Wrongful Termination

California is an “at will” state, so you can terminate an employee at any time, for any reason or for no reason at all … right?

Wrong.

You can’t terminate someone for illegal reasons, for example, because of their race, gender, and about 15 other behaviors or characteristics which are not lawful grounds for termination.

But how does a court know your real reason for terminating an employee?

One of your managers can shoot his/her mouth off, as in the case we describe below, but there are plenty of other ways. For instance, suppose you ordinarily list the reason for termination and eligibility for rehire in the employee’s file. And then, with no other explanation to be found, you fail to include that information for one particular employee who is terminated, or enter clearly sham or unprovable info in the file. Departure from established practices at your firm might well constitute evidence of illegal discrimination.

As one employer discovered the hard way, firing a long-term employee with a history of positive performance reviews is an excellent way to get sued for age discrimination, wrongful termination and retaliation – especially if the decision to fire the employee is based on poorly documented performance issues.

Although a lower court ruled that the termination was nondiscriminatory, a court of appeal overturned the lower court’s decision because the employer could not quantify either the number of or the potential seriousness of the employee’s alleged mistakes or identify “anything like a quantitative standard to which plaintiff’s performance might be compared.” Cheal v. El Camino Hosp.

Carol Cheal worked in El Camino Hospital’s Nutrition Services Department as a Dietetic Technician (Diet Tech) from August 1987 until her discharge in October 2008 at age 61. She was responsible for preparing menus for patient meals, while adhering to hospital procedures intended to ensure that the correct foods reached the correct patients.

Up to and including her performance evaluation in August 2007, Cheal had always received the highest rating on her performance evaluations. In July 2007, the hospital hired Kim Bandelier to supervise all employees on the clinical side of nutritional services. This included Cheal, who was the oldest employee under Bandelier. By January 2008, Bandelier accused Cheal of numerous shortcomings impacting patient care.

On April 14, 2008, Bandelier gave Cheal a written warning for failure to conform to a hospital patient identification procedure. On June 3, Bandelier issued a second, “final” warning for failing to comply with the same procedure. On Monday, September 8, 2008, Bandelier accused Cheal of incorrectly preparing one or more patient menus.

On September 25, 2008, a hospital manager told Cheal that she was no longer considered competent to perform her duties as a Diet Tech, and that she could either take another position in the nutrition services department, accept a severance package or be discharged. About a week later, Cheal told the hospital that any further communication should go through her attorney.

The hospital terminated Cheal on October 10, 2008.

Cheal sued for age discrimination, wrongful termination and retaliation. The hospital asked the court to dismiss the case because Cheal failed to present any material facts to support her case. The hospital was able to prove Cheal made several mistakes between January and May 2008; thus, according to the lower court, termination was appropriate and nondiscriminatory. The trial court found that Cheal was unable to show competent performance and dismissed the case.

Cheal appealed, and a court of appeals took a closer look at the evidence presented.

Much of the hospital’s evidence suggested that the errors attributed to Cheal were unacceptably grave because they implicated patient safety. Yet, there was no effort on the part of the hospital to analyze the seriousness of the mistakes or how her performance errors compared to errors made by other employees. The appellate court found no attempt by the hospital to quantify either the number or potential seriousness of mistakes committed by other persons performing duties similar to Cheal’s, or to otherwise identify anything like a quantitative standard to which Cheal’s performance might be compared.

The only performance benchmark put forth by the hospital was a performance evaluation form, which suggests that errors of the type attributed to Cheal would be acceptable at a rate of “less than one per day.” The hospital presented no evidence that Cheal committed errors with anything approaching a daily or even weekly frequency. Using the hospital’s own performance benchmark, there was no support for the trial court’s finding that “several mistakes on menus” over a period of four or five months supports a
finding of unsatisfactory performance.

The hospital also presented evidence that Bandelier identified 19 distinct areas or incidents of unsatisfactory performance, 16 of which Bandelier labeled “coachings” of Cheal’s unsatisfactory performance. Cheal presented evidence that Bandelier’s assertions were not accurate: Bandelier’s notes were inconsistent with her statements; and the “coachings” were merely updates of information provided to all staff.

Cheal also provided evidence that Bandelier “hunted down” Cheal’s errors on her own initiative, while leaving the errors of younger workers to be discovered and reported, if at all, by others. Cheal did concede to one error she made while she worked for Bandelier.

To make matters worse, Cheal presented a declaration from Bandelier’s friend, who stated: “One evening when I was at Ms. Bandelier’s house for dinner, she said to me, ‘We shouldn’t have lunch anymore or talk socially at work … People are starting
to notice I’m favoring the younger and pregnant ones.’” (ellipsis in original, italics added).

The appellate court concluded that since Cheal had a long history of satisfactory performance, a jury could find that Bandelier’s list of supposed deficiencies had more to do with Bandelier’s attitude toward Cheal than with Cheal’s actual performance. Cheal presented ample evidence that her performance was satisfactory, including the hospital’s own policies indicating that, at worst, she committed far fewer errors than might be anticipated, and deemed acceptable, in another person performing her duties.

The court held that the hospital cannot simply articulate a legitimate reason for terminating Cheal as a defense against a discrimination lawsuit. The hospital must be able to show that Cheal’s allegations cannot support her claim of discrimination.

• Training supervisors on properly completing employee evaluations and performance reviews.
• Ensuring employee counseling sessions are properly documented and include a witness to verbal conversations so accurate records are maintained.
• If a new supervisor suddenly finds significant errors with a high performing long-term employee, you may need to look into it. Is there a health issue affecting the employee’s performance? Is the supervisor exhibiting a bias against the employee?
• Make sure your supervisors and managers understand your policies and train them to implement the policies consistently.

It’s a tricky area to deal with. Unless your firm is large enough to warrant hiring a full-time trained and qualified human resources manager, consulting counsel is recommended before terminating a long-term employee.

The information presented is not intended to be, and does not constitute, “legal advice.” Because each situation varies, and only brief summary information is provided here, you should not use this information as a basis for action unless you have independently verified with your own counsel that it applies to your particular situation.