A recent decision from the U.S. Court of Appeals for the Sixth Circuit, Kean v. Brinker International, Inc., spells out some potential legal risks for employers who cite poor company culture fit as a reason for termination. In this case, a 59-year-old general manager of a Chili’s restaurant was terminated for allegedly not “living the Chili’s way” (a phrase the company used to describe delivering a positive customer experience for guests and fostering a positive work environment for employees). He was replaced by a 33-year-old with no prior management experience. The former manager sued Chili’s for age discrimination.
At the trial court level, Chili’s filed a motion for summary judgment on the basis that it had a legitimate, non-discriminatory reason for terminating the manager. The trial court granted Chili’s’ motion, and the former employee appealed. On appeal, the Sixth Circuit reversed the summary judgment, finding that Chili’s did not have sufficient admissible evidence to support its position that the termination decision was motivated by poor cultural fit.
While this case does not arise out of California, it still serves as an important reminder for employers nationwide that citing poor cultural fit as a reason for termination carries potential legal risks. Does this mean employers should not terminate employees who are not adhering to company values and culture? Not necessarily. But they should take deliberate steps to document and substantiate termination decisions.
Here are steps employers should take to avoid the type of costly, protracted litigation that Chili’s is currently defending:
- Document performance concerns as they happen, including for culture fit. For example, if an employee does not demonstrate the kind of customer service you expect and want to see, promptly bring it to the employee’s attention, and contemporaneously document the issue with the date and a detailed summary of what happened.
- Keep all documentation (including emails and text messages) related to employee performance. Employees can bring claims against former employers up to four years after their employment ends, so make sure you keep records for at least that long. You will need to work with your IT staff to ensure that electronically stored items are not automatically deleted before that time period expires.
- It is generally a good idea to inform employees why they are being terminated. Although California is an at-will employment state and you don’t have to provide a reason, when you don’t, the terminated employee comes to their own conclusions, and rarely do they conclude it was because of their own conduct.
The attorneys at Duggan McHugh are available to assist employers in navigating disciplinary and termination decisions involving potential breaches of company culture and core values.