Been Sued Lately?

Mike Harden | | Making Unpopular Decisions, Solving Problems

In my 38 years of experience, I have been sued by disgruntled ex-employees more times than I can count. Usually, it was for some kind of “wrongful termination” or some other similar reason. And I can say that in each case, the suit was bogus. We live in a litigious society, and business is just a reflection of that culture. So CEOs often find themselves being sued whenever they let an employee go. Even if you are in an “employment at will” state, it doesn’t matter. If an employee is pissed off at you, they can find an ambulance chaser to write you a letter on their law firm’s letterhead, hoping you will at least write a check to get them off your back and avoid the cost of a court appearance and a full blown hearing.

Interestingly enough, most terminated employees don’t sue for the money. 

They sue you because they are angry and they want to exact some revenge (or justice, as they see it).

This problem is so pervasive, that I brought in some labor attorneys to speak with my CEOs and their C-level executives about this. To give them a plug, it was Jackson Lewis LLP.

Here is what these attorneys told my CEOs: Terminated employees typically seek out attorneys as an emotional decision, not a financial decision. And here are some of the reasons that drive them to attorneys:

  • The “Perp walk” – This is where you have the terminated employee pack up their personal belongings in a box, and march them through the office with an escort, passing all their friends and co-workers in a gauntlet of humiliation. It wasn’t enough that they got fired, but now they have to endure this embarrassment in front of their colleagues. It’s almost as if you are rubbing their noses in it, adding insult to injury.
  • Different treatment for the same offense – This is where the employee feels that they got fired for something that others got away with. When you single out an employee to “set an example” and terminate them for conduct that others have been getting away with for years, get ready for an angry ex-employee seeking justice for themselves.
  • Humiliating or surprising performance feedback – This is when you terminate the employee for a performance issue, but never mentioned it to them before this. In fact, in many cases, their previous performance evaluations were pretty good, giving no indication of any problems. The termination comes as a complete surprise. In some cases, to reinforce your termination decision, you go a little overboard and really give them a terrible, and perhaps humiliating, performance review.
  • Challenging unemployment or vacation pay – You terminate the person, and then fight relentlessly to prevent them from collecting unemployment. Or maybe you tried to withhold some of their vacation pay. In either case, a person who was terminated and might have gone away quietly, now is pushed into a battle they probably wouldn’t have considered.
  • Personal dislike for a supervisor – Sometimes, it just boils down to the employee disliking the supervisor so much that he/she feels compelled to take some kind of action against that supervisor (which means they sue your company). If a supervisor and an employee have a bad relationship, when the employee is ultimately fired, the hostility doesn’t go away…it just continues into court.
  • General feelings of unfairness – When a terminated employee feels that their treatment was unfair, regardless of how or why, they are often compelled to teach you a lesson and get some of that justice they keep obsessing about.

All of these emotional reasons can be avoided. They are self-inflicted wounds that we pay for, in money, time, emotional energy, and employee morale.

As a CEO, you need to make sure that your managers know how to treat employees, particularly when they are being terminated. Everyone should be treated the same, and no employee should ever be surprised with a bad performance review at termination. Don’t add insult to injury, and always treat terminations with class and empathy. If you can do this, you won’t eliminate all lawsuits, but you should be able to greatly diminish the number.

Mike Harden

Mike Harden has developed exceptional depth and breadth of knowledge over his 40+ year career as an entrepreneur, executive, teacher, mentor, and coach. Today, as one of DC’s premier Executive Coaches, Mike helps good executives become great leaders. Find Mike on Google+

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