This is part of a “hands on guide” to assist you in the legal discipline and discharge of employees as presented by Fort Wayne Business Attorney Loren Allison, covering the following topics & more! Download your copy by clicking here (PDF)
MINIMIZING THE RISK OF LITIGATION AFTER TERMINATION
Just because a person has been terminated does not mean the company will not receive some mail from or about that person. For example, you may get: (1) a letter from the employee; (2) a letter from an attorney and, if the employee does not immediately get a job; (3) a request for information from prospective employers or (4) a request for unemployment. Each of the four types of correspondence deserves its own distinctive response.
1. Letter from the Employee
a. Proceeding in the Face of a 22-6-3-1
“Service Letter Request”
I. If there is no written application, there is no legal requirement to answer.
ii. I.C. 22-6-3-1 requires that the service letter state the:
a. Nature and character of services rendered;
b. Duration of employment; and
c. Reason for termination.
Courts have found the answer to be libelous, if false.
Indiana has a “blacklisting” statue which makes it a Class C infraction for an employer to prevent a discharged employee from obtaining employment with any other employer. Moreover, the statute provides that any attempt to prevent a former employee from obtaining employment elsewhere may result in the employer being liable for compensatory and punitive damages to the former employee.
Though the statute was amended to make employers “immune from civil liability” for the disclosure of information regarding current or former employees, another amendment to the statute provides that current or former employees who have applied for employment elsewhere have the right to request disclosure from a prospective employer of “any written communications from current or former employers that may effect the employee’s possibility for employment with the prospective employer.”
Therefore, employers must assume that whatever they write about an employee will end up in that person’s hands, and potentially the hands of their lawyer. This will enable the employee and attorney to scrutinize the documents and determine whether there is a foundation for a civil suit and a means of circumventing the immunity.
2. Letter from the Employee’s Lawyer
Turn such a letter over to your counsel because the real reason a lawyer is writing your company is because they are advising their client to sue.
3. Request for Information from New Employer
a. “Neutral Reference” Policies
Some employers have “neutral reference” policies which typically mean that they will only confirm the dates of employment and the job classification of the job applicant. The reason for such a policy is to avoid unnecessary legal entanglements that could result from a disgruntled former employee filing a discrimination charge or defamation suit alleging that he/ she was denied employment as a result of an unfavorable and/or untrue employment reference. The disadvantages of such a policy is, of course, that it largely negates the significance of the reference check as a whole. Frequently, having the employee’s written authorization to release certain specified information will persuade an employer to be reasonably candid and give more than a “neutral” response to prospective employers.
b. Job References
A policy concerning what information will be released to prospective employers who contact the former employer for a job reference should be established. Anyone who is in a position to receive a call from a prospective employer should be told in advance precisely what information, if any, will be given.
Remember, a favorable job reference may be used by a discharged employee to prove that his/her performance was satisfactory and that his/her firing was, therefore, improper. Be careful!
4. Unemployment Compensation
First, what the former employee himself states as the reason for termination can be of vital importance in subsequent legal proceedings. Often, a former employee can be discredited by statements made in an effort to obtain unemployment compensation where the employee subsequently attempts to deviate from what he/ she said at that time.
Second, what the employer states as the reason for termination is just as important for precisely the same reason. Just as with the termination papers mentioned earlier, it is imperative that the reasons set forth by the employer be reasons that can be lived with in the event litigation should ensue.
Third, an unemployment compensation hearing can be a useful tool as a means of “early discovery” to find out precisely what the former employee’s position is. Again, use it as a deposition/fact-finding conference.
While technically not material in any subsequent proceeding, a decision favorable to the employer by an unemployment tribunal may be of some value in persuading a subsequent finder of fact to rule for the employer again.
Article by Loren K. Allison, attorney at law
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