Hiring and Firing

The professional service industry is changing. Many firms are cutting back on staff, and some are doing it in a way that makes employment practices claims inevitable. The few firms that are hiring have become far more selective. This selectivity often includes inappropriate or illegal recruiting and interviewing activities, and that is when trouble starts.

The hiring and firing of employees can generate employment practices claims. Terminations often result in claims; selecting new employees carefully can reduce this risk. Your recruiting process is doubly important because it can also be a direct source of employment claims. In addition, how you hire and fire personnel influences the workplace environment. A firm’s mishandling of either end of the employment process could affect the attitudes, and litigious tendencies, of a firm’s staff.

Recruiting and Interviewing

All applications and an employer’s suggested interview format should be reviewed for compliance with federal and state regulations. The following comments will apply to most organizations in most jurisdictions.

The key to properly structuring employment applications and interviews is to focus entirely on job-related questions and criteria. This is one of the reasons that there should be a job description defining the essential functions of every job. The law does not specifically forbid the asking of any type of question. What is forbidden, however, is the use of any information gained that is not job-related. Any time questions are asked that are not clearly job-related, this can be offered as evidence that discrimination occurred.

Any written application form should have a section that states that if the applicant accepts employment, it will not be on a contractual basis for a specific duration, and the employer can discharge the employee with or without cause at any time for any non-discriminatory reason. This is the basis of “at-will” employment. (“At-will” is the legal concept used by an employer to be able to terminate employees at any time if there is no employment contract in place; on the other hand, an employee can leave at any time without notice.) It is most effective to make this a disclaimer section preceding the applicant’s signature.

The written application should have an authorize-and-release provision that authorizes the employer to perform drug testing, check references, and conviction records (when job-related) and provides immunity from liability for obtaining and appropriately using personal information.

Certain types of questions should never be asked, including questions about age, religion, national origin, financial and marital status, family plans, child care arrangements, prior workers’ compensation claims. and general health. You may inquire as to the ability of the applicant to travel or work overtime, but such questions must be carefully worded so as not to deter applicants whose religious beliefs prevent them from working on certain days. You must make it clear that accommodations will be made to resolve scheduling problems.

Interview questions should focus specifically on the applicant’s ability to successfully perform the duties inherent to the position. Interviewers should be aware of what constitutes an inappropriate or unlawful question. Use performance-based questions such as:

  • What were your successes and failures in your last job?
  • What do you think led to your company’s growth or downsizing?
  • I notice you have been out of work for several months. Why is it taking you so long to find a position and what have you been doing?
  • What do you seek in your next job that was missing from your last one? What were the limitations?

Never conclude an interview with a promise of employment or longevity if an offer is accepted. Even the most casual comments may be interpreted as offering a guarantee of job security.
Put offers in writing. Clarify the details of your offer and confirm the candidate’s understanding of the offer; confusion leads to claims. Include the following information in the offer: performance expectations, salary or wages, benefits, relocation allowances, conditions (i.e., drug testing or medical exam), starting date, and deadline for accepting the offer. Clarify that employment is “at-will” and that the offer letter is not a contract for employment. Notify the prospect that employees are given a 90-day probationary period and will be presented with an employee handbook outlining their rights and responsibilities.

Terminating Employment or Accepting Resignations

More than 50% of employment practices claims against design firms arise from alleged wrongful termination based on gender, race or age. This risk is magnified because of the very nature of providing professional services. Firms staff up for a project and usually have a reduction in their workforce once a project is completed. In the past, such shifts were seen as normal; now the possibility of a wrongful termination suit is quite high.

To prevent employment practices claims that can sap productivity and firm assets, keep the following in mind:

  • A reduction in force should proceed from an initial financial analysis—showing the need for the reduction—through an objective job function analysis to the decisions regarding which positions can be eliminated.
  • When layoffs are unavoidable, the entire program must be reviewed in light of identifying any disparate impact on older employees or any other protected classes.

Firms should properly document lay-off decisions so that they can prove that the action was fully justifiable and that the firm would have taken the same action, notwithstanding the age, gender, or race of the employee, because the motivation behind the termination was a business necessity. In addition, no termination should take place without an exit interview. This gives the firm another opportunity to discuss the reasons for the employee leaving and to document the discussion. With an involuntary termination, such as a lay-off, it is important to reiterate the firm’s reasons and to have the employee sign a standardized exit form acknowledging the discussion.

Many firms have employment practices that could generate claims, lead to an uneasy employment relationship, or establish grounds to claim wrongful termination. As in all employment matters, a rational basis for actions and consistency in the application of employment policies are both prudent and demanded by the law.

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