Workers’ complaints are moving toward the courts for answers

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If you've ever been fired or laid off, you probably fantasized about getting even. Perhaps you mentally composed a scathing letter to the president of the company or even dreamed of blowing up the company.

This anger is now finding an outlet in the judicial system. Today, one-third of all slander (speech) and libel (writing) verdicts are decisions in cases targeting employers, according to Jury Verdict Research Inc., in Ohio.

A Newsweek article earlier this year, "The Revenge of the Fired," reported: "As many as 8,000 suits may have been filed in the past five years, most of them brought by workers who have been fired and are trying to clear their names."

Verdicts run heavily in favor of employees, and awards go as high as $2 million (awarded for a reference that a former employee was, "a Jekyll and Hyde person, a classic sociopath"). Employers know that even if they are right, sympathetic jurors often perceive big business as the bully. According to Newsweek, "Employees won 72% of the libel and other job-termination trials in a seven-year period in California. The juries awarded an average of $582,000. Companies also have to spend from $50,000 to $250,000 to defend these cases."

There's plenty of evidence that this will create a lose-lose situation for the majority of American workers and companies. For example, the threat of lawsuits has begun to affect reference checking. Now many employers will only give out former employees' titles and dates of employment. This hurts the good employee who could use former accomplishments to get a new position and helps the poor performer hide his or her past.

Not only are poor performers more likely to be hired, they are less likely to be fired. Conscientious managers feel compelled to wait until they have a mountain of documentation before terminating a poor performer. Meanwhile, productivity slides and morale suffers.

Also, resume inflation is on the rise, according to the "Executive Update," a newsletter on current employee relations trends. One of every seven candidates lies on his or her resume or during an interview, a Robert Half International survey estimates.

For those employees who truly suffer because of malicious, damaging references, or are wrongfully terminated, a lawsuit makes sense. Irresponsible former employers should not be allowed to cripple a career with careless, subjective judgments.

The proliferation of these suits, however, has begun to make hiring and firing employees a legal and bureaucratic nightmare for responsible employers.

Some companies are now using application forms denying an obligation to fire only for cause. Others insist that ex-employees sign release forms, protecting the company from liability. Some submit white-collar grievances to outside arbitration.

Still others are using outplacement firms at lower levels or severance packages that include an agreement about what an employee and his former company will say about one another.

Any written statements by employer representatives can be considered binding by many courts. Employment applications, offer letters, personnel policies, employee handbooks, manuals, recruitment brochures and supervisory manuals have been considered binding employment contracts.

The "Personnel Journal" (1985) reports that oral promises or statements have also gotten employers into trouble. In one case, a recruiter's statement that "employees are not discharged as long as they do the job" created a legally binding employment contract for life. Three states have even prevented companies from discharging unwanted employees because of the mere existence of an employment agreement.

Wrongful discharge suits have gotten out of control, leaving many employers virtually paralyzed. Many are supporting the dead weight of incompetent or poorly matched workers but are too afraid of reprisal to take action.

This comes at a very bad time for American business. Foreign competition should be causing company wagons to close the circle and stand united. Instead, companies are finding themselves in court fighting their own troops.

Meanwhile, employers' costs rise, bureaucracy jams the system and an adversarial feeling between employer and employee grows.

I hope employees, jurors and legislators consider the wide impact their decisions have. They may think they're winning battles, but they're losing the war.