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Davis Brown Employment and Labor Law Blog

Employment Law Blog: Honesty is the Best Policy - An Appellate Court Applies the "Honest Belief Rule" to the Benefit of an Employer - September 5, 2012

The old adage "honesty is the best policy" led to another small victory for employers in a recent appellate decision on an Iowa case (Pulczinski v. Trinity Structural Towers, No.11-2585, (8th Cir., opinion filed August 31, 2012).

In this case, an employee filed suit against his employer, arguing that his employer's termination decision was motivated by his ongoing care of his disabled son and was, therefore, in violation of the Americans with Disabilities Act. He also alleged a violation of his rights under the Family and Medical Leave Act. While attempting to prove his case, the employee argued that the employer's asserted nondiscriminatory reason for termination was based upon incorrect information and was unreasonable, and that such facts demonstrated that the employer's proffered termination reason was merely an excuse for a discriminatory termination.  

The Court disagreed with the employee and reasoned that under Iowa's "honest belief rule" even if an employer's reason for termination turns out to be incorrect, or even unreasonable, that alone does not prove discrimination. In other words, as long as the employer honestly believed the nondiscriminatory reason given for the termination, there can be no discrimination even if the reason was based upon incorrect information or was ill-considered or unreasonable. This rule should certainly not be seen as a "get out of jail free" card for impulsive termination decisions, but it should provide employers with some comfort in those termination decisions where it is simply impossible for the employer to accurately determine all of the underlying facts.

The Court's opinion also provides yet another reminder of the importance of a good investigation and good documentation within a termination decision. The Court took particular note of the fact that the employer had thoroughly investigated the situation, had carefully documented such investigation, had provided the employee with what it believed was a good and legitimate reason for termination, and had documented such reason in a thorough written termination report.  

Indeed, the president of the employer-company who ultimately approved of the termination could not even remember terminating the employee, which the employee argued was evidence that the employer/president was acting in bad faith. Fortunately for the employer, the termination was well-documented, so the lack of a specific recollection of the actual termination by the president was held to be insignificant by the Court.

What did you have for lunch two days ago? If you cannot remember, that is one more reason why your motto should be document, document, and document some more!