Category Archives: Discipline and Discharge

Quirky Question # 194: Firing the Abusive Manager

Question:

One of our managers is known for being very “tough.”  None of the employees he supervises has filed a complaint against him, either internally or externally, but rumors of borderline abusive behavior kept reaching our executive suite.  As a result, we investigated.  The rumors were well grounded factually – the guy was much rougher on employees than we realized.  Based on our investigation, we’d like to fire him.  But, he falls into two protected classes.  Given that fact, we are anxious about a discrimination lawsuit if we terminate his employment.  Got any advice?  What are the risks of doing nothing versus doing something? Answer→

Quirky Question # 180: Terminating Sales Reps — Traps for the Unwary

Question:

We are a national company. We sell products through a network of sales representatives. Sometimes they’re great. Sometimes they aren’t. When they aren’t, we fire them and move on.

Recently, we learned that dumping underperforming sales representatives in Minnesota may not be so easy. Can you enlighten us? Is this regulated by statute? Answer→

“Cat’s Paw Theory Endorsed by U.S. Supreme Court” — Staub v. Proctor Hospital

On March 1, 2011, the Supreme Court decided the case of Staub v. Proctor Hospital, No. 09-400.  The decision was unanimous (8-0), with Justice Scalia writing the Court’s opinion, Justice Alito writing a concurrence in which Justice Thomas joined, and Justice Kagan taking no part in the case.  The Court overturned the Seventh Circuit, holding that a reasonable jury could have determined that Proctor Hospital violated the Uniformed Services Employment and Reemployment Rights Act of 1994 (“USERRA”), on a “cat’s paw” theory, when Proctor’s human resources director terminated Vincent Staub based in part on recommendations of Staub’s supervisors who allegedly were motivated by hostility towards Staub’s responsibilities as a member of the Army Reserves.

(For those unfamiliar with the “cat’s paw” concept, Justice Scalia explained: “The term “cat’s paw” derives from a fable conceived by Aesop, put into verse by La Fontaine in 1679, and injected into United States employment discrimination law by Posner in 1990. See Shager v. Upjohn Co., 913 F. 2d 398, 405 (CA7).  In the fable, a monkey induces a cat by flattery to extract roasting chestnuts from the fire. After the cat has done so, burning its paws in the process, the monkey makes off with the chestnuts and leaves the cat with nothing.  A coda to the fable (relevant only marginally, if at all, to employment law) observes that the cat is similar to princes who, flattered by the king, perform services on the king’s behalf and receive no reward.”)

Background Facts

Staub, a member of the United States Army Reserve, worked at Proctor Hospital as an angiography technician.  Staub’s immediate supervisor, Janice Mulalley, and her supervisor, Michael Korenchuk, disliked Staub’s Reserve obligations, which included training one weekend per month plus two to three weeks each year, because the obligations made scheduling difficult.  Both Mulally and Korenchuk made disparaging remarks regarding Staub’s Reserve service, and Mulally indicated to a co-worker that she wanted to “get rid of” Staub. Korenchuk was aware that Mulally was “out to get” Staub. Answer→

Quirky Question # 168 — Is Describing a C-Level Executive’s Discharge as “For Cause” Defamatory?

Question:

I saw your last question about discharging an executive for cause. We recently terminated a C-level executive for that reason.  His contract delineated four different “cause” grounds and we felt that two were implicated, although one of these ground arguably was iffy.  We’re wondering whom we can tell about this decision.  Are there any risks associated with publicizing this discharge? Answer→

Quirky Question # 167; Who Has the Burden of Proof When Terminating an Executive For Cause?

Question:

Our company is considering terminating a C-level executive for cause pursuant to a provision in his employment agreement. I mentioned this to a friend of mine who is an attorney and she said the company will be obligated to prove our actions were justified. This does not make sense to me. I thought that, like nearly all plaintiffs, if our executive sued, he would have to prove his claims. Can you enlighten me? Answer→

Quirky Question # 160: Non-Competes and Public Policy

Question:

We are a nationwide company with offices and employees in nearly every state. One of our primary growth areas is California. We understand that California courts are generally inhospitable to post-employment restrictive covenants, including non-competes. But, we are trying to have uniform policies throughout our organization. Consequently, we still have confidentiality and non-compete language in our employees’ contracts, even for those who work in California.

Recently, one of our employees left our company and joined a competitor, also located in California. We understood that it would be difficult to enforce the non-compete so we simply called our competitor and pointed out our concerns regarding both our non-disclosure and our non-compete obligations. We advised our competitor that we would appreciate it if they would abide by the spirit of our non-compete and noted that we would reciprocate if provided the opportunity with regard to our competitor’s employees.

Our competitor terminated our ex-employee soon thereafter. Her lawyer has now written us to state that we have violated public policy. What is he talking about? We did not fire the employee. We just had a friendly chat with our competition. Answer→

Quirky Question # 156, Resignation for Good Reason

Quirky Question # 156

One of our key executives recently resigned. Under the terms of his contract, he had the right to resign for “good reason.” He claimed that due to certain financial restructuring our company underwent, his job was going to change significantly. Even if his supposition was correct, didn’t he have to wait until these events played out?

We checked his contract and the “good reason” provision is pretty employee friendly. The agreement states that his conclusion regarding “good reason” is entitled to deference from the company. Does that mean we have to accept any justification he advances?

As you likely suspect, if he resigns for good reason, he gets a substantial severance package. This too troubles us since he apparently resigned so he could accept a more highly compensated position with a friend of his at another company. This just isn’t passing the smell test for us. Do we have a reasonable chance of challenging him on these issues? Answer→

Bawdy Behavior Outside of Work, Quirky Question # 151

Quirky Question #151

We have several employees who periodically engage in somewhat bawdy behavior outside of work. (Surprise, surprise, sometimes alcohol is involved.) We don’t believe this behavior is consistent with the image our company would like to project. Can we discipline these employees for their conduct (which invariably is reported back to us)? Can we fire them?

Answer→

Firing Convicted Sex Offender, Quirky Question # 148

Quirky Question # 148:

Here’s a question that you may have addressed in the past. Unfortunately, the situation arises periodically and we’re still not sure how to handle it.

We recently learned that one of our employees is a convicted sex offender and is registered with a state agency as such. We want to terminate his employment. Will we be risking liability if we do so?

Answer→

Closely Held Companies and Lifetime Employment, Quirky Question # 143

Quirky Question # 143:

I read with interest your analysis of QQ # 140, dealing with closely held corporations.  We are in a similar situation, though we have the sticky additional issue you referenced of the matter involving a family member.  This person claims she is entitled to “lifetime” employment.  Given that she’s only in her late 40s, that’s a daunting prospect.  Moreover, as her siblings will attest (if forced), she simply is not competent.  Does the company really have to employ her for the next several decades? Answer→