Being Untruthful About the Reason for a Termination Can Get an Employer in Hot Water

We have written in the past about how important it is for an employer to be accurate in articulating its reason for terminating an employee. For example, if an employer is terminating an employee for poor performance, the employer should say so, and not try to characterize the termination as a job position elimination. If a terminated employee claims illegal discrimination, and a judge or jury decide the employer was not truthful about the reasons for or circumstances surrounding the employee’s termination, there is a significant risk the judge or jury will determine, based on that falsehood, that the employer really terminated the employee for unlawful reasons such as age, race, or sex.

A recent federal case in Pennsylvania illustrates this principle. In that case, McMullin v. Evangelical Servs., the employer hired 63 year old McMullin to be its new Chief Financial Officer. A year later, the employer fired McMullin, claiming he was a poor performer. McMullin sued the employer for, among other things, age discrimination. Normally, an employer could easily defend an age claim under these circumstances – if the employer hired McMullin when he was 63, it does not seem plausible it would fire him because of his age a year later because he was 64.

However, the federal judge concluded that in this case, things were not so clear cut, and denied the employer’s motion for summary judgment, which would have dismissed the case. The court decided McMullin was entitled to proceed to a jury with his age claim based on three facts:

1. the employer told its employees that McMullin resigned, rather than saying he had been fired
2. the employer’s CEO testified that two employees had complained directly to him about McMullin’s poor performance, but those employees contradicted that claim (they testified they did have concerns about McMullin’s performance, but they also testified they had not discussed those concerns directly with the CEO);
3. the employee hired to replace McMullin was 12 years younger than McMullin.

Based on those facts, the judge determined “a jury could find [the CEO’s] explanation for terminating McMullin incredible” and that “{s}uch a finding may give rise to an inference of discrimination.”

The bottom line is that the McMullin employer turned what should have been an easy case into a problematic case through two falsehoods – telling employees that the CEO resigned, and telling the Court  that two employees had directly complained to the CEO about the CFO’s performance when in fact they had not.

The lesson for employers is to be truthful and straightforward.  Be honest with the employee about why the employee is being terminated – do not invent an untruthful reason. Be honest (or do not say anything) to other employees about the reason(s) an employee is leaving the organization. And finally, be honest with the Court in explaining the reason for and facts relating to the termination.