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Inspired by this answer and a comment

...So he becomes a manager, is really bad at it, gets fired...

In the original question, an employee was denied a promotion and turned sour. The company is (currently) looking for a way to get rid of them without paying a substantial severance package.

So the comment got me curious. Can a company promote you into a position you aren't qualified for, then fire you for-cause for under-performance? Sounds too convenient. In this case, the employee in question also expressed interest in the position--does that change the answer?


The additional assumption I'm making (that may be wrong) and the reason for this question :

  • "For cause" instead of "no reason" has implications. Namely, unemployment and in this case, an effect on the massive severance package

The comment suggests that promoting someone and then firing them for-cause is a way to avoid paying the severance package.

closed as too broad by Philip Kendall, mag, gnat, JazzmanJim, Dukeling Oct 1 at 18:33

Please edit the question to limit it to a specific problem with enough detail to identify an adequate answer. Avoid asking multiple distinct questions at once. See the How to Ask page for help clarifying this question. If this question can be reworded to fit the rules in the help center, please edit the question.

51

This is a huge, horrible mess.

Promoting you to make you fail is called constructive termination

... And it's the oldest trick in the book. A company can't get someone to quit, and can't lay them off (for some reason). So they setup the employee to fail.

  • they send him out on an urgent job with a minor piece of safety equipment broken, then fire him for not using adequate safety equipment.
  • they send him to do the impossile, and fire him for failing (every manager trying to clean up Larry Nasser's mess at MSU and USOC).

The upshot is that instead of doing what they're actually doing: lay them off (the UK says it elegantly: "make them redundant"), they are constructing a fiction where the layoff is in a different category than it is.

"But it's at-will employment. There's no difference!"

Several people make the point that most employment is at-will, meaning no complications like tenure, union grievance process, etc. So no difference between layoff and firing: if you try to argue the firing, they just say "OK then, you're laid off lol". You're out the door just the same. That is true; gold star for you.

Therefore, constructive termination should be irrelevant in at-will employment, yes?

The difference matters to a bunch of things. Unemployment pays on layoff; it doesn't pay on firing. Contract provisions that provide all sorts of compensation features upon layoff, from pensions to healthcare to stock options, probably do not apply on firing.

And in the instant case, that is exactly what we are dealing with here. For whatever reason, the referenced OP has a $750k golden parachute. The entire point (for the employer) of constructing a termination (contriving a firing) would be to deny the employee the nearly million dollars of compensation.

My rule of thumb is that $9000 is the threshold point where it starts becoming worth getting lawyers involved; OP's case is two decimal places from that. Everyone should expect that every single thing that happens here will be closely scrutinized by lawyers. If I were OP, I'd be Comeying the hell out of this with a daily diary of events, and be on a first name basis with my local notary public. You can bet the company is (if they're not, their lawyers suck).

Fraud is a big deal too

So yes, they can fire OP for having a big nose. However, that will count as a no-fault layoff in every way that matters. So suppose that happens, either a) the employee says "oh noes, they fired me so I lose my benefits" and they don't ask for them; or b) the employee asks for them anyway. In which case the company says c) yeah that's fair, here they are, or d) you can't have them since we used the word "fire".

If the company wins on a), they get $750,000, if they lose on d) they lose $0. It would be an all-win, no-lose situation for the company, which means it would become their fiduciary duty to stockholders to try to make that happen every single time. c) would be out of the question, simply throwing away stockholder money without trying to keep it.

At d), we arrive at fraud. The company is falsely saying it's a firing, to deny benefits, i.e. To profit from deception. The law deters that several ways, and in some jurisdictions, one way is to inflict triple damages. So it changes the economics for the company.

If the company wins, they get $750,000. If they lose, they lose $1.5 million.

Now they can tell the stockholders "See? See? It's not negligence to treat employees fairly, because cheating them is such a bad gamble!"

I don't know if the unemployment office goes after employers for treble damages. But you can bet private attorneys will on the severance. Especially if they are operating on a contingency (typically 1/3). Do they want 1/3 of $750k or 1/3 of $2.25M?

So, it's an old trick. Unemployment judges, civil judges and lawyers have seen it many times before. If the employer wants to get clever, he might find himself too clever for his own good!

  • For clarities sake: is triple damages in this case 1.5M or 2.25M? Because you use both numbers here. – Nzall Oct 1 at 20:14
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    @Nzall triple damages means the normal damages actually owed (750k) plus 2 times that in punitive damages (1.5M). I am treating the company on an accrual basis, meaning the 750k is already on their books as belonging to OP (a payable), and by firing him they would seek to move it from the "belongs to OP" column to the "All mine!" column, thus gaining 750k (extinguishing a payable). If they lose hard, the 750K remains OPs, then they must allocate another 1.5M from the "Mine" column to the "OP's" column. – Harper - Reinstate Monica Oct 1 at 20:26
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    It is noteworthy that at-will employment is just the default modality in many jurisdictions and may be superseded by the contract by providing that termination is for cause. – Iñaki Viggers Oct 3 at 21:40
  • Came across this today and it's fairly interesting. It seems that Constructive Dismissal would only apply if there wasn't a contract signed with the promotion. IANAL though! But if the engineer found OP's post and linked the two together, I think that would be solid grounds for "conduct that undermined trust and confidence" – Mars Oct 9 at 4:26
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Can you be promoted and then fired for-cause?

The "for-cause" part in the US is mostly irrelevant. Almost all states have "at will" employment so you can leave or be terminated for any or no reason at any time. In the US there are far easier and direct ways to get rid of an unwanted employee than staging a mock promotion.

This being said, it's a pretty common event that people get promoted above their skill and comfort level. Unfortunately that happens fairly naturally and often with good intentions: you are good at something and so you get promoted. That cycle continues until you stop being good and you are stuck at your first level of incompetence. It's sometimes referred to as the "Peter Principle". https://www.investopedia.com/terms/p/peter-principle.asp

It's not an easy situation to recover from: you either need to take a step down again, figure out a way to get up to performance, side step it somehow, or leave. All of these are very problematic.

The moral of the story: while promotions are touted as the ultimate career goal you should look VERY carefully at the requirements of the job and how you stack up to them. It can easily backfire.

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    "In the US there are far easier and direct ways to get rid of an unwanted employee..." But in some cases companies want to avoid paying unemployment, and unemployment compensation can be affected by the termination reason. – Kenneth K. Oct 1 at 16:23
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    @Hilmar I think the detail in this specific case is that the employee has a generous severance agreement and the company wants to avoid paying it. – user3067860 Oct 1 at 17:46
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    "For cause" is relevant to whether you can collect unemployment. – No U Oct 1 at 18:26
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    "For cause" is only partially relevant to whether you collect unemployment, in the US since the state ultimately decides what constitutes the sort of misconduct that gets you denied unemployment, and it usually requires a documented history of far worse conduct than simply being a bad manager. A different standard might apply to severance though, and that would depend on the employment agreement, if there is one, and we're not privy to the details of the agreement in this case. – Zach Lipton Oct 2 at 3:15
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    @FreeMan Are you sure that this was really a plot to make her quit and not just bad management above her overestimating her capacities? – Philipp Oct 2 at 8:56
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To be fired for-cause requires generally the satisfaction of one or many criteria including:

  • Dishonesty (including theft, fraud, deception and breach of trust)
  • Conflicts of interest
  • Inappropriate relationship (with boss, junior employee)
  • Insolence or insubordination (disobeying a boss, acting rude or abrasive)
  • Breach of important rules or policies
  • Theft or fraud that’s work-related
  • Harassment or violence in the workplace
  • Abuse of technology (misusing an employer’s equipment, abusing social media)
  • Performance issues that amount to gross incompetence
  • Off-duty conduct that reflects very poorly on the employer
  • Non-disclosure of a serious illness in a job interview
  • Absenteeism and lateness (persistent, without a valid excuse)

Being fired for-cause when being challenged in court puts the burden of proof in the court of the former employee that they did not in fact do what the company claims they did. This burden is quite high.

In the linked case, the employee if they caught on to the ruse, and certainly any good lawyer would too, could easily show that the company had acted in conspiracy against the employee to set them up for failure to avoid paying out such a large severance package. In fact the severance package is so large that I can’t see this company getting rid of the employee via for-cause and it not look like a conspiracy to avoid paying it.

To be more general, a promote-review-fire technique is certainly a possible one, but if its too easy to see as a conspiracy by a lawyer -if the employee took the company to court- it probably would backfire.

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    At-will states do not need to prove anything. They can fire you because you wore mismatching socks, if they wanted to. Also most employee agreement include clauses that you will use an arbiter instead of going to court. This contract is binding and will be thrown out of court unless you, the employee, can prove the employer did something that is protected by federal/state employment laws. – Dan Oct 1 at 14:30
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    I cannot explain every single contract in existence. Specific clauses will of course change things in every single answer on SE. – morbo Oct 1 at 14:38
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    @Dan you may want to stop using that metaphor. You don't understand the mechanism. Yes, you can fire someone for mismatching socks, but it counts as a layoff not a fire... and then they need to pay the severance. Constructing a fictitious situation to make his departure "his fault" is only a fraudulent way of laying him off. Many jurisdictions provide treble damages for fraud, so now we're up to $2.2 million... – Harper - Reinstate Monica Oct 1 at 17:49
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    From what I've read elsewhere, firing for-cause puts the burden of proof on the employer, not the employee. Supposedly that's the reason why it's cheaper to just give the severance package than to fail to prove for-cause and pay damages. Maybe that depends on the state? – Mars Oct 2 at 0:23
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    @Mars it may be a state/country thing. I generally read that the burden is on the employee, as they are the one to start the dispute for wrongful termination. All the law stuff is confusing if one reads too deeply :/ – morbo Oct 2 at 6:17
4

It is not possible to promote an employee without their acceptance. If the employee accepts the promotion, they are responsible for the (new)tasks they have to do. Then, if they are under-performing or whatever, the company can(should) fire/replace them.

If someone is getting promoted, it doesn't just mean better benefits/salary, but also harder problems to solve and more responsibility. Don't accept the promotion if you are not sure you will do the new tasks well.

I don't think any company will practice "this" way to get rid of employees in order to avoid paying a substantial severance package. It is a difficult and unreliable way. I am pretty sure, if the company wants to cheat, they will use other "tactics."

  • When they promote you to fire you, they are finding ways to fire you. If you deny the promotion, then they'll fire you because your position is no longer required. Win-win no matter what. This really assumes if you are in the US and living in a at-will state. – Dan Oct 1 at 14:26
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    @Dan: "your position is no longer required" is a layoff, not for cause The company can't use that to get out of the contracted benefits. – Ben Voigt Oct 2 at 3:46
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With great (any new) power, comes great (newer) responsibilities.

Someone can be very good at doing something (existing responsibilities), but not good at doing something else (the new ones). If the new job requires something new to be done, which the promoted employee cannot seem to manage, eventually the company needs to find a replacement.

That is why, while accepting a promotion / new role, the expectation should be made very clear. It's good for both parties

  • The individual will know what they are expected to deliver (over and above the existing responsibilities)
  • The organization will know whether the employee is willing to accept the new responsibilities and if they need any help / guidance / training to adapt to the new role.

In an ideal situation, if a new role comes with a responsibility, employee should give it a thought and discuss about the targets before accepting that. If the only focus is on to the hike in the paycheck - then certainly that can get them into troubles like you mentioned in the question. In that scenario, it's not even a tricky one - You accepted a new role and can't seem to deliver, so they need to have you replaced.

That being said, while companies can use the promote, review and fire technique, they can simply not promote you and let you leave - as eventually they have to let you go in the end either ways. Saves them a lot of trouble using the later approach actually - so while the former is possible, it's less practical and much less effective. I'll doubt anyone will actually be willing to pursue that route without a compelling reason.

Note: I'm not sure of the legalities involved in "for cause", but surely the termination can be based on poor performance / non-delivery aspect.

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    That I understand. I'm talking about the purposeful promotion of an employee to a position you know they cannot fulfill, with the intent of firing the employee "for-cause," to avoid paying severance pay. – Mars Oct 1 at 7:33
  • Hmm... I've never had any such formal discussion or received a new contract upon previous promotions--at most I received a new business card. But I think you have a very valid point – Mars Oct 1 at 7:38
  • @Mars No one can / will promote you without you accepting the new role / designation/ responsibilities. Usually, when accepting a promotion, a discussion with your superior / supervisor / reporting manager should be planned, and better to get clarification on the newer expectations. Saves a lot of trouble / gaps afterwards, – Sourav Ghosh Oct 1 at 7:42
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    @Mars Yes, I agree it's a grey area, however, most of the people have to "demand" a promotion, then ask for the "targets" need to be met and after delivering some/ all of them, they get promoted. So, in a way, you are already (even partially, if not completely) aware of the new responsibilities for the new role. – Sourav Ghosh Oct 1 at 7:54
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    "saves them a lot of trouble" Can you explain? I think the concept here is that in the linked case, "letting go" = severance pay. A LOT of severance pay. Quit or fired for-cause = no pay, I think. Not very knowledgeable here, but I believe that's the core issue of the linked post – Mars Oct 1 at 7:59
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We used to say that "Just cause" really means "Just 'cause we felt like it".

The simple fact is that businesses have been at this for a long time, and put so many rules in the employee handbooks that you are always violating some policy or other. At any time, all they have to do is compile a list of violations, and then terminate you for cause.

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