Inflated Performance Evaluations: A Legal Trap

Your company has just received notice that a former employee has filed a charge of discrimination. You are shocked and angry about the charge. You recall briefly speaking with the supervisor before the termination that the former employee’s performance was substandard, which justified the termination decision. During discovery, the former employee’s attorney asks for the performance evaluations. In the last performance evaluation, the supervisor gave excellent scores in all categories. The company has now lost an excellent opportunity to dismiss the case before trial and you and the supervisor may have a difficult time reconciling the performance evaluation and the reasons for termination.

This type of scenario happens more frequently than is necessary in employment discrimination cases. For example, last year in a case filed in federal court, the plaintiff alleged that the company fired him because of his age. At the time of his termination, the company alleged that the employee exhibited a lack of cooperation with peer department managers, failed to manage the difficult personalities in the accounting department, and failed to resolve conflicts between the accounting staff and other administrative departments. However, the employee’s performance reviews from prior years contradicted these grounds. Under the heading “teamwork/interaction” the supervisor noted in the performance review, “You are extremely cooperative with others and work well under normal course of staff work in carrying out your job.” The court denied the company’s motion to dismiss the case and it proceeded to trial.

Such apparent contradictions can also be a problem when the supervisor testifies. If the supervisor admits that he inflated the performance review, the plaintiff’s attorney will argue that if the supervisor “lied” on the performance review, then he is lying about the reasons for terminating the employee. There is just no good outcome from an inflated performance review. In your HR capacity, you must guard against supervisors inflating performance reviews. In every employment discrimination case, the employee’s attorney will demand the employee’s personnel file, including any performance evaluations. The attorney will be looking for any contradiction between the reasons the company gave for terminating the employee and what was expressed in the performance evaluation. Any such inconsistency can be persuasive evidence for a court to deny a motion to dismiss the case before trial.

Not only must you guard against inflated performance evaluations, you should also review the performance evaluations prior to any decision to terminate an employee based on performance deficiencies. If the supervisor wants to terminate an employee because of performance deficiencies, but a recent performance evaluation indicates otherwise, then you need to have a frank discussion with the supervisor about what has changed which justifies the termination. You may recommend to the supervisor that a longer track record of poor performance may better insulate the company from any perceived inconsistency. You must anticipate that if a lawsuit is filed by the former employee, the supervisor and you must provide an explanation for any such inconsistency.

Therefore, what may seem to be a perfunctory annual assessment of an employee’s performance, could have serious financial consequences for the company.

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