False Employee Reviews Come Back to Bite Companies

False employee reviews are bad for employees, but they’re also bad for the legal bills they can bring.

Yet they happen every day. And if they’re happening in your company, stop them now.

A manager walks down the hall to the HR director and says “I want to fire Joe. I don’t like him because of _________________.”

The HR staff will usually ask why and ask if the manager has any documentation.

If there’s no documentation of why Joe is so terrible, the search for creating documentation often begins–mainly for legal reasons. Because somebody wants ‘backup’–legal protection.

But in the rush to document something–anything!–new problems can amp up. And hell can rain down upon an organization playing fast and loose with the employee review process.

In some organizations, it’s simply a fact that whistleblowers get terminated through sham reviews because they discovered corruption of someone above their paygrade.  Or a manager wanted someone gone-and HR and others are ready to make it happen through questionable processes.

And company leaders get sloppy and aggressive because they assume the employee will not sue because of financial reasons or the damage it can do to an employee’s career. Which is fine from a liability standpoint until….your company gets sued.

If you’re concerned about your company’s financial, legal, reputational or cultural risk, it’s important to avoid loaded, false reviews that are simply designed to advance a manager’s personal agenda.

False employment reviews can be challenged in court–and can hurt a company In the rush to judgement, smearing an employee to get them out can lead to lawsuits based on discrimination, retaliation, defamation, or libel.

Be worried about:

• Are different people in the same job being judged by different sets of rules and expectations? You can position that lens in either direction–a friend of a manager who was given glowing reviews and wasn’t deserving of them, or someone whose review was harshly negative compared to others.
• Are people lying in their evaluations–and can those lies stand up in court if someone is deposed?
• Is there tacit agreement between HR, legal, or some managers to protect each other and extend a ‘professional courtesy’ to help remove an employee.
• Is there a paper trail  that could send lawsuit damages through the roof?
• Giving harsh reviews to whistleblowers that are undeserved.
• Has retaliation taken place within the company before? If it continues, know that some of the retaliation has probably occurred through the retaliation process. Why? 1) It’s convenient and easy in some organizations and 2) Bad reviews are often utilized as a vehicle for removing someone.

What are the risks for employers?

• If a complaint is filed with the EEOC, punitive damages can be as high as $300,000, depending on the size of the company. That doesn’t include the lost wages or any other costs that could be added.
• If you falsify an employee evaluation of someone who blew the whistle, you may be seen as creating unsafe work conditions. Retaliation claims can invite OSHA (if you’re in the U.S.) into the discussion and their penalities–again, before any other compensation is determined–can be up to $1 million.
• Blowback against defaming an employee’s character and reputation–I’ve seen it happen.  In an effort to go for the ‘kill’, they insert false and defamatory information into the evaluation with false accusations of a legal or ethical nature as a way to ensure a successful termination.  This opens up a Pandora’s Box of liability depending on the state or country you live in.
• Discovering the problem of the discovery processes–Imagine what could come out of a deposition process determining who knew what and when? And having outsiders looks at your organization’s previous reviews.  And giving the media a peek into your operations and processes when a lawsuit goes public?
• Finally, this process can uncover other skeletons, if a lawsuit were to take place.  A lawsuit can bring new plaintiffs out of the woodwork, as employees (former and current) learn that they were also mistreated. If you have a board of directors that is in the dark, they’ll learn some things too and may have liability themselves depending upon what they knew and didn’t know, and also the media, customers, regulators and lawmakers will find out exactly what’s going on inside your organization.

Want to play it smart and avoid these risks? Here are several things a smart leader should do.

• Build a culture that encourages employee feedback that is free of retaliation
• Ensure that HR departments understand the company leadership’s vision of high ethical standards
• Hire and retain legal counsel (inside and outside) that understand the need for a legitimate review process
• Train managers and all leaders to follow a code of conduct that respects truth and ethics.
• If violations of these standards occur, as a leader, take appropriate action. The true test of a company’s culture is whether they are willing to apply their standards–and the consequences of violating them–to every person in the company–from the newest employee up to the CEO.  Are you willing to set a standard and hold your people to it.

None of this is rocket science. To protect your company and ensure trust from employees, make sure your review processes can stand up to scrutiny and demonstrate the respect people deserve. Say no to false employee reviews.

Pete Havel is a speaker, trainer, and consultant on workplace culture and leadership. He speaks and consults for organizations ranging from law enforcement agencies to Fortune 500 companies.  He’s also the author of “The Arsonist in the Office: Fireproofing Your Life Against Toxic Coworkers, Bosses, Employees, and Cultures,” named as a #1 Hot New Release by Amazon. It’s available at www.arsonistintheoffice.com Pete can be reached at pete@petehavel.com and 214-244-7906. You’ll also find more information on him at www.petehavel.com.