.
Q: What does all this mean?
A: Although there is a presumption in Pennsylvania that an individual’s employment is “at-will,” that presumption can be overcome in multiple ways:
- by a statute (such an anti-discrimination law);
- by a contract provision (such as one that requires “cause”); or
- by an important public policy.
As such, employers in so-called “at-will states” still must carefully analyze termination decisions to identify and assess any possible legal issues. Which leads us to common mistake no. 2…
- Misunderstanding how anti-discrimination employment laws work
Many employers believe that an employee or former employee must have direct evidence of discrimination to win a legal claim. In other words, they think that a plaintiff must have some sort of “smoking gun” (like a racial slur, misogynistic comment or overt admission of protected characteristic-based discrimination) to win such a case. So, when they are confident that they’ve never written or uttered such a statement, they think such a claim will be summarily dismissed.
Such a belief evidences a fundamental misunderstanding of anti-discrimination laws. These lawsuits do not require direct evidence. Yes, discrimination claims can be won with only indirect or circumstantial evidence. Consider this example: an employer discharges a 60-year-old employee for repeatedly failing to follow a supervisor’s directives, say, failing to submit reports in the required format for three straight projects. The employer considers this “insubordination,” which the employee handbook clearly states is grounds for “discipline up to and including discharge.” To the employer, this situation can seem clear cut and devoid of any legal risk. But the discharged employee can still assert and win an age discrimination case – even though the employee has never previously raised the age issue, doesn’t claim to have been subject to any age-related comments and no other direct evidence of age-based animus exists. Under the law, the employee can prevail if he can show that the employer’s stated reason for the termination wasn’t the real reason. For example, what if he has evidence that significantly younger similarly situated employees failed to submit proper reports four or more times without being fired or otherwise disciplined?
Q: What does all this mean?
A: Given the way anti-discrimination laws work, employers can’t successfully defend an unlawful discrimination claim by either invoking the at-will doctrine or citing the lack of direct evidence.
Here are three key things employers should do to mitigate the legal risk of their employment decisions (such as terminations):
- Avoid creating any direct evidence of unlawful discrimination (i.e., don’t use or tolerate speech or other behavior that is hostile to a legally protected group);
- Be able to articulate a legitimate, non-discriminatory business reason for any adverse employment action, such as firing, not hiring, failing to promote someone (which is why the myth that so-called at-will employers can fire someone for no reason is so dangerous!); and
- Not give employees a basis for showing that the stated reason was pretextual, i.e., not the real reason. Employees who can show that the employer gave multiple conflicting or inconsistent reasons for an employment action or inconsistently applied standards or policies have good pretext arguments and can win a case without any direct evidence.
Stay tuned for the next two installments!
