Avoiding Liability with Proper Discipline and Discharge Procedures

1. Presented by: Ana S. Salper September 10, 2008 Avoiding Liability with Proper Discipline and Discharge Procedures

2. Importance of Discipline and Termination Policies • Every employer faces discharge decisions • Presumption of “employment-at-will” eroded by legislation (e.g. race, age, sex, and disability discrimination), judicial enforcement of public policy (whistle blowing protection), tort and express and implied contract theories

3. Importance of Discipline and Termination Policies • Employers must always be careful to ensure that their disciplinary and termination decisions are for job-related and nondiscriminatory reasons, do not violate any contractual commitments and comply with applicable federal, state and local laws, and Company policies and procedures • Failure to do so may provide a discharged employee with the opportunity to argue that he/she was really terminated for a different reason

4. Importance of Discipline and Termination Policies • Employer can take various precautions that will minimize lawsuits brought by their former employees, and to minimize company’s exposure if suits are brought, including: • consistently applied discipline and termination procedures • documentation of the reasons for actions • following practical rules in communicating discharge decisions and their aftermath

5. Discipline Checklist • Prior to taking disciplinary action, consider this checklist of factors. If you get many "no's," you might want to re-examine the situation. • Does management know all the facts accurately? • Is the violated rule, policy or procedure published? If not, can you prove that the employee otherwise knew of it? • Is the violated rule, procedure or policy reasonably related to the orderly, efficient or safe operation of the Company? • If other employees have violated this rule, procedure or policy, did they receive the same disciplinary action as this employee?

6. Discipline Checklist • Does this employee have the worst record of all employees in connection with the violation of the rule, procedure or policy? If not, are there extenuating/unusual reasons why discipline is necessary? • Has this employee been warned previously for violation of this rule, procedure or policy? If yes, when? • Has this employee been warned previously for violation of other rules, procedures or policies? If yes, when?

7. Discipline Checklist • In cases where appropriate - has the employee been given lesser penalties according to work rules, past practice, in line with current industrial relations practice? (The gradual warning or step-up of penalties does not apply to major infractions such as theft or assault when there is absolute proof.) 9. For employees represented by a union - were collective bargaining agreement procedures followed? Were Weingarten rights given if properly requested? What has the Company done in other similar cases? Has the union been notified?

8. Discipline Checklist • Was the incident that triggered the contemplated action carefully investigated? • Does Company evidence include names of witnesses, dates, time, places and other pertinent facts on all past violations, including the last one? • Is the degree of discipline to be imposed on this employee related to seriousness of the proven offense, the employee's past record and his/her length of service? • Is this employee personally guilty or only guilty by association with another? • Does the employee have a "reasonable" excuse for the infraction of the rule?

9. Discipline Checklist • Has the employee been given an opportunity to give his/her version of matters? • Is the documentation consistent with the actual reason for discipline? • In considering discipline, did you feel you had sufficient time to make a determination? • Would termination of the employee prevent the vesting of benefits in the immediate foreseeable future? • Were any representations made to the employee other than that the employee was terminable-at-will? (E.g., was the employee told his job was "secure for life" or "as long as he wanted it" or "as long as the corporation keeps growing?)

10. Progressive Discipline • What is the goal of progressive discipline? • To improve employee performance and assist the employee to meet company’s performance expectations • To enable a company to fairly (with substantial documentation) terminate employees who are ineffective and unwilling to improve

11. Progressive Discipline • What is the ideal progressive discipline policy? • Provides for range of action depending on nature of offense and work record • Makes clear that some offenses usually will result in immediate termination • Provides progressive corrective action for other offenses, typically a verbal warning, a written warning, suspension and then termination • Reserves right to deviate at management’s discretion

12. Progressive Discipline • It is always easier to defend against a claim of wrongdoing when good cause exists for the action • Evidence that an employee was previously warned about the same or similar misconduct, or advised that such conduct could lead to immediate discharge, can go a long way towards avoiding or defending a lawsuit • Employers must be careful that progressive discipline system itself becomes the basis for a claim that it was not followed

13. Progressive Discipline – Oral Warning • A conversation between a supervisor and an employee held in private about a disciplinary problem. • Designed to correct a performance or disciplinary problem by bringing it to the employee's attention in a serious but friendly manner.

14. Progressive Discipline – Written Warning  Normally the second step after an Oral Warning or Counseling and no change in performance or behavior. • Designed to correct a problem by discussing it with the employee and providing a written record of that conversation.

15. Documentation: Why Do You Need It? • To clearly identify performance improvement areas • To give employees a road map and time to improve • To minimize miscommunication between managers and employees • To avoid memory discrepancies between managers and employees • To avoid or defend wrongful termination lawsuit

16. Documentation: What Should It Be? • Accurate • Objective facts concerning actual performance as they occur • Only job related actions or performance deficiency • Direct observations – don’t rely on hearsay • Avoid stereotypical wording suggesting discrimination • Objective • Describe specific actions or performance deficiency • No evaluative statements or personality traits (unless directly related to performance) • Consistent • Record actions, performance deficiencies, as well as positive performance • Same basic format and detail for each similar situation – someone should review • Follows company policies • Maintain documentation on all employees

17. Documentation • What information should it contain? -name; -date of the infraction; -specific rule violated or performance problem that has occurred; -reference to previous conversations about the problem; -statement of the specific expected change in the employee's performance or behavior and what will happen if expectation is not met; -any comments or statements the employee made during the conversation

18. Corrective Action- 10 Key Points • Don’t procrastinate • Keep it private • Be honest & respectful- do not threaten • Be consistent and equal • Document and stick to the facts • Discuss accountability • Give employee opportunity to explain • Propose solutions • Get approval and witness • Follow up

19. Involuntary Termination • When is Involuntary Termination Warranted? -Two types of involuntary terminations: - Resulting from employee performance or attendance problems – usually given a warning and an opportunity to improve - More serious types of misconduct, such as insubordination, dishonesty, misconduct, theft, unethical practices, fraud, and falsification of records – generally discharged immediately, without warning or a period of time in which to take corrective action

20. Specific Grounds For Discipline And Discharge • Absenteeism/Tardiness • Do guidelines exist? • Consistency • “No-fault” plans. • Mitigating factors – Title VII? FMLA? ADA?

21. Specific Grounds For Discipline And Discharge • Insubordination • Direct refusal to do an assigned job or obey an order; • Willful failure to do an assigned job or obey an order; or • Cases where employees challenge, criticize, obstruct, abuse or interfere with management's supervision. • Was order clearly understood? • Was an excuse offered and reasonable?

22. Specific Grounds For Discipline And Discharge • Negligence/Carelessness • What was the negligent act? • Past history. • Other factors involved. • Mitigating circumstances. • Below Standard Performance • Standard established and reasonable? • Other factors. • Extenuating circumstances.

23. Specific Grounds for Discipline and Discharge • Violating Drug/Alcohol policy • Theft, attempted theft • Willful damage to company property • Failing to report to work when scheduled • Willful falsification of company records • Assaulting co-worker or threatening bodily harm • Dishonesty • Harassment • Being in possession of illegal weapons on company premises • Posing direct threat or present risk of injury to oneself or others

24. Reviewing A Proposed Discharge • Identify the valid, job related, reason for the termination. • If the termination is due to a specific incident, determine whether a proper investigation has been conducted and documented in writing. • Ensure that the employee was informed about the problem. • Ensure that the employee’s overall work record has been reviewed.

25. Reviewing A Proposed Discharge • Look into any extenuating circumstances which may have played a role. • Look for any evidence of illegal harassment or discrimination. • Look for evidence of illegal retaliation. • Retaliation = taking an adverse action against an employee because of the employee’s exercise of a legal right such as reporting wrongdoing or reporting health/safety violations.

26. Reviewing A Proposed Discharge • Determine if the recommendation is consistent with prior cases involving similar facts. If not, is there a valid justification? • Ensure that the employee has received all the rights and benefits of employer policies (e.g. progressive discipline).

27. Reviewing A Proposed Discharge • Have the recommendation reviewed by someone familiar with employment law. • Explore alternatives to termination, such as transfer or demotion. • Consider offering a severance package in exchange for a release of any claims.

28. Reviewing A Proposed Discharge • Smell test: • Does it make sense? • Does it seem fair? • Does it seem excessive? • Seriousness of infraction. • Length of service.

29. Suspensions • If it is deemed necessary to temporarily remove an employee from the workplace because of violation of a policy and/or to provide time to investigate circumstances of alleged violation, the employee should be suspended with pay • Suspension without pay only per contract/agreement

30. Communicating the Termination Decision • The termination meeting is critical because it often dictates the employee's course of action. • An employee whose termination has been poorly managed is more likely to take legal action against the employer. • It is wise to invest in a careful, concerned approach, which could include offering the employee, counseling services, outplacement assistance and even an agreement with a release.

31. Communicating the Termination Decision • Terminating an employee can be the most difficult task a supervisor faces – emotions must be put aside. • Clear communication of a termination decision begins well before the employee is actually terminated - in prior warnings and clear policies.

32. Communicating the Termination Decision • Termination Meeting • Two company representatives present • Give explanation/reason for termination • Be truthful, but provide no more information than necessary – your statements will be repeated • Let employee respond, but avoid argument • No longer than necessary • Address benefits, references, obligations • Document meeting • Security issues – plan in advance but avoid suggestion of defamation, false arrest, etc.

33. Communicating the Termination Decision

34. Communicating the Termination Decision

35. Termination-Security Considerations • Schedule for end of the day. • Alert security, but avoid obvious presence unless necessary or strong reason to suspect a problem. • Be patient if employee initially resists leaving. • Arrange immediate cut-off of access to building, voice-mail, email, computers – pull plug while in termination meeting. • Escort to retrieve personal possessions or arrange for later pickup or delivery. Retrieve purse or coat. • Request keys, building card, id’s, return of company property.

36. Termination-What to Tell Co-Workers • Do not tell coworkers in advance. • Avoid revealing details about reason for termination. • In some circumstances it may be necessary to reveal limited information in order to quell a rumor or for other business reasons. • If asked, the supervisor may say that the individual has left, has decided to look for other employment, or that he/she is not free to talk about it. • If the former employee accepted the dismissal, he/she can say that the employer and the former employee agreed to part company.

37. Conducting Exit Interviews • If possible (and depending on the circumstances) an exit interview should be conducted for all terminating employees, whether voluntary or involuntary. • Information obtained in these interviews can be invaluable in evaluating policies and procedures, in spotting turnover problems and in the possible retention of a valued employee, and even in anticipating possible litigation. • Personnel/Human Resources (not the immediate supervisor) should conduct the interview. The supervisor should complete the paperwork to terminate the employee from the payroll.

38. Conducting Exit Interviews • Preparation • Review questions outlined in the Exit Interview Guide and the information in the employee's personnel file. • Arrange for privacy and allow enough time to obtain the information required. • Arrangements should be made to conduct exit interviews on Company time with employees working second and third shifts. • Compile all appropriate forms (Cobra information, 401(k), Pension, etc.).

39. Conducting Exit Interviews • The Interview • Have the employee report to Personnel/Human Resources. If voluntarily leaving, make employee aware of the reason for the interview in advance. • Maintain a relaxed atmosphere. Establish trust by assuring the terminating employee that his/her comments will remain confidential. Ask that the employee also treat the interview confidentially. • Convey the policy that the individual is assisting in evaluating Company policies and procedures and that his/her comments will not affect references. • Tell the employee you would appreciate frankness and openness, as the employee's comments may be beneficial to fellow employees.

40. Conducting Exit Interviews • The Interview (cont’d) • Allow the interview to unfold naturally. Do not ask questions in sequence but make them part of the conversation. Do not allow it to become a question and answer session. Always try to phrase inquiries so they cannot be answered with a "yes" or "no.” • Exercise care in reacting to gripes and dissatisfactions. Your objective is to elicit information. Remember, your reactions and comments will filter through the organization. • Be sure to discuss benefit issues, unused vacation, final paycheck, and Company property with employee. Collect ID Badge, keys, and any security access cards.

41. Conducting Exit Interviews • Close • Thank the terminating employee for his/her cooperation. • Immediately complete an Exit Interview Form when the interview is over. Record the employee's comments without editorializing. Maintain a file copy of the form in the personnel file.

42. Tips on How to Recognize Potential Litigant • Particular attention should be given to employees who: • Are rarely or never satisfied • Have made other complaints about the Company, supervisors, or particular treatment at work • Have made comments based on being a member of a protected class • Have a “chip on the shoulder” type of attitude

43. Tips on How to Recognize Potential Litigant (cont’d) • Have a personal grudge against the Company or a particular supervisor • Might have trouble securing another position elsewhere • Asked a lot of questions when they learned they would be terminated • Being extremely angry and/or uncooperative at the termination meeting • Have asked for copies of personnel file or policies

44. FINAL THOUGHT . . . TRAIN MANAGERS TO ALWAYS CONSULT WITH HR BEFORE TAKING DISCIPLINARY ACTION!

45. Presented by: Ana S. Salper September 10, 2008 Avoiding Liability with Proper Discipline and Discharge Procedures