Courts Add to Regulatory Burdens for Business, Again.

Terminated EmployeeYet another example of the quest for perfection by the government, this time by the Ninth Circuit Court of Appeals (again), is the case of Dawson v. Entek International (9th Cir. Jan. 10, 2011, No. 09-35844).

The court held that an employee’s termination two days after he complained to his employer’s HR office raised a triable issue of material fact based on circumstantial evidence that he was subject to retaliatory termination and that the employer’s stated reason for his termination was a mere pretext.

So, will crafty, subpar employees regularly complain to HR so that if they’re terminated, they can extort a settlement out of  employers for at least the cost of defense?  Or, if one thinks one might be terminated in the near future, will one complain to HR so one can point to the “close proximity” of the termination in the suit against the former employer?

From a pragmatic standpoint, although an employer can argue that close proximity between a complaint and termination indicates that the termination had been in the works (given the often glacial pace of bureaucratic activities), employers are better served by allowing more distance from an adverse employment action.

Additionally, employers may be advised to budget more for insurance and lawyers.  In fact, many already have, no doubt, as the court pointed to its earlier opinions that held that “temporal proximity can by itself constitute sufficient circumstantial evidence of retaliation for purposes of both the prima facie case and the showing of pretext.” (Dawson at p. 589, n. 6, citing Bell v. Clackamas County, 341 F.3d 858, 865-66 (9th Cir. 2003) and Miller v. Fairchild Indus., Inc., 797 F.2d 727, 731-32 (9th Cir. 1986).)

This sounds like  job security by court order, unless the employer can convince a jury at trial that it had a proper reason to terminate.  One unintended consequence may be  increased court workloads.  Another may be  many U.S. employers moving as many jobs off-shore as possible – why not?