CEO Today Magazine October 2019 Edition

TIPS & ADVICE www.ceotodaymagazine.com 38 Even the savviest executive may be stymied when unfairly criticised or wrongfully accused. Compensation and careers are on the line, and, although the executive may know that something is not right, he or she may not know how to prove it. That fear is often based on the lack of direct evidence - the proverbial “smoking gun” that would exonerate the executive and protect his or her compensation and career. However, employment lawyers do not need direct evidence to prove a case. Instead, employment lawyers rely on the evidence that is available, which is often circumstantial evidence. Those are the circumstances from which a jury, judge or arbitrator may conclude that the lawful explanation asserted by a company is not the real explanation for the adverse action taken against the executive. Many employment cases may be proven by circumstantial evidence. For example, under an executive employment agreement, an executive terminated “without Cause” is often entitled to enhanced severance payments, forward or continued vesting of equity and other favourable severance benefits. If a company trumps up “Cause” so as to rob the executive of those enhanced benefits, the executive may bring a claim for breach of contract and may use circumstantial evidence to prove that the alleged “Cause” was either factually not true or not the real reason for the termination. Likewise, an executive may use such evidence to prove that the real motive was to retaliate against the executive for whistleblowing or to get rid of an older executive in order to make room for someone younger. Read on to learn how employment lawyers prove such claims with circumstantial evidence. Many of the examples are from the field of discrimination law but the concept – using circumstantial evidence to prove elements of an employment claim – applies almost universally in the employment field. The Elements of an Employment Claim As a general rule, almost all employment claims require proof that the reasons given for the adverse employment action are either false or not the real reason. In whistleblowing and discrimination cases, the executive will also have to prove that the real reason was an illegal reason – either to retaliate for legally protected whistleblowing or to unlawfully discriminate based on the executive’s membership in one or more protected categories (age, disability, national origin, race, religion, sex, and so forth, depending on the jurisdiction). By way of example, the four elements of an employment discrimination claim are the following: 1. That he or she is a member of one or more protected categories, e.g., 40 years old or older; 2. That he or she has suffered an adverse employment action, e.g., an employment termination; Protecting Executive Compensation and Careers with Circumstantial Evidence By David I. Brody and Jaclyn L. McNeely

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