Question: Does presenting a termination as a layoff reduce the risk of an unlawful termination claim? We have a new manager who’s not performing well that we want to let go.
Answer: No. In fact, it could create more risk. If the terminated manager saw that you were hiring again for the position you were supposedly eliminating, they’d likely start thinking of reasons you would lie to them about why they were terminated. Since poor performance would be a perfectly legal reason for a termination — and one which you could have shared — they will likely start thinking of potential illegal reasons for their termination. While an investigation or litigation might not go far, any time spent dealing with an angry former employee (if it could have been avoided by telling the truth), is time wasted.
In this case, we would recommend putting the manager on a performance improvement plan and documenting their progress (or lack thereof). If the employee’s performance doesn’t improve within the time frame set by the performance improvement plan, you’re on much safer ground to terminate their employment. If their performance does improve, then you’ve got a winning situation; you have someone performing well in the role and you avoid the risks of termination as well as the added costs of finding a replacement.