by Brendalyn L. Lumpkins

To weather the dire state of the economy, many employers have been forced to eliminate and/or consolidate positions to reduce costs. Inevitably, when positions are eliminated and employees are laid off, questions arise regarding the legality of the employment decisions. In this regard, far too often, employers’ efforts to defend lay off decisions are complicated by incomplete or inaccurate performance reviews.

Because courts tend to place significant weight on the information contained in a terminated employee’s most recent performance review, employers generally will not fare well if the appraisal is inconsistent with the employer’s layoff decision. Even if an employee’s performance issues are documented elsewhere in the employee’s file, if the issues are not also reflected in the performance review, employers may find themselves faced with considerable liability, offsetting any savings the employer hoped to achieve by the layoff. Employers can better defend layoff decisions by ensuring that an effective performance evaluation system is in place. A performance evaluation process, which includes regular (i.e., annual or semi-annual) performance reviews, should:

• Include job-specific evaluations of an employee’s performance
• Thoroughly and accurately reflect the employee’s performance during the relevant time period
• Document prior performance issues and current status, even if documented elsewhere in the employee’s file
• Outline in detail any performance deficiencies and required improvement
• Ensure performance scores or ratings (if applicable) are consistent with overall performance appraisals
• Ensure that performance reviews are discussed with, and signed by, employees
• Hold management accountable for thoroughly and accurately completing and administering performance reviews.

While employers will not be able to prevent a terminated employee from filing a lawsuit as a result of a layoff, employers will be able to better defend against such suits by implementing the above steps as part of their performance review process. In sum, employers should ensure that the information contained in a terminated employee’s recent performance review is not contrary to any layoff decision. If you need assistance on these matters or have any questions, please contact your Elarbee Thompson attorney.