Author: Daniel A. Lublin
Poor performance is not cause for dismissal
“Criticism may not be agreeable, but it is necessary.” – Winston Churchill
This is as true in law as it is in life, except that in employment law there is always an exception. Here is a sampling of some of the questions my readers frequently ask and the answers I often provide.
Letters of reference. There is no entitlement to a letter of reference, no matter how long or commendable your service was. However, the refusal of an employer to provide one can be grounds for additional severance. This is because there is an obligation to assist you in finding another job. If your employer deliberately departs from that standard and your period of unemployment has been extended, a court may intervene.
Performance appraisals. Can a poor appraisal be used against you? When assessing merit, your appraisals matter. When assessing severance, they are generally irrelevant. Therefore, stars and incompetents should receive the same payouts. This is because poor performance is rarely cause for dismissal. Similarly, there is no such concept as “near cause”, which means that there is no correlation between your level of performance, or lack thereof, and the quantum of severance you will ultimately receive. If you are fired and it relates to performance, you should receive the same severance as if did not.
Restrictive covenants. Very few employees will be held to a non-compete agreement, no matter how appropriately the clause was drafted. This is because that, outside of a few key individuals, it is unfair for employers to prevent former employees from working where and for whom they so desire.
What about non-solicitation clauses? These are a different story. Courts have consistently upheld agreements not to solicit former clients or employees after you leave, despite how important you may or may not have been.
Employment contracts. If there is a written contract, it must meet a number of tests. The employee must, at least, have been given the opportunity to negotiate or those terms that are punitive may not be enforced later on. This rule also applies during the course of employment, except that something of greater value must also be offered, such as a raise or a promotion. Otherwise, the courts have reasoned, an employer could unilaterally impose new terms, and an employee would be left without the leverage to negotiate or refuse.
Resignations. A voluntary resignation can be a double edged sword. If you provide advance notice of your resignation and your employer immediately asks you to leave, you are entitled to pay for the period of time you were prepared to work. However, if you immediately leave without providing notice of your resignation, your employer may be entitled to pay for the period of advance notice that you ought to have provided.
Policy manuals: An employer’s strict reliance on the terms and conditions in a policy manual can sometimes be a sham. Rules and regulations found in manuals are only valid to the extent they are known, have been properly distributed, previously relied upon or expressly agreed to. Judges have found that, if an employment contract cannot generally be altered after employment begins, the same rule should extend to policy manuals. Few employers will agree but in court a case is never open and shut.