Ready, aim - fire!               by Michele Donley, Crain's Chicago Business    "Hit the road Jack, and don'tcha come back     no more, no more, no more..."

   In Illinois, an employer who wants to ger rid of a troublesome employee need only sing the words of that old sad luck song - in theory, at least. State law makes Illinois an "employment-at-will" state, meaning an employer can hire or fire a worker at any time for any reason, or no reason.
   In practice, however, firing an employee may land an employer in a tangle of administrative and legal proceedings and monetary damage awards. Such awards, not to mention related legal fees, can harm small businesses financially.
   "Sure, we are an employment-at-will state. But you have to make sure you're not violating about 15 different federal or state laws that you could be accused of," says Thomas E. Kennedy, president of Chicago-based Human Resource Consultants Inc., which advises companies on employment practices.
   Employees can take wrongful firing claims to the U.S. Equal Employment Opportunity Commission or the Illinois Human Rights Commission. Cases not dismissed, settled or mediated at either of those agencies may progress to a court trial.
   Workers often challenge firings on the basis of discrimination, which can include unfair treatment based on gender, race, ethnicity, religion, age, sexual preference or disability. Some claims allege retaliatory firings, if the employee has pursued a workers compensation claim or a complaint against the company.
   Sometimes employers are hit with charges - and big bills - in situations they never would have imagined. A few examples of cases from recent years:
   • Last year a Chicago publishing company settled the case of a worker it fired after a three-day training period. The trainee telemarketer "mumbled" too much to meet the employer's standard. But the worker asserted that he mumbled because he was missing 18 teeth, which he claimed was a disability protected under law. A federal appeals court ruled the telemarketer should get a jury trial, leaving the company with legal fees and an undisclosed settlement payout.
   • A company in Florida fired a worker for bringing a loaded gun to work in his briefcase. The employee claimed that a chemical imbalance, constituting a disability, caused him to bring the weapon to work. The company eventually prevailed, but not before a trial.
   • A mine worker in Virginia was fired for missing three stretches of work because of repeat snakebites. The worker said snakehandling was part of a religious rite. His employer was ordered to pay $20,500 in damages for failing to accommodate his religious practices.
   In other cases, health conditions as diverse as personality disorders, asthma or premature ejaculation have been claimed by fired workers as conditions protected under law.
   While many wrongful termination claims are dismissed, costs in both money and time to fight the claim or comply with agency demands for information can mount quickly.
   Small and medium-sized companies, especially, can be endangered by a charge of wrongful termination because settlements or damage awards and lawyers' feed can run into tens of thousands of dollars - enough to sink many small businesses.
   Smaller companies also often lack the in-house legal or human resources expertise that big companies have.
   In this litigious age, experts say company owners no longer can rely on an informal approach to hiring and firing. Employers either need to learn about the laws themselves (some local chambers of commerce and trade associations offer workshops) or hire outside professional advice.
   "By not being prepared, knowing the state and federal regulations and how to reduce your risk, you are putting your business at risk. When an employee goes to court, a jury of their peers is usually happy to award your company's money to that worker," says Mr. Kennedy.
   Even family firms aren't immune from termination lawsuits. "Anybody that has employees could be at risk. I had one company owner come to talk to me about terminating his father. He was concerned about age discrimination," recalls Ralph A. Morris, an employment attorney with Chicago's Brittain Sledz Morris & Slovak.
   In light of the complications involved in firing, is it better to suffer with a poor employee than risk an expensive legal quagmire?
   No employer is completely protected from legal action from an angry fired worker, experts say. But there are many steps company owners can take to make it less likely that a former employee will file a claim or win damages.
   "Anybody can sue anybody...but you want to make sure you have the best defense possible," advises David E. Krchak, a partner in Champaign-based Thomas Mamer & Haughey and incoming president of the Illinois Bar Assn.'s labor and employment law section.
   Experts give the following advice to employers:
   • If there's clear reason to get rid of a worker, do so.(see "How to soften the blow when you're forced to fire") "There are offenses - theft, assault, drug use - that demand immediate dismissal," says Mr. Kennedy.
   Whether the offense is a single event or an accumulation of problems, "what the employer needs to do to protect themselves is document, document, document," says Mr. Krchak.
   • Keep detailed files on employee performance and reviews. Be specific. For instance, don't note: "Frequently late," or "Work getting sloppy." Record the dates the employee was late and how late or describe examples of sloppy work.
   • Include in the file written summaries of any warnings given to employees about their performance problems. Use a documented system of progressive discipline, escalating from oral warnings to written warnings to suspension to termination.
   • Mete out discipline evenly. Don't overlook in one employee problems for which you discipline another. "Consistency in the application of work rules carries the day in these types of claims," explains Mr. Krchak.
   • Have an employment policy book setting out examples of offenses that will lead to termination. (Lawyers stress that all employment manuals should include a disclaimer that the employment at the company is "at will" and that the manual is not an employment contract.)
   • "Never make the decision to fire somebody out of a loss of temper or a rage," says Mr. Krchak. If an employee's behavior pushes a manager to the boiling point, he advises, "at that point it's better to give the employee the rest of the day off, to go back in your office and cool off and call your lawyer."
   Experts suggest that you run all terminations past a lawyer, which typically should take no more than one hour of the attorney's time.
   A legal review would examine the worker's history and membership in any potentially protected group as well as the company's past practices and adequacy of documentation.
   If the files show, for instance, that the boss two months ago gave a raise and promotion to an employee now getting sacked, that may raise legal warnings. The thinking: Why would someone with a seemingly good work record suddenly be let go? A lawyer also may point out problems if a longtime employee older than 50 is being let go after years of service; the problems here stem from age discrimination and a good work record. This kind of review "could save you a lot of money down the line," Mr. Krchak says.
   Mr. Krchak recommends that clients try to negotiate a signed release with an employee being let go. In return for pledging not to file a firing complaint, the employee typically would be given a severance package, usually involving cash.
   "Everybody's got a dollar figure at which that offer becomes attractive," Mr. Krchak says.
   "Some employers are hesitant to offer a severance package in return for a waiver because they feel it could start a precedent," of demands being made by terminated workers, Mr. Krchak adds. But he advises that such an arrangement buys peace of mind and avoids possible future headaches and bills.
   And more companies are buying peace of mind from termination lawsuits through insurance policies that cover legal fees, settlements and damage awards in those cases.
   New in the last three to five years, such liability policies are offered by many business insurers and are "a bid wave of the future," according to Mr. Morris.
   Says John Kuhn, a vice president with Warren, N.J.-based Chubb Group Insurance Cos., which sells such policies: "Companies are looking at this because they are realizing they are all vulnerable."                               Next page...