tory performance or misconduct. This is not to suggest 

 that the file be "papered" or that the employee be ha- 

 rassed into quitting, but only that repeated or serious 

 unacceptable performance or conduct be noted in the 

 file and communicated directly to the employee. 



When informing an employee of discipline or termi- 

 nation, give the actual reasons. If you give false reasons 

 (common examples are a reorganization or a decline in 

 revenues! and your actions are later challenged, you 

 will have to backtrack and document the real reasons 

 for your actions This frequently happens when the em- 

 ployer responds to the employee's claim for unemploy- 

 ment compensation and later desires to say something 

 different in response to a discrimination or wrongful ter- 

 mination claim. Be truthful and consistent. 



Saying Too Much: Disclosing Too Much 

 Information or Failure to Control What Is 

 Disclosed and to Whom 



Suggestion: Designate one or at most two representatives 

 to speak on behalf of the Company and respond to 

 reference checks. 



Employers are always torn between saying too little or 

 saying too much when it comes to employment refer- 

 ences for former employees. On the one hand, employ- 

 ers are afraid of defamation lawsuits and related claims 

 by former employees especially when information pro- 

 vided by that employer may affect a former employee's 

 ability to get another job. On the other hand, em- 

 ployers are now faced with claims for providing false or 

 misleading references when they fail to disclose poten- 

 tially important information to prospective employers. 



Most jurisdictions, including New Hampshire, 

 now recognize a legal claim against employers who 

 are negligent in hiring and retaining employees: that 

 is, when the employee causes harm to others and the 

 employer knew, or should have known, the employee 

 had dangerous propensities. As a result of burgeon- 

 ing legal theories in the hiring arena and the busi- 

 ness cost of hiring the wrong person, prospective em- 

 ployers have good reason to thoroughly check and 

 screen the background of potential employees. Refer- 

 ence checks can be among the most valuable tools 

 for screening applicants , but they are not without 

 their potential legal pitfalls. Although the general 

 rule is that employers are protected by a qualified 

 privilege when giving references to a prospective em- 

 ployer, that privilege only covers communications 

 made in good faith. 



it is because of the pitfalls in giving employ- 

 ment references that many employers, as a matter of 

 policy, have stopped giving references altogether, be- 

 yond confirming the dates that the former employee 

 worked for the company. However, such a policy, de- 

 pending upon how it is communicated to a prospec- 

 tive employer and whether there is any additional 

 "off-the-record" discussion, may effectively convey 



the wrong message and have the effect of creating 

 the type of liability the employer tried to avoid. As a 

 rule, therefore, employers should designate one or 

 two representatives to speak on behalf of the com- 

 pany. Those representatives should respond to refer- 

 ence checks with simple, verified statements of fact 

 about the former employee. 



Adding Insult to Injury: Inviting a Lawsuit 

 by Mishandling Discipline or Discharge 



Suggestion. Strive to achieve a balanced, fair, and con- 

 sistent approach to discipline and discharge. 



In order to avoid or reduce the chances of a lawsuit 

 arising out of employee discipline or discharge, we 

 offer the following advice: 



Don't fire an employee after a heated argument or 

 major dispute. The best time is after a regularly 

 scheduled performance evaluation when cooler heads 

 prevail; don't delegate the difficult task of informing 

 an employee of termination. And don't inform the 

 employee of termination by letter only, unless that is 

 the only means of communication. However, it is an 

 acceptable practice to write a termination letter and 

 to give the employee an opportunity to read it in 

 your presence. Don't insult or belittle the employee 

 during a termination session. Stick to the facts re- 

 garding the unsatisfactory performance or misconduct 

 and outline the benefits that will be provided with 

 the termination. Don't characterize the reasons for an 

 employee's work problem. That is, don't use terms 

 like "laziness," "lack of intelligence," etc. Avoid dis- 

 cussion of the employee's personal problems, home 

 life, or other factors related to performance at work. 

 Simply describe the unsatisfactory performance or 

 misconduct. Don't deny the employee an opportunity 

 to respond to the evidence upon which you have 

 based the decision to terminate. This will not only 

 demonstrate openness, but you may also learn some 

 important things about the way the employee was 

 treated in the company. Don't attempt to persuade 

 the employee that termination is the appropriate 

 step. If you try too hard, you're likely to engage in 

 "overkill" and provide the employee with some emo- 

 tional incentive to file a lawsuit or discrimination 

 complaint. And don't rule out compromise. Be aware 

 that there are solutions besides termination which 

 may be appropriate to the problem. Force your man- 

 agers to consider such alternatives before recom- 

 mending that an employee be terminated. 



Tom Flygare and ]im Reidy are members and directors of the 

 law firm Sheefian Phinney Bass and Green, Professional Asso- 

 ciation, Manchester, NH. They both practice in the area of la- 

 bor and employment law. Tom can be reached by phone at 

 (603) 627-8168 or by e-mail at: ttlygare@sheehan.com. \im's 

 phone number is (603) 627-8217 and his e-mail address is: 

 ireidy@sheehan.com. 



JUNE «. JULY 1997 



