Employees from hell

(FSB Magazine) -- How do you know that you've hired the wrong employee - or waited too long to fire him? If you find two duffel bags full of semiautomatic weapons under his desk , that's a pretty good sign. No, that's not a hypothetical example, although the small-company CEO who told us the story asked that we not use his name. (We can't say we blame him.)

Unfortunately, it's become easier than ever for problem employees to build up the kind of ammunition that makes it difficult to discipline them, thanks to recent court decisions that affect employers of all sizes.

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A worker at giant Burlington Northern & Santa Fe Railway (Charts), for instance, complained to her supervisor that she'd been sexually harassed. Soon thereafter her employer transferred her to another position, from forklift operations to track duty. Her pay remained the same, but the employee argued that she had been retaliated against for filing the complaint. Last June the U.S. Supreme Court found in her favor, even though she was not fired or demoted, the previous standard for proving retaliation. (The decision can be found at supremecourtus.gov/opinions/05pdf/05-259.pdf.)

"Plaintiffs lawyers' ears pricked up," says Bill Demeza, a partner specializing in labor law at the Tampa office of the Holland & Knight law firm (hklaw.com). "Now if you complain about your employer, your whistleblower claim is easier to establish."

That means that if an employee fears he may soon be fired, he can preempt the action by filing a complaint against his boss. Then he can argue that any subsequent disciplinary action is retaliatory.

The key, Demeza says, is to act quickly and resolutely. That can be tricky for employers - especially small ones - many of whom are so focused on urgent sales or financial issues that they ignore personnel warning signs. Or perhaps a problematic employee also happens to be the company's invaluable top sales rep. The problems may seem minor, but they risk growing into fire-worthy offenses, by which point the worker may be able to fight back with a lawsuit.

It's not just charges of retaliation from which employers need to protect themselves.

"There are all of those protected classes, where the minute you raise competency, they raise discrimination," says Kevin Berry, a partner at the Philadelphia law firm Cozen O'Connor.

Meanwhile, employment lawyers are growing increasingly savvy about the best ways to go after business owners.

Roxanne Davis, who represents employees in discrimination cases as principal of Davis Gavsie in Los Angeles, is a member of an educational network through which attorneys meet to discuss the latest changes in labor law and how to use them to employees' advantage. "There is a growing group of lawyers who are learning the field better and better," she says.

Don't say you haven't been warned.

Are you seeing an increase in problem employees? What types of bad behavior have you seen at your company? How have you managed difficult workers? Let us know what your experiences have been by writing to fsb_mail@timeinc.com.