The document is called “Understanding Waivers of Discrimination Claims in Employee Severance Agreements.” Essentially the document covers waiver of discrimination claim when an employee knowingly and voluntarily consents to the waiver.

In recent court decisions, the deciding factor was only partly about the legal language of the severance agreement. Courts paid special attention to the “knowingly and voluntarily” clause in the law when considering whether an agreement was legally valid.

What they looked at and what the EEOC warns about:

• Has the severance agreement been written in a clear manner for the employee to understand the agreement based on his or her education and business experience?
• Has the employer somehow coerced the employee into signing the agreement?
• Has the employee been given adequate time to consider the agreement?
• Has the employee consulted with an attorney or been encouraged or discouraged by the employer from doing so?
• Has the employee been given the opportunity to negotiate the terms of the agreement?

On top of those warning, the EEOC cautions employers from trying to recoup severance pay from employees who file complaints. According to the agency, an employee does not have to return severance pay if the employee takes the money and then files:

• a charge of discrimination with the EEOC, or
• a claim in court under he Age Discrimination in Employment Act.

The story is compiled from court documents and reports in the Chicago Tribune and Inc. magazine.

Now, don’t get us wrong. We fully believe that employers have the right to fire under-performing employees who don’t follow the rules. After all, business is business.

But the case of Dena Lockwood, a 39-year-old single mother of two, seems a bit outside the boundaries of a run-of-the-mill termination (and the Chicago Human Rights Commission thought so, too, as we’ll see).

Lockwood applied for a sales position in 2004 with Professional Neurological Services, a Chicago-area company that sells medical tests to doctors. Lockwood said when she was interviewed for the job, she mentioned having children. Mistake #1: The interviewer asked if being a parent would interfere with getting the job done. Lockwood said no.

Still, the company remained skeptical — as reflected in their compensation offer to the woman. Mistake #2: While others in her position routinely started as $45,000 a year plus 10% commission, the company offered Lockwood just $25,000 a year base pay. After some back-and-forth, the woman and the employer agreed she would be paid the usual $45K, but that her commission rate would be only 5% until she hit $300,000 in sales. Then the commission rate would jump to the standard 10%.

Lockwood also tried to negotiate the standard vacation policy, which gave employees five days off a year. Her hiring manager responded that the company was pretty loose about the policy, so Lockwood shouldn’t worry about it.

Turns out, Lockwood was pretty good at the job, because she was getting close to the magic $300K sales figure needed to double her commission rate from 5% to 10%. That’s around the same time, in 2006, that her 4-year-old daughter came down with a highly contagious case of conjunctivitis — pinkeye.

Lockwood called in, explained the situation and saying she’d have to miss a day to stay with her daughter. Mistake #3: She got a call back summarily firing her because she “just wasn’t working out.”

The Chicago Human Right Commission found that the employer had discriminated against Lockwood because of her family situation. Among the bits of evidence that swayed the commission was a report that a colleague of Lockwood’s, in a similar situation, had been given the day off to deal with a home repair.  (We’re editorializing here, but that part of the story seems to indicate that the employer placed plumbing problems ahead of health problems.)

The commission ordered the employer to pay Lockwood $300,000. The employer is appealing the decision.

All together now: What were they thinking?

The scene

“Let’s go over this one more time,” HR manager Tina Rice said. “Did you tell Norman he could have a job here ‘as long as you want’?”

“Not exactly,” Michael answered. “At a meeting with some other employees, I congratulated him on completing his probation period and said something like, ‘Now you’re on the right track to be a lifetime employee here.’”

“Maybe I also said something about how we ‘never’ fire anyone here, too.”

“That about matches what the others say they heard,” Tina nodded. “But that’s the basis for a lawsuit Norman is bringing against us.”

“But the guy made a mess of things right after he got off probation,” Michael insisted. “I had no choice but to fire him. Everyone who worked with him realized that.”

“Agreed,” Tina affirmed. “The question now is whether what you said amounted to a promise. We’re in an at-will state. That means we can terminate anyone for any reason, as long as we don’t discriminate.”

‘It’s settled’
“Then that settles it,” Michael concluded.

“We’ll see,” Tina said.

Norman went ahead with the suit, saying he had an oral employment contract with the company. The company said no such agreement existed.

Did the company win?

Answer

Yes, the company won.

Three key factors shaped the judge’s decision:

• An implied, vague oral promise isn’t strong enough to overcome the at-will agreement (which also says an employee can quit at any time).
• The company had plenty of obvious performance-related causes to terminate.
• Although the supervisor’s comments could be broadly interpreted by some as a promise, holding the company to that interpretation would tie the supervisor’s hands and stifle any encouraging conversation.

The judge recognized there was no attempt to pull a fast one or renege on an agreement between employer and employee, and that the supervisor’s comments couldn’t be considered a “contract.”

Don’t ignore the obvious
This one went the company’s way, but there are steps a supervisor can take to ensure there are no misunderstandings with employees – and no messy lawsuits.

Certainly, supervisors want to praise employees when they’re doing a good job. But when offering praise, bosses should try to avoid comments about continued employment or, for instance, promises regarding promotions.

[Based on: Wright v. Northrop Grumman Corp.]

It’s a time when the anxiety level is high, and people are on edge. You’ll have to deal with all that, and at different levels:

With other members of the group. You’ll have to acknowledge that someone’s gone. Ignoring it just creates more tension, gives the appearance that something covert is going on and fuels the rumor mill.

How to handle it:

• Avoid the “why.” You could be stepping into a legal gray area of privacy if you go into the details of the termination. Simply say, “As you know, Bill has left the company.”

• Explain the short-term plan. His former co-workers will want to know who’s going to cover for Bill, when and whether he’ll be replaced, and so on.

With relevant organization departments outside your group. Often, others in your organization will have had contact and business with the former employee.

The approach in that situation is to have a one-by-one sit-down with the supervisors of those departments.

Explain to them that Bill has left the organization, that you’re establishing new contact people for outside departments and who those new people are. Don’t try to explain the situation to workers in another supervisor’s department, unless that supervisor asks you to.

With customers or other outsiders. If Bill dealt with people outside the organization, simply explain to them he has left the company and who his replacement will be.

Outsiders may need assurance that it’s “business as usual” and they should expect no breaks or drops in service.

The scene

“I don’t know what else to say, except the obvious,” supervisor Arlene Franco said into the phone. “We’re going to have to let you go for violating your terms of employment here.”

“That can’t be,” Craig countered. “You’ve seen the note from my doctor saying I have strep throat and should stay out of work. Do you want me to come in and spread it to everybody?”

“That’s not the point, Craig,“ she explained. “We have a signed agreement from you that if you take any more time off this year – for any reason – you’re terminated, no ifs, ands or maybes.”

“Sure, I signed that because I’d get fired if I didn’t sign it,” he noted. “So I’m in a no-win situation. I’m gone if I don’t sign, and I’m gone if I sign. That’s not fair.”

“Let’s get the facts straight,” Arlene said. “We drew up that agreement after you’d taken way too many sick days, some without a doctor’s note.”

Not perfect
“OK, I know I haven’t been the perfect employee,” he admitted. “But c’mon, Arlene, it’s for real this time. I’m really sick.”

“I’m not arguing that,” she replied. “I’m just telling you we have a a signed agreement, and you’re violating it.”

Craig was fired and sued for wrongful discharge, noting that he had a contagious illness verified by a doctor. The company said a deal is a deal, and Craig defaulted on the agreement.

Did the company win?

Answer:

Yes, the company won. A judge said the agreement was fair and legal, and that the employee had willingly signed it.

The employee tried to argue the situation presented special circumstances – that a doctor had verified the illness and ordered Craig to stay out of work, meaning the employee had no choice but to take sick leave.

No dice, the judge said. The agreement said termination was for missed time for “any reason.”

Drawing up employment ‘contracts’
As part of an employee’s appraisal or personal-improvement program, some supervisors like to draw up a “contract” that gets the employee to commit to a level of performance or behavior: For example:

“You (the employee) agree to (perform or behave at a stated level). If you fail to (perform or behave at the stated level), the penalty will be _________ .”

Then you get the employee’s signature on the agreement.

Two bases to touch when writing one up:

Make sure the agreement fits your organization’s policies (and what’s been done with other employees), and

Be sure you don’t ask the employee to do something that’s illegal or unethical.

[Based on: Zwygart v. Board of Commissioners of Jefferson County, KS]

The extension, passed by both houses of Congress as an add-on to the Department of Defense Appropriations Act of 2010, was signed by President Obama Dec. 21.

The initial subsidy, part of the Obama administration’s American Recovery and Reinvestment Act, called for a 65% subsidy on the premiums terminated employees must pay to continue their health coverage under COBRA. It was set to expire Dec. 31.

As you remember, employers were required to cover subsidy payments, which could then be reimbursed through reductions in federal payroll taxes.

New deadline: Feb. 28
The new law, which goes into effect immediately, extends employee eligibility for the subsidy to Feb. 28, 2010. It also extends the subsidy period from the current nine months to 15 months.

The legislation gives employees whose nine-month subsidy has run out another six months of premium assistance.

Final wrinkle: Employees whose subsidy period ran out Nov. 30 — and who couldn’t come up with the full insurance premium for December — can pony up the 35% and get retroactive coverage for the final month of the year. They’d then be able to receive the subsidy for another five months.

The bill also includes an amendment providing an additional 13 to 20 weeks of unemployment benefits, increasing payments by about $25/week.

That’s not the end of the story for the COBRA subsidy program, though – there’s another bill waiting in the wings. The Jobs for Main Street Act of 2010 (HR 2847), passed by the House last week, would also extend the eligibility deadline for COBRA premium subsidy payments for six months, to 6/30/10. However, this bill likely faces revisions in the Senate. We’ll keep you posted.

That’s what happened to four Fidelity Investments employees recently. Management intercepted an e-mail discussing the activity, investigated and fired employees who had organized the pools.

You see, competing in a fantasy football league for money ($20, in this case) is technically gambling, which is illegal in most states (but rarely enforced).

Fidelity also has its own policy against gambling in the workplace. Cameron Pettigrew, one of the fired employees, was aware of the policy, but claimed it was never strictly enforced, the Fort Worth Star-Telegram reports. He said he knew of several managers and execs who also played fantasy football.

In addition to the legality, the company said it also prohibits fantasy football because it’s a distraction. One recent study estimates a nationwide productivity loss of $275 to $435 million for each week of the football season.

But, many claim, it’s just one of many distractions — a list that includes social networking and holiday shopping. And we’d bet not many employees have been fired just for having a Facebook account.

Whatever your company’s policy, one thing’s clear: It needs to be enforced consistently. Letting execs do something that rank-and-file can’t sends the wrong message to employees (and, with a company of Fidelity’s stature, could send that message to the rest of the world, too).

What’s your opinion? Should Fidelity have fired the fantasy footballers? Let us know in the comments section below.

Some of the most expensive discrimination cases against employers in the last year resulted from managers who said the wrong thing at the wrong time — remarks that carried more weight than even the best documentation.

Good documentation is always crucial. But two cases in particular underscore the idea that managers need to be aware that what they say really does matter — and could become part of damaging testimony in court.

Case: Marcus et al. v. PQ Corp.

Total damages paid by employer: $6.2 million

The details: Two employees, ages 61 and 57, got laid off by a Pennsylvania chemical manufacturer. The two dragged the employer into court and charged they’d been targeted because of their age.

The company’s case had a solid foundation. Funding for the two positions had been eliminated, and so there was a strict financial reason — and no discriminatory basis — for the layoff. The ex-employees argued that the company had manipulated salary budgets so that the older employees would be the first to go.

It looked like a stalemate — which is generally good for a defendant employer — until the the court heard testimony that one manager remarked that the company needed “to get rid of some of these old farts.” And another manager had told the two laid-off employees that company needed more  “young blood.”

Those remarks ended up being the tipping point in a ruling for the employees — that the company had “willfully” discriminated.

Case: Blount v. Stroud

Total damages paid by employer: $3.3 million

The details: During an investigation of workplace discrimination, an African-American female employee who had no involvement in the case stepped forward to present her observation as a witness to the alleged discrimination. After that case was settled, the woman who spoke up was fired.

She charged her firing was part of a pattern of discrimination and retaliation by the employer. The employer pointed to documented, less-than-stellar performance and behavior by the employee as the basis for letting her go. Normally, such documentation is a game-saver for an employer.

And it might have been for this employer, until the fired employee pointed to remarks by her managers after she spoke up during the investigation of the other case. Examples: One manager told the woman, “You don’t know what you’re up against.” Another said the company could “cause you not to exist.”

Hearing those remarks, the court ignored the documentation and found in favor of the fired employee.

To start at the beginning, Tony Jackson is a firearms instructor and self-proclaimed advocate of Second Amendment rights. That’s what he is. An employee of Planco, a Pennsylvania subsidiary of the The Hartford insurance group, is what he used to be.

Jackson got canned by Planco for at-work browsing of Web sites that sell firearms and parts for firearms, in preparation for a skeet-shooting outing he planned with his wife.

Here’s where it gets complicated.

While Jackson was employed with Planco, he and  supervisor Christie Vasquez argued often about politics and gun-ownership rights. And it was Vasquez who spotted Jackson surfing the gun Web sites. She reported Jackson to the company’s HR manager, who instructed the IT department to run a check on Jackson’s Internet activity. When several firearms Web sites showed up in the activity check, the company placed Jackson on leave, denying him access to the building and requesting undercover police to be present at the workplace.

More complications: Some time prior to the Web incident, Jackson had suffered a heart attack and was placed on three months’ medical leave. After his return, he received a poor performance review from Vasquez, who said the employee didn’t meet expectations. Jackson says it was because he took medical leave.

Anyway, let’s return to the gun issue:  Backed by a letter from supervisor Vasquez saying she feared for her safety, the company then fired Jackson, even though there was no evidence he was ever violent or that the Web sites were anything but legitimate shopping sites for gun owners. Jackson says the gun issue is just a smoke screen for illegally firing someone with medical problems.

As you’ve probably figured out, the whole thing ended up in court. The company argued it had a policy against browsing “inappropriate” Web sites. Jackson countered that there was nothing inappropriate about the sites, and that the company has overlooked other employee incidences of browsing nonwork-related Web sites.

The verdict: The company wins. A U.S. District Court judge said Jackson hadn’t shown enough evidence of discrimination and that Planco legally exercised its employer rights by firing Jackson. (Note: Pennsylvania is an at-will state.)

As reported on  law.com, Edward Harrington Heyburn worked at the firm of Levinson Axelrod until he was fired in 2004. Let’s start by saying the parting was not amicable.

Heyburn started a Web site — http://levinsonaxelrod.net — dedicated to trashing his former employer. The site contains detailed stories of underhanded dealings by the firm and:

• calls  senior partner Richard Levinson “The Hypocrite Behind the Curtain”
• refers to another partner, David Wheaton, as a “used-car salesman with a law degree”
• describes firm bigwig Adam Rothenberg as “a man without friends”

The firm has hired another lawyer, Thomas Cafferty, to take legal action against Heyburn.

More of Heyburn’s allegations about Levinson Axelrod:

• Demands by the firm that Heyburn and others place the good of the firm ahead of family obligations, “including the birth of my son,” Heyburn wrote
• A refusal to close the firm’s New Jersey offices on on Sep. 11, 2001,  to allow employees to check on their loved ones and friends and cope with the day’s events

It goes on from there, including criticism of the firm’s lawyers who lost big cases.

So, what we have here is a legal firm hiring a lawyer to sue a lawyer who hates lawyers . Maybe that means they’ll leave the rest of us alone for a while.