How to Discipline and Discharge Without Landing in Court
By: ROBERT C. BOISVERT, JR.
September 2000
Discipline and discharge are important tools for managing the workplace. Unfortunately, they also generate the vast majority of employment disputes and lawsuits.
It would be nice it there were a risk free way to discipline or discharge employees. Regrettably, there is not. There are, however, a number of steps employers can take to significantly reduce risk of liability and improve their legal defenses.
Know Your Risks
To effectively discipline, an employer must first understand the associated legal risks. In particular, employers should be well versed in discrimination, breach of contract, and defamation, which account for the majority of employment claims against employers.
Discrimination. Federal, state, and local laws prohibit employment decisions based on an employee's protected class status: race, color, religion, sex, national origin, age, or disability. In addition, the Minnesota Human Rights Act also prohibits discrimination based on creed, marital status, status with regard to public assistance, membership or activity in a local commission, sexual orientation, or age. Both state and federal law treat sexual harassment as a type of prohibited sex discrimination.
It is critical that employers understand that perception often is more important than reality. Very rarely does an employer intend to discriminate. Instead, the employee perceives that he or she is being treated differently than other employees. If the employee happens to be in a protected class, he or she may assume that is the reason for the different treatment.
Breach of Contract. It is fairly simple to form a contract, intentionally or unintentionally. In Minnesota, a unilateral contract can be formed if an employer's promise is definite, communicated to the employee, and accepted by the employee. The more definite a promise is, the greater the chance a court will deem it an enforceable contract.
To protect against breach of contract claims, employers should preserve the "at-will" employment relationship and avoid making unintended promises. Before taking disciplinary action, an employer should review the employee's personnel file and especially those documents that may be viewed as a contract, such as offer letters, employment agreements, and employee handbooks.
Defamation. A statement is defamatory if it is communicated to someone other than the plaintiff; is false; and tends to harm the plaintiff's reputation and lower him or her in the estimation of the community. The exception is "self publicized" defamation. In Minnesota, an employee can sue for defamation even if no one other than the employee heard the defamatory comment. To reduce this risk, an employer should:
- investigate allegations thoroughly before acting or speaking;
- be factual;
- discuss personnel information on a need-to-know basis only.
Seven Steps to Effective Discipline
Armed with this information, an employer is in a better position to avoid the legal traps inherent in disciplining employees. The following are seven guidelines to follow to effectively discipline:
1. Clearly State Expectations. Employers can do this in a number of ways including training, written policies, job descriptions, ongoing performance evaluation, and employment agreements.
2. Monitor Performance. Surprised employees sue. Because of this, an employer should continually monitor performance and provide feedback. Although not a substitute for ongoing feedback, regular evaluations provide a systematic method for evaluating performance and documenting problems.
Performance evaluations do not necessarily save an employer from liability. According to a jury survey by Dispute Dynamics Inc., 57 percent of those surveyed agreed or strongly agreed that the best evidence of an employee's work is the employee's performance evaluations. Furthermore, 90 percent believed a company is negligent if it does not properly document an employee's performance problems. A well written, candid evaluation may help the employee improve his or her performance. If the employee does not improve, the candid evaluation provides valuable evidence. On the other hand, a poorly written evaluation may undermine an employer's defenses and make discipline or discharge appear unfair.
3. Investigate. Investigate allegations of performance problems or discipline issues before taking action. This is particularly important if the behavior or misconduct is serious, the facts are inconsistent or incomplete, or the behavior or misconduct may result in termination. While many people envision investigations as being large, disruptive, and costly, most investigations consist simply of gathering facts from key witnesses and giving the accused an opportunity to tell his or her side of the story.
Guidelines for conducting an effective investigation include:
- Do not prejudge witnesses;
- Investigate allegations promptly;
- Talk to key witnesses;
- Investigation information should be limited to need-to-know;
- Do not promise confidentiality;
- Provide the accused an opportunity to tell his or her side of the story.