Common Performance Review Distortions and Retaliatory Decision-Making that Leads to Wrongful Termination and Retaliatory Termination Lawsuits

by Patricia Eyres, Managing Partner Eyres Law Group, LLP

There are many bases for claims of wrongful termination under California law. The types of claims range significantly and fall into two broad categories:

1. Discrimination based on protected characteristics under federal and California law: gender, sexual orientation or gender identity, race, religion (including dress and grooming practices, national original, ancestry or Citizenship, age (over 40), pregnancy or childbirth, physical, mental or special education disability, and more. Claims often result from a termination based on an adverse performance evaluation, where the allegation is that the evaluation was grounded on discrimination rather than the employee’s actual performance.
2. Retaliatory termination based on the employee’s exercise of protected statutory rights and CA public policy, including requesting or taking a leave of absence protected by law, requesting a reasonable accommodation, opposing unlawful or unethical activities, whistleblowing activities based on safety issues, and more. Claims often result from a termination that is allegedly “pretextual,” where the reasons given for the termination are not the “real reason;” but rather a pretext for discrimination or retaliation.

Terminations Following Adverse Performance Evaluations

Incomplete, inaccurate, vague, and subjective performance evaluations are common in many organizations. Unfortunately, they are also the incriminating evidence in any resulting wrongful termination or discrimination case. While no supervisor or manager should give an unproductive employee ambiguous feedback simply to avoid a possible lawsuit, managers must be mindful of the legalities of their performance management practices.

Should a former employee file charges against your public agency, your performance management documents can either make or break your defense. With that in mind, are your supervisors and managers keeping accurate and detailed performance appraisals for every employee? Would your evaluation or performance improvement plan on file adequately defend your decision to terminate, transfer, or demote an employee?

1. Inadequate Preparation. Supervisors often feel they have too much to do and insufficient time. Since performance appraisals are neither intellectually challenging nor enjoyable, many supervisors procrastinate doing the paperwork. As a result, the appraisals lack attention to important details such as language and consistency and are often void of complete descriptions of the employees’ work performance. Without concrete examples and detail, the terminated employee then asserts that there were discriminatory reasons for the adverse action rather than solid performance observations. Supervisors should plan ahead and take the necessary time to perform and document appraisals.
2. Lack Of Clear Standards. Clear, measurable performance standards are essential for accurate and legally defensible performance appraisals. Objective standards, communicated clearly and consistently to employees, are the only way to ensure that employees understand what is expected of them. Clear standards apply to specific and significant tasks of the position, reflect acceptable or satisfactory levels of performance, are expressed precisely, focus on critical and specific aspects or features of performance, and address both measurable performance criteria (such as production goals) and elements of judgment and initiative. Without clear standards, it leads the terminated employee to assert that they had no idea what was expected of them and that their gender, age, race, disability, or other protected characteristic was the overriding factor in dismissal.
3. Inconsistency In Ratings Among Supervisors. Employees frequently allege employment discrimination when supervisors reprimand or discipline them for infractions that other employees routinely get away with. Sometimes this occurs with the same supervisor, but more often, it results from different perceptions among supervisors about what constitutes acceptable performance. Supervisors should clarify performance standards for like jobs to achieve a consensus regarding performance-rating definitions. Without this clarification, terminated employees generally contend, “I was treated differently because of my … gender, race, religion, etc.
4. Rating Personality Rather Than Performance. Supervisors may respond quickly or strongly to personality traits, such as aggressiveness, that prevent them from objectively evaluating performance. The appraisal should focus only on actions, accomplishments, and specific instances of unacceptable performance. Otherwise, it leads to adverse actions that may inadvertently be based on differences in cultural backgrounds or life experiences that overlap with protected characteristics.
5. “Contrast Effect.“ The exceptionally good (or bad) performance of one or more employees may significantly distort the evaluations that others receive. While contrasting the relative contributions of a group of employees contributes constructively to the appraisal performance process, the rating of one employee should not shift the ratings for others except in extraordinary circumstances (such as a limited bonus pool). This often leads to claims of favoritism based on diverse characteristics, which in turn brings up potentially discriminatory decision-making.
6. Inadequate Observation. Supervisors not thoroughly familiar with all aspects of an employee’s performance may feel compelled to complete standardized forms completely. Such supervisors should not conduct the appraisal, as they are often unable to arrange for sufficient observations or to completely review written reports or other work the employee produces. Let supervisors know they can ask for help with appraisals when needed to reduce the risk of subjectivity that is not job-related and assumptions about the employee that are based upon personal characteristics, many of which are protected characteristics under California law, from gender to nationality, race, religion, and even disability.
7. Overemphasis On Uncharacteristic Performance. Unusual behavior is often more memorable than typical behavior. Supervisors observing behavior that seems uncharacteristic should try to determine whether it is part of a pattern or is related to a medical problem or disability.
8. Unduly Negative Ratings. Sometimes supervisors deflate an employee’s performance rating because they believe the employee will benefit from a “push.” Other times they are attempting to subdue a troublesome employee, using fear as a motivation to improve, encouraging a problem or marginal employee to leave, developing a pre-textual reason for dismissal or discipline, creating a record to justify a discharge or “covering-up” performance problems of other employees or problems within the supervisor’s department.
9. Inflated Ratings. When supervisors are uncomfortable being candid with an employee for fear of discrimination charges, they may inflate the employee’s performance rating. To make the appraisal easier, keep a file of work samples, reports, or information that reflects performance results during the rating period. Other reasons for inflating ratings include: boosting an employee’s spirit or encouraging a marginal employee to work harder, avoiding confrontation with a hostile employee or avoiding claims of discrimination, getting difficult employees transferred out of the department, boosting the relative rankings of their subordinates or department vis-à-vis other departments, to keep from revealing the department’s problems to management, or to save time and avoid the level of documentation required to support performance appraisals that might trigger discipline and/or dismissal.
10. Subjective Language In Written Appraisals. Even carefully constructed written appraisals may contain language the courts could misconstrue during a trial. Sometimes assumptions about people based on their personal characteristics invade the appraisal process. Even when the comment is “positive,” if it references gender, age, or other characteristics, it may reveal a mixed motive.

Educate your supervisors and managers about the legal liabilities their performance management practices could provoke so you can lessen your public agency’s chances of being sued. The less time your public agency’s supervisors and managers spend in the courtroom, the more productive they’ll be.

Wrongful Terminations Based on Retaliation

Federal and California employment statutes define retaliation as a separate form of wrongdoing. Individuals who report or complain about any kind of discrimination or harassment in their workplace or who participate in good faith in the investigation of a complaint are protected from reprisals or punishment for their “protected activity.” “Whistleblowers” who report suspected illegal or unethical practices are also protected if their employers later punish them without justification. Finally, workers who request or take job-protected leaves, and those who seek a reasonable accommodation for a disability, can’t be penalized for doing so. Such punishment or reprisals constitute unlawful “retaliation.”

There are three primary categories of “protected activity” that shield employees from retaliation:

1. Participation: Making a complaint or participating in an internal or external investigation or proceeding addressing rights to be free from discrimination or harassment;
2. Opposition: Opposing illegal, unethical, or unlawful activities in the workplace or “whistleblowing” to a government enforcement agency; and
3. Requesting or Exercising Protected Rights: Asking for a reasonable accommodation, leave of absence, questioning wage practices, or exercising rights under the Labor Code.

If the employee has a reasonable, good faith belief that the employer is doing or has done something “wrong” (legal, ethical, policy violation, or contractual breach), and the employee’s response to the wrongdoing is reasonable, the law will protect that employee from retaliation.  This is so even if the employee’s allegations ultimately are not substantiated. Truthfully raising an issue, making a complaint, or participating in any proceeding (internal or external) is absolutely protected. Reason: an employee’s concern about whether he can “prove it” may chill the exercise of rights and violates public policy.

Accordingly, a good faith complaint is sufficient to protect against retaliation. Knowingly false complaints may still be dealt with appropriately. But be careful when determining whether a complaint is knowingly false or mistaken but in good faith because a neutral and well-documented investigation will be crucial if later sued.

“Adverse action” is any action by an employer that “well might have dissuaded a reasonable worker from making or supporting a complaint.” Adverse actions taken without any legitimate, demonstrable business purpose that may constitute retaliation include:

• Unfavorable performance review that results in termination
• Negative or abusive treatment by supervisors or managers
• 3 “D’s” – Discipline, Demotion, Discharge

Successful claims for retaliation carry with them “make whole” remedies. These remedies can include, but are not limited to, reinstatement of employment, reversal of a demotion, payment of back wages, reinstitution of benefits, purging personnel files of any adverse memos or letters, a cease-and-desist order, and the posting of a notice in the workplace.

Under the California Fair Employment & Housing Act, the terminated employee can – and often does – recover significant monetary damages. Damages include but are not limited to lost wages, emotional distress damages, and reasonable attorneys’ fees if they prevail on any aspect of their claim. However, when an employer successfully defends against such claims, it cannot recover any attorneys’ fees unless it proves the action was “frivolous.” Since “retaliation” is often subjective and “intent-driven,” the frivolous standard is almost impossible to meet.

What Can Employers Do to Minimize these Risks?

When front-line leaders don’t know how to respond to internal employee complaints, leave requests, or questions about wages or benefits, they often react in ways that breed retaliation claims. To properly guide those leaders and minimize such claims, employers must:

1. Educate your performance evaluators, including front-line supervisors, on the importance of solid performance evaluations if they inevitably lead to dismissal. Many unknowingly distort performance reviews, which could ultimately hurt the public agency in a legal battle. When you know why such distortions occur, you can take the necessary steps to rectify the situation, practices, and procedures.
2. Beef up policies and emphasize consistent enforcement.
3. A policy is ineffective without training leaders about what the law and your policies mean and how they should be applied. Repeat and refresh training often, making sure your leaders understand the scope of potential types of retaliation claims.
4. Focus on the variety of potential retaliation situations and provide specific direction on how to respond when a worker brings an issue to their attention.
5. Make sure your leaders know when and where to seek help, and feel free to do so.
6. Emphasize the importance of appropriate communications and remind managers that a single intemperate text or e-mail can derail your defense and “e-nail” your district in the courtroom.

Wrongful and retaliatory termination claims are preventable, but doing so takes consistent processes, concrete policies, relevant training, and uniform enforcement.

To assist with employment practices issues such as the ones discussed above, GSRMA offers our members a free Labor Law and Employment Practices Hotline. To learn more about this program, Contact us today