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Honest Belief Rule

Likely the most common question we hear is, “can I terminate an (at-will) employee for cause, even if he/she is a member of a protected class?” The quick answer is yes: any at-will employee can be terminated at any time, with or without cause, so long as the reason for termination is not discriminatory or retaliatory (i.e.: refusing to perform an illegal act) in nature. Beyond that, an employee cannot be terminated for taking approved leave to which he/she is entitled (i.e.: FMLA, military service, jury duty). But employers must follow and document their own progressive discipline and termination policies to be in a defensible position should an employee claim wrongful discharge. This brings to mind the “honest belief rule.”

The “honest belief rule” is a defense used by employers when, for example, an employee has brought a wrongful termination suit against them. It enables the employer who took adverse employment action to present evidence of making a “reasonably informed and considered” decision of a non-discriminatory nature.

While there is some concern as it relates to FMLA cases, the recent ruling on Richardson v. Wal-Mart Stores Inc., 6th Cir., No. 15-1142 (Sept. 9, 2016) demonstrates that the “honest belief rule” remains a viable defense. In summary, Ms. Richardson had three employee warnings (for unrelated reasons) documented in her file, and per Wal-Mart’s progressive discipline policy, an employee is entitled to three warnings (called “coachings”) before being subject to termination. Thereafter, Ms. Richardson fell and broke her wrist while stacking store merchandise, with the cause of the fall being her own failure to follow required workplace safety procedures. This being the fourth incident, Ms. Richardson was terminated for work performance issues.

At the time, Ms. Richardson was 62 years of age. Ms. Richardson filed suit for age discrimination, but because Wal-Mart had followed their progressive discipline protocols and was able to provide relevant documentation, the courts found that Ms. Richardson lacked evidence to support her claim, and that Wal-Mart had an “honest belief” that she was terminated for nondiscriminatory reasons.

From a human resources perspective, we highly recommend that all employers follow the progressive discipline policies contained within their Employee Handbooks, and document any incidences in an unbiased, thorough, and timely fashion. But beyond that, should a wrongful termination suit be brought against an employer, that employer must immediately retain legal counsel, considering the significant damages that potentially may be awarded.


Disclosure: The content of this blog is provided for informational use only, and is in no way intended to constitute legal advice.

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