Making Your Termination Decision Count (Don't Sleep on This One…)

17 March 2014 Labor & Employment Law Perspectives Blog

The success or failure of an employer’s defenses in employment litigation often turns on what motivated a termination decision. My consistently subpar performance or my complaint about harassment? My taking of leave or requesting of accommodation, or the ongoing business struggles making it necessary to cut costs? As a consequence, the timing of a challenged decision and decision-maker identity become key issues; if the decision occurs prior to protected activity and/or is made by someone with no knowledge of that activity, logically it could not have factored into the termination decision. These are the kinds of critical facts an employer would want to have to defeat discrimination or retaliation claims.

A serious problem occurs however, as illustrated by a recent case, when a termination decision prior to protected activity does not actually count as a termination decision, and then the actual act of termination occurs on the non-insulated side of protected activity. In the decision, the former employer argued it initiated the termination process for an employee repeatedly caught sleeping on the job and later diagnosed as narcoleptic, before she put the company on potential notice of a need to engage in the interactive process. The employer initially prevailed based on the fact that a human resource manager had recommended termination prior to the employer receiving notice that medical circumstances might be causing the employee’s narcoleptic bouts.

However, the United States Court of Appeals for the Seventh Circuit overturned that win, finding that while the employer may have begun considering termination prior to interjection of a potential disability, it had not manifested a “clear intention” to terminate until after having sufficient notice the employee may have a disability. As part of that analysis, the appellate court articulated an “unequivocal notice of termination” test requiring a “final, ultimate, non-tentative decision to terminate the employee” and “unequivocal notice” to the employee of the termination decision. Though the Court’s subsequent comments appear to soften the “unequivocal notice” to the employee requirement, the opinion makes clear that the absence of a clear manifestation of intent to terminate until after the employee had provided information to potentially require an interactive process raised questions about the employer’s motive for termination.

Employers commonly make concrete termination decisions but delay effectuating them for a number of practical reasons. They may require time to arrange for coverage of the employee’s responsibilities, or the termination may occur as part of a series where the sequence of employee notifications requires careful handling. These are legitimate business imperatives and we do not suggest, nor do we believe the Seventh Circuit suggests, that employers should discontinue using such practical considerations as part of the overall termination process, notwithstanding the Seventh Circuit’s “unequivocal notice” language. Courts will likely continue to understand that practical reasons for a delay in effectuating an already-made termination decision do not equate to a discriminatory or retaliatory motive, as even the Seventh Circuit has observed in recent decisions. The linchpin factor though is establishing the clear intention to terminate. The key takeaway from the recent case then is, if a decision to terminate has been made, the employer should immediately document the fact of that decision and the identity of the decision-maker rather than – if you will excuse the pun – falling asleep at the switch and later having the timing and motivation behind a termination decision called into question. Just as we constantly exhort managers and supervisors to document performance problems, it should be equally important to document the timing of disciplinary and termination decisions independent of the timing of delivery of the actual discipline to the employee.

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