PRUDENT HIRING AND
TERMINATION PRACTICES -A LAWYER'S PERSPECTIVE
C. Clayton Gill
SHRM 2012 Employment Law
& Legislative Conference
September 14, 2012
Moffatt Thomas
Prudent Hiring Practices
What To Avoid -- Discrimination,
Discrimination, Discrimination
 Create hiring practices that do not
discriminate against protected classes

Race, religion, gender, national origin, age,
disability, military service, pregnancy
 Disparate treatment vs. disparate impact
 Focus on the qualifications that are
necessary for the job

Job descriptions
What Is Disparate Impact?
 A policy that is neutral on its face, but as
applied discriminates against a protected
class
 E.g., a pre-employment examination in
which one race performs better than
another
 Critical factor is business necessity, is
there a correlation between test results
and job performance?
What Is Disparate Impact?
(cont’d)
 Legal analysis -- employer must prove
that challenged practice is job related for
the position in question and consistent
with business necessity

Legislative History of 1991 Civil Rights Act
-- employer must show that the policy or
practice bears a demonstrable relationship
to successful performance of the jobs for
which it was used and measures the
person for the job and not the person in the
abstract
Questions To Avoid When
Interviewing An Employee
 Economic status (race discrimination)
Credit rating, prior bankruptcy, car ownership,
rent or own home, past garnishments
Marital status (religious discrimination, sex
discrimination)
Child-care provisions (sex discrimination)
Arrest records (race, national origin discrimination)
Pregnancy and future childbearing plans (sex
discrimination)
Physical or mental disabilities (disability
discrimination)
Height and weight (sex discrimination, national
origin discrimination)
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Questions To Avoid When
Interviewing An Employee
(cont’d)
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Discrimination claims or employment claims
against prior employers (retaliation)
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EEOC Retaliation Guidelines -- "There is no
requirement that the entity charged with retaliation
be the same as the entity whose allegedly
discriminatory practices were opposed by the
charging party. For example, a violation would be
found if a respondent refused to hire the charging
party because it was aware that she opposed her
previous employer's allegedly discriminatory
practices."
Unless... (the exceptions)

You can tie the question or inquiry to the
applicant's ability to do the job
 E.g., working on weekends if accommodation
for a religious need creates undue
hardship (small employer)
 E.g., the job requires certain physical
requirements (but beware of ADA issues)
 E.g., the job puts the employee into a position
of trust and confidence

Inquiry should focus on prior dishonest acts
Background Checks
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Fair Debt Credit Reporting Act
Criminal History
 EEOC regulations state that an arrest is not
evidence of criminal conduct and, thus,
refusal to hire because of arrest history
alone is not job related (but you may refuse
to hire based upon conduct associated with
an arrest if such conduct would impair the
applicant's ability to do the job)
Background Checks
(cont’d)

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Unless you can prove a correlation between the
criminal conviction in question and job performance,
you should consider these three factors when
evaluating an applicant's prior criminal history
(EEOC's "Green Factors"): (1) the nature and gravity
of the offense; (2) the time that has passed since the
offense or conduct (rule of thumb -- 10 years is too
long); and (3) the nature of the job for which the
applicant has applied
The EEOC prefers that the candidate be given notice
of their prior criminal conduct, your reasons why their
criminal history should exclude them from
consideration, and give them an opportunity to refute
your reasons for excluding them from consideration
Background Checks
(cont’d)
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Be prepared to prove that criminal history check is job
related for the position in question and consistent with
business necessity (child care, elderly care, care of
other vulnerable people, public transportation,
positions which impose duties of trust and confidence)
 EEOC standard -- criminal conduct that
disqualifies a candidate from the job must bear a
demonstrable relationship to successful
performance of the job in question.
The EEOC regulations state, "the Commission
recommends that employers not ask about
convictions on job applications and that, if and when
they make such inquiries, the inquiries be limited to
convictions for which exclusion would be job related
for the position in question and consistent with
business necessity"
Background Checks
(cont’d)
To avoid disparate impact claims, do
not automatically disqualify candidates just
because they have a criminal history (unless
you can prove a correlation between the
crime and job performance or the law
prohibits you from hiring someone convicted
of a particular crime)
 Be consistent in your requests for background
checks (disparate impact)
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Drug Tests

Employer should ensure that all applicants are subjected
equally to any drug test (disparate impact)
 If you subject applicants to drug tests, you should implement a
written drug policy that is consistent with the Idaho Employer
Alcohol and Drug-Free Workplace Act (Idaho Code
Sections 72-1701 through 72-1717)
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Any drug test must comply with the ADA
Employer should pay for the test to receive the liability
protections of the Act
Drug test must be in writing to enjoy the liability protections of
the Act
Ensure that the entity conducting the test complies with the
applicable statutory requirements (Idaho Code
Section 72-1704)
Must notify prospective employee of any positive drug test and
the right to request a retest at the prospective employee's
expense
Ensure confidentiality of any test and the results of the test
Suggestions for Prudent
Hiring Practices
 Define the essential qualifications necessary for the job
 Use questions that help you find the candidate with the
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best qualifications for that job
Be careful of personal chit-chat related to religion,
medical conditions, or family
Be prepared to defend why you ask the questions
that you ask (business necessity)
Evaluate any pre-employment tests or background
checks to ensure they do not disparately impact any
protected class
 Avoid pre-employment tests that automatically
disqualify a candidate
Be prepared to defend why you hired the candidate you
hired versus the other candidates
Be consistent in your hiring criteria
Prudent Termination Practices
The Law
 At-will employees can be terminated at
any time, with or without cause and with
or without notice, so long as the reason
for the termination does not violate
public policy
 Employees under contract for a defined
period of time can only be terminated in
accordance with the terms of the
contract (progressive discipline also a
factor)
The Law (cont’d)
 You cannot terminate any employee (both at-will and
term) for any of the following reasons:
 Because of protected status
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Color
Race
National origin
Gender
Religion
Age
Disability
Service in military
Pregnancy
Genetic Information
The Law (cont’d)
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Because they engaged in a protected
activity (retaliation)
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Made a complaint of unlawful discrimination
(reasonable belief standard)
Requested or took FMLA leave
Requested or have been provided an ADA
accommodation
Requested or taken military leave
Filed for bankruptcy
Serving jury duty
The Law (cont’d)
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Wages have been garnished
Union membership or union activity
To prevent employee from vesting in a
retirement plan or other employee benefit
plan
Because employee’s medical condition or
a qualified family member’s health
condition will increase the cost of your
company’s group health care insurance
plan
The Law (cont’d)
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Because of fear that employee may
come down with a serious medical
condition that may affect their work
performance (e.g., cancer)
Because employee filed a workers’
compensation claim
The Law (cont’d)
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Because employee provided testimony or other
evidence in a legal proceeding that was adverse to
company’s interest (but they should not be
releasing confidential or privileged information
unless compelled by court order or permission from
you to do so)
Because employee complained of unlawful activity
by company
 Misuse of public funds
 Company making false, misleading statements to
government
Because employee refused to a commit crime at
your request (e.g., perjury)
The Easy Termination
(Green Flag)
 Not in a protected class
 Poor performer
 At-will employee
The Cautious Termination
(Yellow Flag)
 Employee hired for term
 Termination for cause
Special Things To Consider
Before Terminating Any
Employee Hired for Term
 Do you have grounds to terminate for
cause?

Look at the employment contract
 Make sure you have complied with the
terms of the contract, i.e., do you have
cause to terminate and have you
complied with contractual progressive
discipline procedures
The Challenging Termination
(Red Flag)
 Member of a protected class (e.g.,
minority, female, 40 years or older,
disabled, pregnant, recently discharged
from military service)
 Recently engaged in a protected activity
(sexual harassment, request for disability
accommodation, taken or requested
FMLA leave or military leave,
complained of other unlawful
discriminatory activities)
The Challenging Termination
(Red Flag) (cont’d)
 Employee that is close to significant
vesting period for retirement or other
employee benefit (ERISA)
 Employee who has recently filed a
workers’ compensation claim, provides
testimony in a legal proceeding that was
adverse to company’s interest, or made
a complaint, either internal or external,
that company engaged in unlawful
conduct
The Challenging Termination
(Red Flag) (cont’d)
 Long-tenured employee

Why did you continue to employ that
person for all those years if he/she was a
poor performer?
 Layoffs because of an economic
downturn (RIF)
Common Themes To Consider
In Any Termination
 Use common sense
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Poor performance
Bad acts by employee
Bad attitude, constant complainer, whiner
Economic downturn (with caution)
Ways To Protect Company In
Yellow and Red Flag
Termination Scenarios

At least annual performance reviews
 Candid responses in performance reviews
 Written performance reviews
 If employee has performance issues, attitude
issues:
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Notify employee in writing of the performance issue
Notify employee of the corrective action they must
take to fix the performance issue
Notify employee in writing of date by which they
must correct the performance issue
Ways To Protect Company
In Yellow and Red Flag
Termination Scenarios (cont’d)
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Notify the employee in writing about what
you will do if they do not correct the
performance issue
Have employee acknowledge in writing
that they received the written warning and
notice of what will happen if employee
does not correct the performance issue
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If they will not sign written acknowledgment,
then make a contemporaneous written note
that the employee refused to do so
Things You Will Want To Prove
In Any Legal Proceeding
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History of performance problem(s)
Employee notified of performance problem(s)
Employee given opportunity to correct
performance issues
Employee failed to correct performance issues
What is best proof:
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Contemporaneous writings
Written acknowledgment signed by employee
Economic Downturn
 Do layoffs disproportionately impact a
protected class?
 Common sense – what business
reasons did you consider when selecting
the employees you chose to lay off or
terminate?
Economic Downturn (cont’d)
 WARN Act – if you have more than 100 employees, you
must give 60 days’ notice of a mass layoff or plant closing
 Mass layoff:
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Layoff that affects more than 500 workers in a 30-day
period; or
Reduction in force of 50 or more employees, but less
than 500 in a 30-day period, that amounts to a 33
percent or more reduction in your workforce
Plant closing:
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The shutdown of an employment facility or operating
unit within an employment site, and
The shutdown will result in an employment loss for 50
or more employees
Economic Downturn –
WARN Act (cont’d)
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Employment loss includes:
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Termination, other than a discharge for cause, voluntary
departure, or retirement
A layoff exceeding six months
A reduction in hours of work of more than 50 percent
during each month of any six-month period
“Employment losses” within a 90-day period may
be aggregated for WARN Act purposes, if employer
cannot demonstrate that the employment losses
are the result of separate and distinct actions and
causes and are not an attempt by the employer to
evade the requirements of the WARN Act
Facts Warranting
Special Consideration
 Employee engaged in protected activity
(e.g., complained of sexual harassment)
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Timing of complaint and discharge have
legal significance
But you can always terminate at-will
employee for poor performance or other
legitimate business reason
Severance agreements:
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Must contain specific language for employees
40 and older
Facts Warranting
Special Consideration (cont’d)
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Long-tenured employee
Soldiers in first year of return to work after
discharge from military service (20 C.F.R.
§ 1002.247)
Employees who are bound by
noncompetition or nonsolicitation
agreements (exit interview)
Facts Warranting
Special Consideration (cont’d)
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Employees who are bound by
confidentiality agreements (exit interview)
Employees with ownership in company
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Are there buy-back provisions?
Are there vesting issues?
Employees who are not fully vested in
retirement plans or other employee benefit
plans (e.g., bonus plan)
How To Properly Document
a Termination
 Contemporaneous
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Document things when they happen and
not after employee brings a claim
 Just the facts; avoid unnecessary
commentary
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“This is going to be a messy one”
“This is going to hit him right between the
eyes”
How To Properly Document
a Termination (cont’d)
 Keep the facts focused on the legitimate
business reasons for the discharge
 Avoid casual conversation about
termination in e-mail dialogue
Exit Interview
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Have two company representatives present
Tell the employee the reasons they are being
terminated (all of them)
 Discuss the employee’s rights to any retirement
plan benefits
 Discuss the employee’s rights to COBRA
coverage
 Discuss any entitlement employee has to
continue insurance coverage, such as an
employee assistance program, tuition
reimbursement, flexible spending accounts, and
optional insurance
Exit Interview (cont’d)
 Discuss what your response will be to
any claim for unemployment
compensation
 Request return of all company property:
computer, cell phone, pager, other
equipment, employee ID badge,
company credit cards, parking cards,
keys to building, and other access cards
Exit Interview (cont’d)
 Give employee his or her final paycheck
to avoid wage claim
 If employee is resigning from company,
have employee state his or her reason
for leaving in writing (to avoid
constructive discharge claim)
 Make sure your IT people disable
terminated employee’s access to your
computer network
The Value of an Exit Interview
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Very valuable with respect to confidentiality
agreements and noncompetition/nonsolicitation
agreements
 Have employees sign written acknowledgment
that they have returned all of your company’s
property and that they do not have any of your
property in their possession, custody, or control
 Remind employees of their confidentiality,
noncompete, and nonsolicitation agreements
The Value of an Exit Interview
(cont’d)
 Have employees acknowledge in writing
that they will honor their confidentiality,
noncompete, and nonsolicitation
agreements
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If they refuse, then write a
contemporaneous note to the file that they
refused to acknowledge their contractual
obligations
Post-Termination Retaliation
Claims
 Title VII’s anti-retaliation protections extend to post-
employment adverse actions, such as adverse job
references
 Robinson v. Shell Oil Co., 519 U.S. 337, 345-46 (1997);
Hashimoto v. Dalton, 118 F.3d 671 (9th Cir. 1997)
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“Examples of post-employment retaliation include
actions that are designed to interfere with the
individual’s prospects for employment, such as giving
an unjustified negative job reference, refusing to provide
a reference, and informing an individual’s prospective
employer about the individual’s projected activity.”
EEO Retaliation Guidelines, vol. 2, § 8-II.D.2
 Libel and Slander, Tortious Interference
For Further Information or
Questions, Please Contact:
C. Clayton Gill
Moffatt, Thomas, Barrett, Rock &
Fields, Chartered
101 S. Capitol Blvd., 10th Floor
Post Office Box 829
Boise, Idaho 83701
ccg@moffatt.com
208.385.5478
1.800.422.2889