Have you ever discovered that an employee lied about something important at work? For example, what would you do if an employee called in sick on two scheduled workdays and then you found out she had really been in Las Vegas during her sick leave?
The Third U.S. Circuit Court of Appeals ruled that a city’s discharge of a worker for dishonesty about her sick leave was a valid reason for discharge even though she produced a doctor’s note confirming her illness. Hughes v. City of Bethlehem (October 2, 2008). The city suspended her without pay while they investigated her sick leave excuse and confirmed her little gambling jaunt. Since the investigation confirmed the employer’s suspicions of dishonesty, the city terminated her job.
She, of course, sued for everything but the kitchen sink, including gender discrimination, disability discrimination, unlawful retaliation for seeking accommodation under the Americans with Disabilities Act, violation of Family and Medical Leave, and deprivation of procedural due process, since she was employed by a governmental agency.
Fortunately, the Third Circuit was able to see through all the allegations to the main point:employee dishonesty doesn’t have to be tolerated by employers. It is a legitimate, nondiscriminatory reason for termination. Granted, the employer had to fight its way through federal district court (where the case was dismissed without trial) and up to the appellate level. While that was an expensive way to be validated, maybe the city’s stand on this case will help all employers.
In my experience, proof of material dishonesty by an employee will defeat most unemployment and discrimination claims in Texas. So if you are an employer who catches an employee in a blatant lie that is material to that employee’s job or benefits, you have good grounds for termination.
But be sensible in how you go about this termination. You notice that the city in the Hughes case did not immediately fire her. Once an coworker tattled on Hughes, the employer suspended her without pay while it investigated and came up with proof that satisfied the investigator that the Vegas trip was factual. I’m sure the investigation was well-documented with receipts, flight itineraries, or similar proof.
The city had also been consistent in application of its honesty principles. The employee was unable to point to any male employee who had been allowed to continue working once he had been caught in a material falsehood. She also couldn’t produce evidence that her termination was related to a request for disability accommodation or family and medical leave.
So don’t just examine your immediate situation. Make sure that you are consistent and even-handed in applying all of your policies without discrimination. If you pass that test and you have documented proof that the employee has lied about something significant to your workplace, then you probably have good cause to terminate without fear of losing a discrimination lawsuit or seeing your unemployment tax rate skyrocket.