Welcome to the HR Connection, the podcast built solely for those managing HR in a 1:500. My name is Sabrina Baker, I'm the founder of Acacia HR Solutions. We are a small employer-focused embedded fractional HR support firm, and on today's episode I want to share with you the termination that I handled correctly that still ended in a lawsuit. I don't know that we do that well in HR, and it definitely is something that, in our profession, because we are dealing with people and people are emotional and they're messy and they're sticky sometimes, we can definitely have something where we do everything right and it still goes wrong. And that is absolutely the story that I want to share with you today, and what I learned from that. And so here's the thesis that I'm going to be working from: doing it right and getting sued are not opposites. You can execute a termination with full legal defensibility and still spend a year in discovery and still write a settlement check. If you are waiting for, or you believe, that "did everything correctly" means "didn't get sued," then you are operating on a very false premise, and so is your organization, that could cost you the first time a departing employee decides to test it. So I'm going to walk you through a real case. This was a role elimination done while an employee was on leave. Every element of it was legal. He sued anyway. He was on paternity leave and he sued. My client settled, not because they were wrong, because trials are expensive and settlements are a business calculation, not a verdict. Let's start with the timing decision, because I bet this may have happened to you. It happens to us more often, really, than I ever expected it to, where a client comes to us and says, "We need to eliminate a role due to budget cuts, due to whatever, we need to eliminate a position," but it just so happens that the position we want to eliminate is somebody on leave. That is what happened in my story. We had the client come to us and say, "We need to eliminate this role," just so happens that the person who holds the role is on leave. When you are eliminating a role held by someone on protected leave, you have two options. It's legal to do so. It is legal to eliminate the role. It's not legal to fire them because they're on leave, but it is legal to eliminate the role. But you have two options when it comes to timing. You either execute during the leave, or you wait until they return. We chose to do this during the leave. It's never an easy conversation. It's never an easy decision, and I don't think there's a one-size-fits-all answer here, but in this story we chose during. And the reasoning was, if we waited, the employee could have made irreversible decisions based on an employment status that was about to end. So this person was on paternity leave. They had a new baby. They could have been putting down daycare deposits. They could have been looking for a larger place to live and maybe making lease commitments, declining other opportunities that were coming their way. Waiting doesn't protect the employee. It lets them build more of their life on a foundation you already know is very temporary. So while neither answer feels good—executing during the leave or waiting till they return—nothing feels good. In this case, executing during the leave, while harder to stomach optically, gives that employee, we felt like, it gave them more runway to adjust before they're back in job search mode. That's kind of the trade-off: optics versus runway, and in this case we picked runway. It was still legal, just didn't matter. Now let's talk about the documentation piece, because I said this was completely defensible, and I still stand by that to this day. But let's talk through the documentation piece that we had. This is the part that I want you to really hear. Two months before the leave started, we'd gone through a job description rewrite process. I had interviewed staff about what they actually did day to day. We have a whole process for this in the business. We have a form that staff fills out and tells us everything that they do and the day to day. And in that process, we identified redundancy, so much redundancy. This particular department had really overhired, and they had multiple employees doing similar things, and everybody had capacity. And his role, in particular, overlapped substantially with another position. Like, it was almost a duplicate. They were different titles and supposedly there for different reasons, but they were doing a lot of the same work, and we just didn't need two people doing that. So here's the seam of that. Here's what's really important: the analysis existed before the leave. Before he ever went out on leave, we had started this process looking at the role. But the decision to eliminate the role, that did not happen before his leave. We didn't finalize the "this role is eliminated" decision until after he was already out. And that gap, the pre-leave analysis and then the post-leave decision, that is exactly where a plaintiff's attorney—and this is certainly where his attorney—planted their flag. That's exactly where they set their feet and said, "This is the problem here." It really didn't matter to them that the underlying work was done in good faith. It was done way before the leave. What matters is the timestamp on the actual elimination decision. So when we actually made the decision was when he was on leave, and they just assumed that that's why we made it, was because he was on leave. You cannot always control when a decision process concludes. Like, two months was not—we were not lagging. We were not being slow. This is how the process went. What you can control is whether the analysis and the decision are documented as two separate dated events, or whether they blur into one undated narrative that looks like it was constructed to justify a predetermined outcome. Ours did blur a little bit. While I certainly had documentation saying when we started the job description process, because I had sent emails about the process, so we knew when that started. He was a part of that. He had filled out the form. We didn't have—we had some documentation about the decision process, but not as clear as I would have wanted it to be. It existed, and the client's attorney was able to absolutely show a timeline. But I do believe that now I would have learned that it could have been—I would have shored that up a little bit. I would have had every single step of the process highly documented. Meaning, the minute that we found redundancy, we talked about it in meetings, but I didn't have proof of that. I didn't have email follow-ups and things documented, and that's what I definitely would have tightened up a little bit. So that's really kind of fixable. The timing of the elimination, I couldn't have changed that. But the timing of my documentation, and really being super thorough in the minute that we decided there was redundancy, even though we weren't necessarily talking initially about letting someone go or eliminating a role, we were talking about, "Do we need to change their jobs? Do we need to have them do other things?" There were lots of discussions that predated letting them go. I wish now, going back, that I had started documenting all of the conversations that we had had, just follow-up emails to the people that were involved in them, so that I could have shown our thought process all the way through doing the job description process and then eliminating the role. Another piece that came up in the case about this was telling the team. And the client's attorney was able to really use this as a positive on our side, because what we told the team is exactly the same narrative that we could prove legally. So we told the team the afternoon after we told him. Like, as soon as we kind of went through this process with him, then we gathered the team together and we told them. And the message was this: that his role had been eliminated due to redundancy with other work. There was no individual attribution, no performance framing, nothing was said about him as an individual or anything that could be read as retaliatory. And I think that that needs to be standard practice, and it's really worth talking about. Your internal narrative and your external legal narrative have to be the same. Whatever you're saying internally has to be whatever you would defend legally. If your team communication implies anything different from your elimination rationale, that inconsistency becomes discoverable. And discoverable inconsistency is a gift to opposing counsel. And we did not have that gap. I'm really proud to be able to say that we had verbal conversations with the team, and then I had followed up in email, and the email was proving that exactly what we told him is exactly what we told the team is exactly what our legal defense was. It still didn't matter, right? Because the lawsuit wasn't about what we told the team. It was about that leave window timing. But it was a piece that helped boost our case that this was not about anything other than exactly what we have said it has been about. Now, as I always suggest, when you are eliminating a role, doing layoffs, we offered a severance package. I think that it was a generous severance package. It came attached with a release of claims. And I think that that's very standard for severance packages, that they come with a release of claims. It's very legal to do that. He came back and negotiated more. He negotiated more severance plus COBRA. And we had already given him, as I said, a generous package, and he came back and negotiated extensively more, and we agreed. We really did, in our conversations, did not feel good about the fact that he was on paternity leave. It just—it wasn't like this easy decision for us. We understood the timing and what this was doing and how this was impacting, but it really was the best decision for the business at the time. And so when he came back and said, "I need this much more severance, I need this much COBRA," it was very little discussion internally. It was absolutely fine. We were going to be able to do that for him because we wanted to be able to show that we wanted to help him transition as best we could. So we agreed to the terms. Everything seemed fine. And then he didn't sign the release, and he didn't take the severance. And kind of weeks went by. And looking back at that now, I definitely learned that I thought that we had failed. So when someone negotiates a package and then they decline to execute it, I thought that was a failed negotiation. What I now know is that was definitely a signal. He wasn't negotiating necessarily in good faith toward resolution. He was establishing a paper trail of reasonable accommodation offered and refused that would look identical whether he intended to sue or not. You really can't distinguish those two intents in the moment, which means, like, once you're in this territory, you assume litigation probable. And that's—I hate that, but really, now looking back and in every situation I've had similar to this sense, if I get somebody who's negotiating severance, negotiating all these things, they seem like in good faith they're trying to work something out to where they feel good exiting and, you know, it's all going to end on good terms, and then they go silent or then they don't take the severance and they don't sign the release, now I just assume litigation. It may not happen that way, but now I assume that it's going to and start to prepare and make sure that we have all of our ducks in a row. You don't want to read cooperative negotiation as a sign that risk has passed. So I think when we were in the negotiation, I thought, "Oh, we're going to be okay here." And then he went quiet and I thought, "Oh, well, that just failed. Who doesn't take severance?" You know, I didn't really understand. And then we got the notice from his attorney a little bit later. Speaking of a little bit later, he didn't contact us again for four months. So we had the severance discussions. We agreed in writing. We gave him all of the paperwork saying that we would agree on how payout happened, how COBRA reimbursement happened. And we didn't hear a word from him for four months, and then he filed. And discovery for that claim ran for over a year. Now, the client in the end did end up settling. It wasn't an admission of guilt. It wasn't an admission that they really had terminated him or eliminated his role because he was on leave. Because genuinely, we had enough documentation to show that we had never, ever talked about that. We had never really—this really was redundancy in the roles. But a cost calculation by the business, thinking about trial cost, the time of this—because this already ran for over a year—uncertainty and reputational exposure, right? We really were cognizant of the fact that we are litigating a paternity leave termination in front of a jury. Regardless of the legal merits underneath it, the client just decided to go ahead and settle. Juries don't really parse job description redundancy analysis. You know, we didn't feel like we could go sit in front of a jury and explain this job description process to them, and they would say, "Oh, I completely understand there was that redundancy and this made sense." What we felt like was they were going to hear, "Company fired new dad while he was home with his baby," right? That optic has settlement value independent of the legal facts. So your—our clients, insurer, and counsel talked about that and priced that in, whether or not we did everything right. You know, no one—the legal counsel, the insurer—while there were lessons learned, like where we could have tightened up the paperwork. Overall, they felt like there was a really good case there. But they understood that the optics of this going into a trial where jurors are probably just going to hear that we fired a new dad while he was home with his baby, we knew that probably settling was going to be the best outcome here. And look, I get that. I was laid off while on maternity leave. If you've been here a while, you know my story. I started this business after being laid off while on maternity leave. And to this day, 15 years later, 16 years later, when I tell people that, when I say I was laid off while on maternity leave, they will go, "Oh my gosh, that's awful. Is that even legal?" And so I explained to them, yes, because they eliminated the role. And two, I don't think it had anything to do with my maternity leave. I do think that they—you know, we had been experiencing layoffs, so I believed that the business was in trouble. And even though I feel like that was all legitimate, the optics of that, I know, especially for people, it just never, ever feels good. So let me just give you three real lessons learned here. Three things that I think, if I had to go back and do this all over again, while I'm content that I did everything I could in the moment, now, I don't know what it is, six, seven years out from this, going back and thinking about it and learning everything that I've learned since, here are three things that I think, when this comes up, you should do. Before I get into those, let me say this. When a client comes to us now and says they want to eliminate a role of somebody who is on leave, we do everything in our power to talk them out of it. We—especially if it's a one-off. So if just this one single person is being laid off and they're on leave, we will try to do everything we can to talk about, "Is there anything else that we can do? Is there any way we cannot do this?" In California, you know, you now have the law that says if the person is laid off within 90—I think it's 90 days of a leave—then it is really on the employer to prove that that was not because of their leave. They just assume this intent already in this state. And so we really do try and talk clients out of this or, you know, if it's—we would rather it be part of a larger layoff situation if it has to be. Just anything. Because we know that the optics just doesn't look good and it doesn't feel good to be messing with people's lives when they are on leave. We get that. And we do try and talk people out of it as much as we possibly can. We also know from a business standpoint, sometimes you have to eliminate the role. You don't need the role and you need to eliminate it. So it is a tightrope. It is one of those situations that we never want to deal with, but sometimes have to deal with. So let me give you kind of three things that I would say, if you're faced with this, here's the advice I would give you. The first one is to make sure you are separating any analysis timeline you have from your decision timeline in writing. So two distinct dated events. Don't let—like, we've been thinking about this for months—collapse into a single undocumented narrative. And so what happened is, you know, we had the paperwork that said we were doing this job description analysis, and then there was this gap of time, and then there was the paperwork that said we'd made our decision. Well, in that gap of time, we were doing things. We were deciding, as I said, could we move this person to another role? Could we change everybody's job and spread out the work a little bit differently so that we didn't have to eliminate the role? We actually had great intentions of trying to keep everyone in their roles or in a role, but none of that was documented. And so you don't want that gap or it looks like this long-running analysis where now they're on leave, so let's make the decision. So that's what I would say, is to make sure you are really thoroughly documenting from your analysis phase to your decision phase. Number two, document decisions in real time. So not after the process fully wraps. If the job description rewrite is still in process, when you need to make a call, document the call as its own dated decision. Don't wait for, like, it's all wrapped up. So had we decided, you know, two weeks into this job description process that we were going to do this, I would have need to have documented then, right? That even though this job description process hasn't wrapped up, I'm still going—we're still going to go ahead and eliminate this role right now. And that's like its own decision point. That's its own documentation point. So it's really, really what I could tell you, and we obviously have a whole episode about this, is just document the crap out of this stuff. You just really want to, when you start any project that you feel like could lead to terminations, that could lead to elimination of roles, write everything down. And then number three is to treat any termination that is touching protected leave, so any elimination of role that is touching somebody on protected leave, as litigation probable from the outset. I think had I gone into—I mean, I knew we were in a sticky situation. I knew that he was on paternity leave and was going to have the ability to potentially bring a lawsuit or could have the optics like we had termed him because of that, and he obviously had that as an outlet to go and do. But I don't think that I led from that place. And I think now I lead from a place of, if we're going to eliminate somebody's role while they're on leave, I'm going to assume they are going to sue. Whether they do or not, I'm going to assume that. And then I'm going to make sure that I have, you know, just everything documented the way that I need to. I'm going to be thinking about my severance package. I'm going to be thinking about the tone that I'm using, even just the way that I'm communicated. I'm going to be thinking about team communication. None of it is going to change whether they sue or not, but it is going to help you make sure that you are leading from a place where you are protecting the liability on your side of things. So you want to be taking a legal review, really have that strong documentation discipline every single time. If you are doing something while someone is on any kind of protected situation, then you want to treat it as though they are going to take this to a lawsuit, and what are you going to need to have to make sure that you are able to defend it? And, you know, sometimes people will—I'll have leaders come to me and say, you know, this employee is probably a difficult employee, and so we're going to need to really have our ducks in a row for this one. No, I have found in my life, in my career, that the employees who actually go quietly and are less difficult, those are the ones that scare you later. Those are the ones that come up out of nowhere with something. So every single time that you are eliminating a role, terminating someone who is on a protected type of leave, you need to make sure that you are coming from a place where they are going to sue, and I need to make sure that I am protecting us. Now, of course, I have to say with this episode, this is not legal advice. I am not an attorney. Please do not take what I say as any kind of legal advice. What I wanted to do was just share a story of a time when, you know, we did as much. I mean, we've had less, I'll be honest, because clients sometimes will do these things and bring us in after the fact. So we've had this happen since this story, and we've had less documentation, not through any fault of our own, but from the client. And so I'm proud of how this story went down with what I knew and what I had then, but it always just kind of sticks in the back of my mind of, there was more that we could have done. And I just think that one of the things that I want to do with this podcast and speaking to you, who is sitting inside of a 100-person firm, a 60-person firm, and has no one else to talk this stuff through with, is to give you some actionable tips that you can really use. If you have access to legal counsel, this is one of those times that I would so get them involved. From the minute you're thinking of eliminating the role, you want to talk to your legal counsel and run it by them, and they're going to tell you not to do it. I'll tell you right now, they're going to tell you not to do it, because we have certainly talked to legal counsel for other situations like this, and they're going to say, "Wait," and let the person come back. And it's definitely a discussion that you have to have and ask them lots of questions around, if we have to do it now, what is the best way to do it? So I would definitely encourage you, if you have access to legal counsel, to use that. And even if you don't have access, if you don't have a—if you don't have a lawyer who is on retainer or somebody that you can use, this is one of those times where asking your CEO for the budget to reach out to an attorney would be really helpful. I'll tell you, Cal Chamber has a great feature. If you're a member of Cal Chamber, if you're here in California, that you can talk to an attorney as part of your membership. I think you get so many times a year, maybe two or three times, I'm not sure what it is. We're members, and I know we have used that. So definitely this is one of those situations where if you have access to legal counsel, I would use it for sure. Especially because you want to pull them in on it as early as possible if it is going to end up poorly, if it is going to end up in some kind of lawsuit and they're going to be defending you. You want them to be guiding you through the process before they get to that point. So that's my story. I hope it was helpful to you. I'm so happy that you're here. I hope that the content that we're sharing is something that you are finding valuable. If you are, I would love for you to subscribe wherever you get your podcasts and share this with any other small business HR practitioner who might need it. Thanks so much for being here. I'll see you next time.