Employers often attempt to “soften” termination decisions made for performance or disciplinary reasons, by couching the termination in ways that do not reflect the actual motivation for the decision made. While done with good intentions, these decisions can lead to legal problems due to later inconsistencies in the employer’s story. In a new case from the Fourth Circuit Court of Appeals (which includes North and South Carolina), Holland v. Washington Homes ,Inc., the employer barely avoided a jury trial due to its fudging of the facts surrounding the plaintiff’s termination.
In this case, the plaintiff was an African-American salesperson who was fired after physically threatening the employer’s Vice President. However, the employer’s termination documents showed (1) that the plaintiff was actually fired four days after the alleged termination conference; and (2) the employer’s response to the plaintiff’s unemployment filing stated that he had been let go due to lack of work. The plaintiff claimed that these inconsistencies were evidence of pretext that should allow his claims of race discrimination to go to the jury. The defendant responded that the reasons for the noted inconsistencies were (1) an attempt to allow the plaintiff’s 401(k) account to fully vest by delaying his actual termination a few days; and (2) an effort to allow him to collect unemployment benefits.
In a 2-1 decision, the Fourth Circuit affirmed summary judgment for the employer. Even though the court noted the inconsistencies between the employer’s version of events and its documentation, the plaintiff lost the case because he never introduced any evidence showing that the employer’s reasons for the inconsistencies were false. In the absence of any such evidence, the Fourth Circuit found the employer’s explanation to be plausible. The dissenting judge believed that these differences between the documentation and the proffered reasons for the termination were enough to allow a jury to determine the real reasons for the termination.
Even though the employer prevailed in this case, these facts provide an important lesson for employers. Misrepresentations about the timing and reasons for termination can come back to haunt the employer, even if the documentation is altered in an attempt to assist the terminated employee. In this case, the Fourth Circuit noted that the employer may well have violated state law by misrepresenting the reasons for termination on the unemployment filing. Employers must prepare documentation that accurately shows the reasons for the action taken. Failure to do so can result in later claims that the employer is changing its story to cover up improper motivation for the employment action.