Protect Yourself Against Common Discrimination Mistakes These 20 hiring and firing errors--and the suggestions for avoiding them--should help you steer clear of discrimination lawsuits.

Excerpted from Harassment and Discrimination (Entrepreneur Press)

Despite the best efforts of many employers, [discrimination] mistakes happen. Some of those mistakes are the product of a manager who is truly biased on one basis or another. More often, however, employers lose cases not due to a discriminatory manager but because of a poorly managed decision. Ineptness and insensitivity can come across as discrimination even if no discrimination was intended.

Set forth below are a number of mistakes as well suggestions for avoiding such errors. If you follow the advice below, you should be safe from liability (although let's face it, this is America-you can do everything right in this country and still get sued, and sometimes even lose).

Tips in the Hiring, Promotion and Pay Process

1. Create a process. Most employers have figured out that recruiting shouldn't be a haphazard process. The days are gone when all you did was ask your current workers if they had any competent friends who needed jobs (a system, by the way, that often led to inadvertent discrimination in, say, an all white workforce). Done correctly, recruiting involves a system. So does promotion and so does pay.

2. Give managers a plan. Make managers part of the system, but only if they understand the system. That means giving them a plan and ensuring that they're acting in accordance with the plan and not in reference to their own whims. Many of the problems that arise in discrimination law are the result of managerial biases or incompetencies.

By "a plan," tell managers what to look for, give them tools to enable then to make better decisions, and evaluate them on their ability to meet the requirements of the plan. Companies should know what they need in terms of skills and abilities. They should evaluate pay using a system. Based upon that data, managers should be able to make decisions that are consistent with the company's business rather than some personal preference.

3. Focus on objective criteria. Subjectivity continues to reign in regard to hiring and promotion decisions. The most common factor expressed by most employers is whether a candidate "fits" the employer's culture. Legally, this type of system creates risk, particularly for employers that are big enough to be the subject of a class action.

Some subjectivity is not only inevitable, it's legally permitted. To a meaningful degree, an employer is entitled to subjectively determine if a candidate is likely to enjoy the type of business culture presented by the employer. If "fit" is the primary factor, however, subjectivity combined with a statistical imbalance can create a disaster. To reduce the role of "fit," a company should consider stated and verifiable needs as well as criteria to assess whether a candidate can fit those needs. The more the analysis focuses on qualifications, skills, and experience, the less subjective a decision will be. That said, if two candidates both meet the employer's objective needs, an analysis of fit may be appropriate, but only if "fit" is defined in nondiscriminatory terms.

4. Focus on job-related criteria. Part of reducing the impact of subjectivity is to focus on job-relatedness. Some managers spend an entire interview discussing last week's Raiders-Eagles game. Such an interview may show how much the candidate knows about professional football, but such information isn't job-related unless the opening is for a coach or a sports announcer. Interviews should evaluate a candidate's skills relative to the job in question.

Many companies now use a set of interview questions that specifically focus on the skills needed for a job. Such questions relate to how particular job issues are handled, how work-related concerns are identified and analyzed, and how workplace decisions might be made. These "targeted selection questions" are oriented towards job skills, real life work situations, and traits needed for success in the position. "Targeted" and "job-related" questions also help eliminate discriminatory decisions.

5. Perform background checks. The law in virtually every state permits an employer to do background checks of potential candidates. Doing so correctly requires that an employer obtain candidate authorizations under a technical law called the Fair Credit Reporting Act. The same law also requires an employer to give a candidate a chance to explain a problem in the report. However, the Fair Credit Reporting Act does not mandate that an employer actually excuse or not excuse something in a candidate's background report.

Background reports can provide a significant amount of data. In general, employers should focus only on job-related information. A marijuana conviction at age 19 is not likely to make a 35-year-old candidate unfit for a bookkeeping job. However, any employer that hires a driver with a DUI on his or her record is taking a risk of a possible negligence case if the individual later gets in a wreck in a company car after drinking three beers.

6. Depending on the job, consider drug testing. For private sector employers, drug testing is legal unless a specific state law prohibits, restricts or governs such testing. In general, while you should talk to a lawyer about particular state regulations, candidate testing is permitted, especially for safety sensitive jobs. Among other things, statistics suggest that drug testing reduces workers' compensation problems.

7. Consider pre-employment and promotional testing. Pre-employment and promotion-related testing once was considered legally risky. Now, however, tests have become more sophisticated and job-related. In fact, capable testing companies now seek to increase the objectivity of an employment decision, not decrease it. Talk to some of the more credible testing companies like PreVisor and Hogan, and analyze your options. For many jobs, the use of testing will lead to better decisions, greater retention of new hires, and comparatively few legal issues.

8. Be cautious about interview notes. Interview notes tend to be written in a hurried and sloppy manner. Most interviewers are simply trying to get some tidbits of information down on paper so they'll recall some specifics about the candidate once the interview has concluded. Somewhat as a result, interview notes have created legal issues.

Sometimes the notes are nothing short of stupid-"this one's pregnant" is a notable example. Other times they tend to focus on matters that aren't job-related-"good looking guy, seems likeable." In short, poorly written and often misleading interview notes can create serious legal problems. A word to the wise: The less written, the better, unless what's written is job-related. The use of an interview form helps, as does some training given to interviewers before they undertake their tasks.

9. Push for diversity. Diversity is a means of both broadening and bettering one's workforce. Most employers now serve a diverse public of potential buyers and users. In addition, diversity tends to lead to better decision-making. Consequently, seeking diverse candidates is a positive goal.

10. Pay equity is important. A variety of laws address the issue of pay equity from the perspective of discrimination. In general, an employer should pay equal wages for equal work. Even absent the concept of nondiscrimination, however, pay equity should be your goal. Like it or not, employees discuss their pay and salaries with each other and the National Labor Relations Act generally protects such discussions. Given that perceived favoritism will create a negative workplace, pay should correspond to job-related factors, such as qualifications, performance and skills.

Tips in the Discharge Process

1. Communicate about performance. Nobody likes to tell someone that their performance resembles a Hoover vacuum cleaner. In fact, most managers went into management not to communicate with poor performers, but because the money was better and running an operation seemed like a good idea. Some managers can't sleep the night before giving a negative performance review, and most bosses use grade inflation to rate a "D" level performer as a "B-." No wonder people feel misled when they get fired for legitimately bad performance.

What employers fail to understand is that a failure to communicate in an effective and honest fashion can be portrayed as both ineptness and discrimination in court. Words to live by-be direct, tactful and then a little more direct. Most managers are too tactful and way too indirect for everyone's good, often leaving the impression that the employee is performing satisfactorily when he's not.

Afraid to be direct or don't know what to say? Script it out and, if you have to, read from the script-it might seem awkward, but at least you'll get the point across. You don't need to be Bobby Knight or Simon Cowell in your manner of criticism, but you shouldn't be Mr. Over-Sensitivity either. Remember-no one should ever be surprised to be fired, but surprised they will be if you don't give them fair criticism of their deficiencies as well as suggestions to overcome those deficiencies.

2. Remember the pretext issues-consistency, no stupid statements and believability. Most discrimination cases come down to the issue of pretext. Before you make a decision, particularly a discharge decision, check the three primary questions of pretext: consistency among similarly situated people, stupid sounding and often discriminatory sounding statements, and believability.

3. Focus on the "cause" of the action. The employer's burden in a discrimination case is to articulate a legitimate, nondiscriminatory business reason for its actions. The more adeptly that one can articulate such reasons, the better the case for the defense. Be specific and don't rely on "slush" terms. Statements like he's a lousy performer or she had a bad attitude don't mean much in court. However, a statement that "he's a lousy performer because he lost the Jones' account and he failed to show up at two meetings" says a lot. The same specificity gives life to the words "bad attitude," if that problem is properly described as "she doesn't come to work on a regular basis, she can't get along with her teammates, and she doesn't get her assignments done on time."

Beyond being specific and staying away from slush words, be thorough. If there are five reasons why you fired an employee, list them all. The more specificity, the better. In addition, specific examples of inferior performance are difficult to counter. At the same time, don't overreach and pick on trivial problems when legitimate issues can be discussed instead.

4. Consider the perception you're creating. Ever find yourself getting caught in the heat of the moment? Consider the perception you're creating when you're overreacting or mismanaging an issue. Both juries and arbitrators evaluate fairness as much as they do discrimination. While companies sometimes win cases using something called the "equal opportunity jerk" defense, juries don't like jerks (remember-all jurors have worked for at least one jerk at some point in their lives).

Technically, the law regarding discrimination in the United States is that a company doesn't have to be a smart employer or even a fair employer. It only has to be a nondiscriminatory employer. However, if the plaintiff starts telling stories at trial about her jerk-face boss, look out. If you observe the jury carefully, you'll actually see juror #5 elbow juror #6, saying "I had a boss like that once, and this may be my chance to exact a little vicarious revenge."

5. Be patient. Occasionally employment lawyers get calls from clients at 3:30 p.m., asking for guidance as to a discharge discussion that is set to occur at 4:00 p.m. The appropriate legal response is to say, "Wow, you gave me 30 minutes for input-what did she do, punch somebody?" Unfortunately, the answer to that question is often, "Well, no, she's just being fired for bad performance." The appropriate follow-up question from the lawyer is "Well, how long has she worked there?" Regrettably, the answer may be something like "22 years."

Bad performance? Twenty-two years? And must be fired by 4:00 p.m. What's going on here? Answer: The manager in charge snapped and decided "That's it. She's gone."

Not surprisingly, a company gets points for doing things right. It loses points for snap decisions, especially emotionally driven decisions. Inexperienced managers often feel they must act quickly and definitively, while a more measured and carefully evaluated decision would have been better. Knee-jerk reactions just don't play well in court. Don't go there.

6. Don't be too patient. On the other hand, too much patience is just as bad as having no patience at all. Too many employers let too many malcontented employees get away with too many things. Why? Because managers find it's easier to ignore the problem than do something about it. Hoping, however, that someone who is a pain in the posterior will eventually quit isn't much of a strategy, particularly when good employees are leaving because "I hate working with that idiot."

Ever wonder how many good workers have left due to your unwillingness to confront a problem child? In short, being afraid to make a decision isn't a good idea, particularly if the decision is overdue. Granted, firing the jerk could lead to a lawsuit, but perhaps he's going to sue you anyway. Go through the performance process and try to solve the problem-but, if it isn't going to get better, act. That approach sure beats dumping extra work on your best worker just because it's difficult to deal with your worst worker.

7. Treat your employees with dignity and respect. No matter what, don't get disrespectful. Even the malcontents deserve dignity and respect, and you'll risk punishment if you don't give that to them. Granted, you've inadvertently hired a few mud wrestlers in your organization. However, mud wrestlers really don't want to jump in the mud unless you'll jump in with them. Don't do it!

Fortunately, most managers know that they have to stay out of the mud. However, some just can't risk the temptation of reaching into the mud, grabbing a good clump of the goo, and letting it rip-usually in the form of an e-mail. Trust me, the recall button doesn't do any good. In a real case, a human resources director, delighted that her biggest problem child had just quit, sent an e-mail that started with the following words: "Ding, dong, the witch is dead!" Unfortunately, the witch later sued the employer, claiming that she was forced to quit, then in discovery sought every e-mail ever written about her. So how do you think "Ding, dong, the witch is dead" is going to play in front of the jury?

Dignity and respect-don't forget. Whether they deserve it or whether they don't. In particular, don't use that exit interview to get everything off your chest. It just isn't worth it. In another true story, a manager spent over four hours conducting an exit interview of a worker he was firing, effectively rehashing and arguing over 21 years of working together. Amazingly, the manager called in lunch for himself and the worker in the midst of the exit interview. One can only imagine the conversation: "Bill, we're not done firing you yet, what do you want-ham and Swiss or a chef salad?"

8. Think about "triggers" and invitations. Interestingly some employees actually invite you to fire them. What's amazing is how often managers turn down the invitation. It's always an interesting discussion in these situations: "Look at me, look at me-look what I did wrong today!" "Now, now, Jenny, sit back down. We're not going to fire anyone today."

When employees essentially ask to be fired, you should pay some attention to them. However, that isn't to say fire without cause. At the same time, the cause shouldn't be that the manager finally got tired of the employee's antics. Far too many discharges seem caused by the straw that broke the camel's back.

Give a poor performer enough rope, and he'll do the inevitable. Knowing that, employers should look at performance and repeated lower-level discipline situations from two perspectives: (1) What did Kim do to get fired? and (2) What did she do today to cause the decision to occur when it did? Think about the triggering event-if it's petty and you're just tired of Kim, don't do it. One well-known company inadvertently created a problem for itself by repeatedly warning an employee about her attendance record. Finally, after some 15 warnings, the employee came in three hours late for work with no valid excuse. Instead of firing her, however, the manager gave her warning number 16, but apparently said to himself, if she does one more thing wrong, she's gone. Three days later, the employee was fired for being five minutes late to work. Great opportunity missed on Monday, bad opportunity taken on Thursday.

9. Consider public policy as well as nondiscrimination. Most states now require that a discharge decision be both nondiscriminatory and consistent with the public policy of the state. Firing someone because they refused to get out of jury duty looks and smells bad. Summarily discharging a whistleblower is a serious problem. If the reasons for the discharge don't pass the common sense test, they may not pass the state public policy test either. Be cautious, as the nature of the law is slowly expanding from issues of discrimination to matters of public policy.

Unfortunately, a state's public policies aren't usually listed anywhere. However, think back to the perception of the action concern addressed above. If you think a decision could be perceived as unfair, it will be so perceived.

10. Have a system to eliminate knee-jerk reactions. One crucial aspect of managerial decisions and discrimination avoidance is to eliminate the ability of one person alone to fire someone. If two managers must sign off, and particularly if a human resources person gets involved, the ability to claim discrimination is dramatically reduced. It's relatively easy to claim that one manager is ageist or racist, but it's much harder to argue that everyone in the management chain is discriminatory. Use a system, including an investigation piece to the system, before making decisions. The extra time and energy that you spend will be well worthwhile.