Performance evaluations can be challenged in court, so all business owners must ensure that performance evaluations are fair, objective and supported by quantifiable facts whenever possible. A supervisor who falsifies an employee's performance evaluation can provoke an expensive lawsuit based on claims of illegal discrimination, retaliation, libel or defamation of character.
Unnecessary Subjectivity or Inaccuracy
Many elements of an employee's performance can only be evaluated on a subjective basis, but unnecessary subjectivity can create too much leeway if an unprofessional supervisor wants to justify not giving a certain employee a raise or promotion. Inaccurate statements of fact can also be used to deny an employee a raise or promotion. Either of these situations can open the door to a lawsuit for discrimination in some cases. For instance, if an employee turns 60 and suddenly receives a poor review after always receiving good reviews in the past, he may be able to claim that the poor ratings were a pretext to cover up age discrimination.
A falsified employee evaluation could potentially cost the company tens of thousands of dollars in court. The U.S. Equal Employment Opportunity Commission limits the punitive damages for discrimination based on the size of the company. Punitive damages are limited to $50,000 for all companies with 100 employees or fewer, $100,000 for companies employing between 101 and 200 people, $200,000 for companies employing up to 500 employees and $300,000 for companies employing 501 or more. The employee can also sue for lost wages and any other damages.
Unsafe Conditions and Retaliation
If a supervisor falsifies a performance evaluation to retaliate against an employee for filing a complaint, the company can be found in violation of Title VII by the Equal Employment Opportunity Commission or of whistle-blower protection laws by OSHA. If a supervisor gives a friend an unreasonably positive review to help him get a promotion he isn't truly qualified for, the falsified review can result in unsafe working conditions and the risk of an OSHA fine or lawsuit. OSHA fines can exceed $1 million depending on the details of the infraction.
Defamation of Character
Courts generally recognize that employers need to be free to make subjective judgments about their employees. However, a performance review can open the company to a lawsuit for defamation of character or libel if it contains statements that could destroy an employee's reputation. If a supervisor accuses an employee of stealing, lying or any other major breach of integrity, make sure the accusation can be backed up by documented facts or leave it out of the evaluation. If a supervisor is falsifying matters of fact rather than simply stating a negative opinion, this is a very serious matter because his actions could unfairly ruin the employee's career while exposing the company to liability. In some states, employees who win a defamation lawsuit can only recover their actual damages such as lost wages. In others, the employee can sue even without proving actual damages.
- SKLover Working Wisdom: Performance Review a Problem? 16 Steps to a Robust Rebuttal
- Lmu.edu: New Legal Battlegrounds for Performance Evaluations
- San Francisco Employment Law Firm: Bad Performance Reviews and Defamation Claims at Workplace
- U.S. Equal Employment Opportunity Commission: Damages
- Society for Human Resource Management: OSHA Fines Norfolk Southern $1.1M for Retaliation
- New Jersey Employment Law Blog: Defamation - Presumed Damage Lives On In NJ
Scott Thompson has been writing professionally since 1990, beginning with the "Pequawket Valley News." He is the author of nine published books on topics such as history, martial arts, poetry and fantasy fiction. His work has also appeared in "Talebones" magazine and the "Strange Pleasures" anthology.