HAHN AGENCY, INC.

Employment Practices Loss Control:
Employee Discipline & Discharges.

The preparation of a written record of employee misconduct and counseling is critical. Governmental agencies, courts and juries expect that employees will have a "paper trail" of documentation supporting discipline and discharge decisions. Without this documentation, the employee may be able to argue that the discipline was unfair or that the misconduct was trumped-up by unscrupulous managers. This page is broken down into the following sections:

Standardization of Employee Discipline Procedures top

Language

Reprimands and memoranda regarding counseling for poor job performance or misconduct should be written in clear, concise language and not contain abusive, inflammatory or derogatory remarks. For example, referring to an employee as a "good for nothing who sabotaged the business" only reflects negatively on the author and does not accurately explain what the employee did. Avoid business or technical jargon and acronyms which may cloud the meaning of the documents so that third parties cannot understand them.

Discipline and counseling records should be dated and signed by the supervisor involved. These documents should also be reviewed with the employee concerned. Employees should be asked to sign these records, not to acknowledge that they agree, but to indicate that they have reviewed the documents. If the employee refuses to sign, that fact should be noted and witnessed by the supervisor on the disciplinary record.

A manager should conduct an investigation prior to disciplining an employee to verify that the facts warrant the discipline proposed.

No manager should attempt to polygraph an employee without prior approval from those responsible for human resources matters. If polygraph tests are to be given to employees (such as those suspected of embezzlement), the detailed requirements of the Employee Polygraph Protection Act and the laws of those states that also regulate or prohibit polygraph testing must be followed.

In situations in which the misconduct involves a complex fact pattern or serious misconduct (such as potentially illegal activity), the employee may be suspended pending a thorough investigation. This will allow the organization to interview witnesses, review necessary documents and make an informed decision.

Managers should not threaten the employee with criminal prosecution in order to secure the employee's admission of wrongdoing, resignation or other concessions.

Managers should enforce workplace rules and procedures consistently and even-handedly. Determining the proper discipline for employees requires the manager to consider not only the offense, but also the discipline given in other similar situations. For example, if members of different ethnic groups or races are involved in fights, they must be disciplined in a similar manner, based upon the facts. One employee should not receive a written warning and another be discharged. Degrees of involvement can, of course, be considered. If one employee was clearly the aggressor; he or she can be disciplined more severely than an employee who was the victim and tried to withdraw from the altercation.

Organizations may wish to restrict those supervisors and managers who can give discipline or require prior approval from upper-level management or an employee responsible for human resources matters.

Documentation

After the investigation has concluded, the grounds for any discipline should be recorded and corrective measures outlined. Employees should be given an opportunity to respond to the discipline or explain their conduct. If employees wish to respond to discipline in writing, they should be permitted to do so. The response will commit the employee to a version of the event that will be difficult to change later and will also give the employee a feeling of being treated fairly. Further, the response may correct errors in the investigation or put the employee's conduct in the proper perspective.

Dealing with Discharge top

Discharges are the most frequent sources of lawsuits and organization liability. The following procedures should be considered when discharge is a possible remedy for misconduct or poor performance.

No employee should be discharged without the prior approval of senior management. This procedure will prevent front-line supervisors from improperly terminating employees in the heat of anger or due to their ignorance of employment laws.

The fact that employees are "at-will" does not mean that there should not be business related reasons for their discharges. Employees can raise discrimination claims, regardless of at-will status. Administrative agencies, judges and juries all assume that employers act for a reason. If the organization cannot provide a reasonable explanation for termination, these fact-finders may determine that improper reasons motivated it.

Prior to an employee's discharge for misconduct, poor performance or other business-related reasons, a knowledgeable individual should review the personnel file and the soundness of the decision. This review can provide a variety of benefits. It can confirm that there is a "paper trail" supporting the termination. A review can also reveal "smoking gun" documents that could create a problem for the organization in litigation, such as documents making negative references about an employee's race, sex, age, religion or disability. Finally, a pre-termination review may prevent the organization from discharging an employee on a "significant day" such as the employee's birthday, just before a holiday or when the employee or a member of his or her family is having health or other problems. Since terminations are always stressful, employees who are discharged at a time when they are already subject to significant stress are more likely to retaliate against the organization by filing a lawsuit.

Discharges should never be made in the "heat of the moment," when emotions are running high and the parties may make statements they later regret, particularly if litigation occurs. Once a reasoned decision to discharge an employee is made, the termination itself should be communicated to the employee in a calm business-like manner. Organizations may wish to have one knowledgeable person communicate all discharge decisions to employees. This person will lack emotional involvement in the decision and should also be able to advise the employee about pay, benefits and other severance issues.

Exit Interviews

Exit interviews are useful, regardless of the reason for the employee's departure from the organization. They can resolve a number of items, including the completion of termination forms, the return of organization property and the communication of additional benefit information. The exit interview may also present an opportunity to identify employees likely to bring suit or become violent in the future. These interviews can be combined with the discharge conference mentioned above.

Some organizations have reacted to increased employment litigation by attempting to secure releases from employees who are either discharged or resign under disciplinary pressure, particularly if they believe an employee might bring a lawsuit against them.

Releases of employment claims must be supported by "consideration." Consideration is something of value which must be more than the employee is already entitled to as a result of the termination. Releases must also be knowing and voluntary, which essentially requires that employees understand what they are giving up and not be forced to sign without adequate review. Employees should be given time to consider severance documents and releases and to consult with financial and legal advisors.

If the right to bring age discrimination claims under the ADEA is to be released, the strict requirements of the OWBPA, discussed previously, must be followed.

Employees should be sent the appropriate notices for continuation of health insurance coverage, if applicable, under the Consolidated Omnibus Reconciliation Act ("COBRA"), by registered mail. Discharged employees should be given their final paychecks, including accrued vacation pay, at the time of discharge, or as otherwise required by state or local law.

Post-Discharge Procedures top

Many terminated employees request copies of their personnel files. A former employee's right to review or copy his or her personnel files depends on state law. In some states, employees and former employees have a statutory right to review or receive copies of their personnel file. In those states where disclosure is not required, whether to make a voluntary disclosure is a management decision. A well-documented file, supporting the discharge decision, may discourage future litigation. On the other hand, a file without a "paper trail" may persuade former employees or their legal counsel that lawsuits will be successful. Whatever policy is adopted, it must be uniformly followed.

The organization must decide how it will handle reference requests for discharged employees. Responses that include information about misconduct or poor performance may invite defamation or invasion of privacy lawsuits. To minimize potential liability, many organizations have adopted a "name, rank and serial number" policy, providing only the dates of employment, title, job duties and perhaps salary. These organizations will not respond to questions about performance or divulge the reasons for the employee's departure. Whether more extensive information is given, however, is an organization's business decision and must be uniformly followed.

Only a single individual or small group should be authorized to respond to reference requests. They should not respond to any requests unless written authorizations are received from the former employees. In addition, those responding should keep written records of all requests received and information given in response.

Employment Practices Loss Control

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