National Clothesline

Last year, one of our clients needed to reduce its work force. It selected employees to be laid off and developed a very generous severance package. It was so generous, in fact, that a couple of the employees who were not selected for layoff filed charges with the EEOC, claiming that they were the victims of discrimination because they were not fired.

They lost.

It was not, however, the first time that I saw an employee complain about being kept on the payroll. Frequently, employees are transferred or moved because of performance or personality problems, rather than terminated.

The reasons are numerous. The employer may sincerely wish to give the employee a second chance, the employee may actually be a good employee who just does not get along with his or her boss, or the employer may be thinking that a transfer will not result in litigation, like a termination.

The last reason, unfortunately, does not hold water many times. Employees often view the transfer negatively, like an affront to their dignity, and file a charge even though they have not suffered any loss in hours or income. Under the civil rights law, only “adverse employment actions” give rise to a legal cause of action.

So, when is a non-termination an adverse employment action? When can an act of kindness result in a lawsuit, despite an employer’s decision to keep an employee on the payroll?

Of course, sometimes a transfer can be so obviously an adverse employment action that a claim may be appropriate.

For example, if a branch manager is given a new job that includes cleaning toilets, emptying trash cans, and making coffee, there is a pretty good argument that the company is trying to punish her. But what if the new job involves tasks that an executive would normally perform? Is that “adverse?”

The Supreme Court has agreed to hear a case involving this issue in the coming term. Whether the Court gives enough guidance to truly know whether an employment action is “adverse” or not is another story. In the meantime, here are some guidelines you might consider.

First, sometimes termination is just the right thing to do. If the employee has engaged in misconduct, or the transfer (or job modification) is merely postponing what you know will be a termination, consider biting the bullet and just firing the employee. Then, there is no question it was an adverse action, and you do not have to explain why the employee’s conduct warranted a transfer but not discharge. Besides, keeping around an employee who has no future with the firm can cause morale problems.

[As an aside, I recently saw a poster that said something like: “Improve employee morale; fire unhappy employees.” After I stopped laughing, I decided that sometimes you have to do just that, fire unhappy employees. If bad employer practices are not the cause of poor employee morale, consider telling the unhappy employees to leave.]

Second, if you decide to transfer to save an otherwise good employee, match the job with the employee’s skills, and try to match the “prestige” of the two jobs. Remember, dignity is frequently the issue, and if you eliminate dignity as a consideration, the employee will have a harder time showing an “adverse” employment action.

Third, if you are considering a transfer or other action less than termination, involve the employee in the decision. “What would you like to do?” is not a bad question to ask. If the employee replies that he would like to keep his old job and get rid of his supervisor, make sure the employee is told that this is not a possible outcome. You might offer the employee the chance to resign. But if the employee suggests another job and you agree, it makes it more difficult for the employee to show an “adverse employment action.”

Finally, as I say with all employment actions, never sugarcoat the reasons for an employment action. You can state the positive reasons for the transfer, but you need to mention the negative circumstances that led to the decision.

Litigation is expensive, time consuming, and very unsatisfying for most participants. If you are going to be sued despite making efforts to keep the employee working, consider taking the stronger action now. You do not need to spend thousands of dollars in legal fees defending a decision to transfer an employee to another job making the same amount of money.