Category Archives: Employee Discipline

WORKPLACE INVESTIGATIONS: SHIELD FOR BUSINESSES OR SWORD FOR PLAINTIFFS?

HR Law Insider’s last edition discussed — using the wacky world of the NFL as an example — workplace investigations.  Businesses should anticipate that their workplace investigations, or lack thereof, may be scrutinized by the EEOC, a judge, or a jury. A good investigation is an effective shield against employment claims; a bad one is a sword for plaintiffs’ lawyers.

EEOC GUIDELINES FOR WORKPLACE INVESTIGATIONS

The EEOC has published guidelines which include many of the elements of an effective investigation:

Effective Investigative Process

An employer should set up a mechanism for a prompt, thorough, and impartial investigation into alleged harassment. As soon as management learns about alleged harassment, it should determine whether a detailed fact-finding investigation is necessary. For example, if the alleged harasser does not deny the accusation, there would be no need to interview witnesses, and the employer could immediately determine appropriate corrective action.

If a fact-finding investigation is necessary, it should be launched immediately. The amount of time that it will take to complete the investigation will depend on the particular circumstances. If, for example, multiple individuals were allegedly harassed, then it will take longer to interview the parties and witnesses.

It may be necessary to undertake intermediate measures before completing the investigation to ensure that further harassment does not occur. Examples of such measures are making scheduling changes so as to avoid contact between the parties; transferring the alleged harasser; or placing the alleged harasser on non-disciplinary leave with pay pending the conclusion of the investigation. The complainant should not be involuntarily transferred or otherwise burdened, since such measures could constitute unlawful retaliation.

The employer should ensure that the individual who conducts the investigation will objectively gather and consider the relevant facts. The alleged harasser should not have supervisory authority over the individual who conducts the investigation and should not have any direct or indirect control over the investigation. Whoever conducts the investigation should be well-trained in the skills that are required for interviewing witnesses and evaluating credibility.

Questions to Ask Parties and Witnesses

When detailed fact-finding is necessary, the investigator should interview the complainant, the alleged harasser, and third parties who could reasonably be expected to have relevant information. Information relating to the personal lives of the parties outside the workplace would be relevant only in unusual circumstances. When interviewing the parties and witnesses, the investigator should refrain from offering his or her opinion.

The following are examples of questions that may be appropriate to ask the parties and potential witnesses. Any actual investigation must be tailored to the particular facts.

Questions to Ask the Complainant:

  • Who, what, when, where, and how: Who committed the alleged harassment? What exactly occurred or was said? When did it occur and is it still ongoing? Where did it occur? How often did it occur? How did it affect you?
  • How did you react? What response did you make when the incident(s) occurred or afterwards?
  • How did the harassment affect you? Has your job been affected in any way?
  • Are there any persons who have relevant information? Was anyone present when the alleged harassment occurred? Did you tell anyone about it? Did anyone see you immediately after episodes of alleged harassment?
  • Did the person who harassed you harass anyone else? Do you know whether anyone complained about harassment by that person?
  • Are there any notes, physical evidence, or other documentation regarding the incident(s)?
  • How would you like to see the situation resolved?
  • Do you know of any other relevant information?

Questions to Ask the Alleged Harasser:

  • What is your response to the allegations?
  • If the harasser claims that the allegations are false, ask why the complainant might lie.
  • Are there any persons who have relevant information?
  • Are there any notes, physical evidence, or other documentation regarding the incident(s)?
  • Do you know of any other relevant information?

Questions to Ask Third Parties:

  • What did you see or hear? When did this occur? Describe the alleged harasser’s behavior toward the complainant and toward others in the workplace.
  • What did the complainant tell you? When did s/he tell you this?
  • Do you know of any other relevant information?
  • Are there other persons who have relevant information?

Credibility Determinations

If there are conflicting versions of relevant events, the employer will have to weigh each party’s credibility. Credibility assessments can be critical in determining whether the alleged harassment in fact occurred. Factors to consider include:

  • Inherent plausibility: Is the testimony believable on its face? Does it make sense?
  • Demeanor: Did the person seem to be telling the truth or lying?
  • Motive to falsify: Did the person have a reason to lie?
  • Corroboration: Is there witness testimony (such as testimony by eye-witnesses, people who saw the person soon after the alleged incidents, or people who discussed the incidents with him or her at around the time that they occurred) or physical evidence (such as written documentation) that corroborates the party’s testimony?
  • Past record: Did the alleged harasser have a history of similar behavior in the past?

None of the above factors are determinative as to credibility. For example, the fact that there are no eye-witnesses to the alleged harassment by no means necessarily defeats the complainant’s credibility, since harassment often occurs behind closed doors. Furthermore, the fact that the alleged harasser engaged in similar behavior in the past does not necessarily mean that he or she did so again.

Reaching a Determination

Once all of the evidence is in, interviews are finalized, and credibility issues are resolved, management should make a determination as to whether harassment occurred. That determination could be made by the investigator, or by a management official who reviews the investigator’s report. The parties should be informed of the determination.

In some circumstances, it may be difficult for management to reach a determination because of direct contradictions between the parties and a lack of documentary or eye-witness corroboration. In such cases, a credibility assessment may form the basis for a determination, based on factors such as those set forth above.

If no determination can be made because the evidence is inconclusive, the employer should still undertake further preventive measures, such as training and monitoring.

CONCLUSION

The EEOC guidelines provide employers with an excellent understanding of how the EEOC “thinks,” how it will scrutinize employers’ investigations, and how it will decide cases.

The EEOC’s guidelines, however, are just that: guidelines.  These particular guidelines involve a hypothetical complaint of sexual harassment.  No two situations — or complaints — are  alike.  Thus,  each investigation should be planned and conducted based on the unique facts that are presented.

Companies should consult counsel when launching an investigation, making difficult decisions during the investigation, and when a final conclusion is about to be reached.

For how NOT to conduct an investigation, enjoy Inspector Clouseau in action:

 

 

LESSONS FOR EMPLOYERS ARISING FROM THE PATRIOTS ATTEMPT TO SACK THE NFL’S INVESTIGATION

The NFL vs. Tom Brady saga is the gift that keeps on giving.  Yesterday, the New England Patriots released a statement called “The Wells Report in Context.”  It should be named “An Attack on the Wells Report and Why We Hate the NFL” because it goes after Wells’ conclusions — which conclusions the NFL adopted — in a multitude of ways.

The Patriots statement attacking the Wells report is often as amusing as it is long.  One example:  According to the Patriots, ball boy Jim McNally didn’t call himself “The Deflator” because he took air out of footballs at the behest of Tom Brady;  he called himself that because he’s overweight and trying to lose a few pounds.  Many doubt the Patriots spin on the self-styled “deflator.”

ANY ORGANIZATION THAT CONDUCTS AN INVESTIGATION SHOULD EXPECT THAT IT WILL BE SCRUTINIZED

When any business conducts a workplace or other investigation, that investigation may later be challenged in an EEOC proceeding, lawsuit, or arbitration.  It is thus critical to get the investigation right — to make it unassailable.

But investigations often involve difficult credibility calls, memory foibles, and ambiguous evidence.  What if a company’s “heart” is in the right place — it means well — but it is later proved that it came to the wrong conclusion?

EMPLOYERS ARE HELD TO A GOOD FAITH STANDARD, NOT ONE OF PERFECTION 

If a company terminates or disciplines an employee based on a good faith, reasonable belief that an employee engaged in misconduct, but is later shown to be mistaken, the company will likely not  be found liable for discrimination.

For example, in Cervantez v. KMGP Services Co. a company fired an employee after it discovered that his computer User ID and password had been used to access pornographic Web sites from one of the company’s shared computers in the break room. The company conducted an investigation and determined that the plaintiff had been at work on the dates that his User ID was used to access hundreds of these sites. When the employee was told that he was being fired, he denied having visited any such Web sites, and then sued the employer, alleging that he was fired because of his age in violation of the Age Discrimination in Employment Act.

After he was fired, the employee obtained a copy of the log of Web sites he allegedly visited with his User ID. He admitted that the log showed attempts to access prohibited sites on dates that he was at work, but he also identified attempts made on dates that he did not work or at times long after his shift had ended.

A federal court found that the employer’s reason for discharging the employee – violation of its computer use policy – was a legitimate, nondiscriminatory reason, and that the apparent inconsistencies in the log detailing the Web sites the plaintiff allegedly accessed did not demonstrate that the employer’s reasons for firing him were pretextual. The Court ruled that “a fired employee’s actual innocence of his employer’s proffered accusation is irrelevant as long as the employer reasonably believed it and acted on it in good faith.”

THE SAME “GOOD FAITH” STANDARD APPLIES TO EMPLOYEE COMPLAINTS

An employee is protected against retaliation for opposing perceived
discrimination if the employee had a reasonable and good faith belief that the opposed practices were unlawful.  Thus, employer retaliation can be found whether or not the challenged practice ultimately is found to be unlawful.

As one court  has stated, requiring a finding of actual illegality would “undermine Title VII’s central purpose, the elimination of employment discrimination by informal means;  destroy one of the chief means of achieving that  purpose, the frank and non-disruptive exchange of ideas between employers  and employees; and serve no redeeming statutory or policy purposes of its own.”

Here are two examples applying the “good faith” standard:

Example 1 – Employee complains to her office manager that her
supervisor failed to promote her because of her gender.
(She believes that sex discrimination occurred because she
was qualified for the promotion and the supervisor promoted
a male instead.)  Employee has engaged in protected opposition
regardless of whether the promotion decision was in fact
discriminatory because she had a reasonable and good faith
belief that discrimination occurred.

Example 2 –  Same as above, except the job sought by Employee was
in accounting and required a CPA license, which Employee lacked
and the selectee had.  Employee knew that it was necessary to have
a CPA license to perform this job.  Employee has not engaged in
protected opposition because she did not have a reasonable
and good faith belief that she was rejected because of sex
discrimination.

TAKEAWAY FOR EMPLOYERS

Perfection is not of this world.  Courts and judges recognize this fact.  Thus, if an employer terminates or disciplines an employee based on a good faith, reasonable belief of misconduct, in most cases the employer will obtain a defense verdict even if it is  determined the employer was mistaken.

The key, therefore, is for employers to be able to prove that they had a good faith, reasonable belief when they disciplined or terminated the employee.  This is primarily accomplished by conducting a prompt and thorough investigation when misconduct comes to light, and by maintaining a solid documentary record of the investigation and evidence proving the misconduct.

HR Law Insider’s next article will drill down on what constitutes a good investigation versus a bad investigation — providing  employers the tools to make good faith decisions that will withstand EEOC, court, and public scrutiny.

Until then, the football follies are sure to continue, providing more fodder for comics, who are having a field day:

THE NFL LOWERS THE BOOM ON TOM BRADY AND THE PATRIOTS

This afternoon the NFL gave New England Patriots quarterback Tom Brady a four-game suspension for his role in the team’s illegal deflation of footballs. The league also fined New England $1 million and took away two draft picks, including a first-round choice in 2016, citing “conduct detrimental to the integrity of the N.F.L.”

NFL punishes Patriots

THE NFL STATEMENT READS LIKE AN EMPLOYEE DISCIPLINE REPORT

The NFL’s statement reflects a methodology (1) employers use to determine employee discipline and (2) governing agencies use to sanction businesses:

“It is impossible to determine whether this [ball deflation] activity had an effect on the outcome of games or what that effect was. There seems little question that the outcome of the AFC Championship Game was not affected. But this has never been a significant factor in assessing discipline. There are many factors which affect the outcome of a game. It is an inherently speculative exercise to try to assign specific weight to any one factor. The key consideration in any case like this is that the playing rules exist for a reason, and all clubs are entitled to expect that the playing rules will be followed by participating teams. Violations that diminish the league’s reputation for integrity and fair play cannot be excused simply because the precise impact on the final score cannot be determined.

“Here, there are several factors that merit strong consideration in assessing discipline. The first is the club’s prior record. In 2007 the club and several individuals were sanctioned for videotaping signals of opposing defensive coaches in violation of the Constitution and Bylaws. Under the Integrity of the Game Policy, this prior violation of competitive rules was properly considered in determining the discipline in this case.

“Another important consideration identified in the Policy is ‘the extent to which the club and relevant individuals cooperated with the investigation.’ The Wells report identifies two significant failures in this respect. The first involves the refusal by the club’s attorneys to make Mr. McNally available for an additional interview, despite numerous requests by Mr. Wells and a cautionary note in writing of the club’s obligation to cooperate in the investigation. The second was the failure of Tom Brady to produce any electronic evidence (emails, texts, etc.), despite being offered extraordinary safeguards by the investigators to protect unrelated personal information. Although we do not hold the club directly responsible for Mr. Brady’s refusal to cooperate, it remains significant that the quarterback of the team failed to cooperate fully with the investigation.

“Finally, it is significant that key witnesses — Mr. Brady, Mr. Jastremski, and Mr. McNally — were not fully candid during the investigation.

“In accepting the findings of the report, we note that the report identified no evidence of wrongdoing or knowledge of wrongdoing on the part of any member of the coaching staff, including Head Coach Bill Belichick, or by any Patriots‘ staff member other than Mr. Jastremski and Mr. McNally, including head equipment manager Dave Schoenfeld. Similarly, the Wells report is clear that Patriots ownership and executives did not participate in any way in the misconduct, or have knowledge of the misconduct.

“Nonetheless, it remains a fundamental principle that the club is responsible for the actions of club employees. This principle has been applied to many prior cases. Thus, while no discipline should or will be imposed personally on any owner or executive at the Patriots, discipline is appropriately imposed on the club.”

LET THE APPEALS AND RECRIMINATIONS BEGIN

Brady and the Patriots are almost sure to challenge the NFL’s discipline.  The HR Law Insider will publish a follow-up edition after the dust settles.  Until then, I am considering applying for an assistant coach position to try and smooth the waters in New England and ensure that all balls remain INflated:

HOW TO DEAL WITH OFF-DUTY EMPLOYEE MISCONDUCT

Most employee handbooks state that employees may be disciplined or discharged for various types of misconduct within the workplace. But when, if at all, may employers terminate employees for misconduct outside the workplace? This edition of the HR Law Insider provides the answers.

FIRST THINGS FIRST: MAKE SURE YOUR EMPLOYEE HANDBOOK OR EMPLOYMENT CONTRACT ADDRESSES OFF-DUTY MISCONDUCT

All employee handbooks should contain language stating that off-duty misconduct may result in discipline up to and including discharge. Such provisions should provide the employer with maximum discretion to determine what types of off-duty misconduct qualify for discipline.

By way of example, the Standards of Conduct section of an employee handbook might include the following as a terminable offense: “Employee misconduct outside the workplace, including illegal, immoral, or offensive acts, which may, as determined in the Company’s sole discretion, reflect adversely upon the Company, impact the Company negatively, raise a safety concern, adversely affect the employee’s ability or credibility to fulfill the Employee’s job responsibilities, or adversely affect other employees’ job responsibilities or ability to do their jobs.”

If an employee handbook fails to include such a provision, it does not mean that the employer is unable to discipline or discharge an employee for off-duty misconduct — employers are still able to fire employees for such misconduct. However, in the absence of a provision for off-duty misconduct, the risk of a discrimination or other claim rises.

When an individual employment contract limits termination to only those circumstances where there is “good cause,” and off-duty misconduct is not listed as good cause to terminate, such a termination might constitute a breach of contract by the employer.

Thus, every handbook and every employment contract should include a provision covering employee misconduct outside the workplace.

DEALING WITH REAL WORLD SITUATIONS

 Here are common situations I have seen play out over the years:

* On Monday morning the spouse of an employee calls into work and says “John has been arrested and is in jail; it’s all a big mistake.”

* Employer hears through the grapevine that employee has been arrested for DUI or in a Sheriff Joe or other sting operation.

* Employer is tipped off to employee’s offensive social media posts.

* Employer learns that supervisor (usually male) and subordinate (usually female) are in a relationship and are having problems.

As with just about any situation, the first step for the prudent employer is to gather facts — to investigate. Sadly, it turns out that most arrests are not “all a big mistake.” However, employers should investigate with an open mind — letting the facts, not conjecture, guide their decisions.

Of course, an employee’s background with his or her company may greatly influence an employer’s ultimate decision: a 20 year employee with a spotless record who provides a great benefit to a company is typically given much more leeway than someone who is new to the job or a marginal performer. This is normal and appropriate, subject to setting a precedent which the company may need to follow into the future (see below).

In some instances it may be impossible to determine exactly what has happened. This may lead to a very difficult decision. The key for employers, who are not held to a standard of perfection but rather one of good faith, will be to demonstrate that (1) a fair and thorough investigation was conducted and (2) the employer’s decision was made for a bona fide business reason and not for an improper (e.g. discriminatory or retaliatory) reason.

RED FLAGS: WHEN DISCIPLINE OR DISCHARGE IS RISKY OR DOWNRIGHT INADVISABLE 

There will be times when terminating an employee for off-duty misconduct will get a company sued. For example:

* Terminating an employee for posting “offensive” material on Facebook about working conditions may result in a Section 7 Complaint under the National Labor Relations Act (see previous edition of the HR Law Insider).

* Terminating a minority or older employee for off-duty misconduct, when in the past non-minority or younger employees have not been terminated for such misconduct.

*In Arizona, terminating an employee for smoking pot away from the workplace when the employee has a medical marijuana card and is not impaired at work.

When making any employment decisions, business owners should always ensure their decisions cannot be challenged as treating employees differently based on following: race, color, religion, genetic information, national origin, sex (including same sex), pregnancy, childbirth or related medical conditions, age, disability or handicap, citizenship status and service member status.

In addition, federal law prohibits making employment decisions based on whether an employee has taken time off under the Family Medical Leave Act, made a safety complaint to OSHA, questioned overtime practices, or filed a charge of discrimination or harassment. 

THE FLIP SIDE: EMPLOYER LIABILITY FOR FAILING TO TAKE ACTION WHEN LEARNING OF OFF-DUTY MISCONDUCT

Failing to discipline, discharge, or otherwise deal with an employee who has engaged in off-duty misconduct may lead to a claim for negligent hiring, supervision, or retention against the employer. For example:

* An employer who learns that its employee has a DUI risks liability when it allows the employee to continue to drive a company vehicle.

* An employer who learns that its employee has been arrested or convicted of a violent crime or sex crime exposes itself to significant liability when it allows the employee to continue to interact with members of the public on behalf of the company.

CONCLUSION 

Employers confronted with off-duty misconduct must carefully balance the risk of discharging the employee against the risk of not acting. The risk of associated with discharging an employee can be minimized, if not eliminated, by a methodical investigation and decision making process. If an employer decides to retain an employee who it knows has engaged in off-duty misconduct, it should do so consciously — knowing that it may have created a precedent going forward — and in a way that mitigates potential liability.

Off-duty misconduct situations can be among the most difficult for employers. As such, employers should consult legal counsel when the inevitable “it’s all a big mistake” call comes in on that random Monday morning.

SUPER BOWL SUNDAY SPECIAL EDITION: OMAHA, OMAHA! — CALLING AUDIBLES DURING WORKPLACE INVESTIGATIONS

Super Bowl Sunday: on a day when most Americans will be watching the game — or using the game as a good excuse to get their party on — some of us are reminded of the great economic engine that is the NFL. But how does it continue to increase in popularity and revenues? Should these not be declining given recent PR disasters and investigations into “deflate gate,” domestic abuse, discrimination, etc.?

Commissioner Rodger Goodell has been maligned by the media for “leading” a league that in many instances doesn’t seem to care. Team owners, however, have a different take. They see a man leading an unprecedented rise in league revenues — a leader that, after a series of mistakes, is becoming adept at calling audibles during workplace investigations.

This special Super Bowl edition of the HR Law Insider discusses calling audibles during the course of workplace investigations — when “going by the book” isn’t the best course of action to achieve the desired result.

DEFLATE GATE 

For the uninitiated — for those who have been living in a cave — “deflate gate” is the name given to the ongoing scandal involving the New England Patriots. The Patriots are accused of improperly deflating footballs prior to their recent game against the Colts. Patriots quarterback Tom Brady has said that he likes his balls less inflated. So, when 11 of 12 Patriots’ balls tested at halftime proved to be deflated and below the league approved minimum, the you know what hit the fan.

The NFL has obtained videotape of a Patriots’ ball boy entering a bathroom with the balls and emerging 90 seconds later.  Commentators have three theories as to what happened in the bathroom. Numbers one and two are too obvious to mention. The third, and prevailing, theory is that the ball boy deflated the balls during his bathroom sojourn. Yes, one can deflate 11 balls well within 90 seconds:

http://video.nydailynews.com/Done-in-40-Seconds-Newser-Deflates-12-Footballs-in-40-Seconds-28443950

There is indeed a distinct advantage to having deflated balls:

http://espn.go.com/video/clip?id=12206777

THE NFL’S INVESTIGATION: DELAY OF GAME 

One would THINK that it would take several days for the NFL to investigate and determine what happened to those 11 balls.  The investigation would include:

  • Reviewing security videotapes;
  • Interviewing Brady and the Patriots’ coaching staff (e.g. I would have Brady handle deflated balls and inflated balls and ask him various questions abut how they feel and what he likes to test his credibility);
  • Interviewing the ball boys;
  • Interviewing sideline and other personnel who handled the balls;
  • Constructing a timeline of the balls and changing inflation levels;
  • Consulting ball pressure experts; and
  • Reaching a conclusion

The NFL, however, is nowhere near reaching a decision. Among other things, the league has hired lawyers and says it needs to interview as many as 40 people!

Is the NFL stalling? I think so. Anything that will affect the NFL’s biggest prize — the Super Bowl — must be stopped or, as is the case here, delayed until after the Big Game.

The NFL has called an audible in an effort to run out the clock. And it is working. Many are already “tired” of hearing about a scandal where nothing has been proven. Brady and the Patriots are free to go forward — more galvanized than ever to prove the haters wrong — and play the game. If they win, and are later determined to have cheated, many will say that they beat the Seahawks “fair and square” and “who cares.”

The NFL is equally free to go forward with its crown jewel game. If it is later decided that the Patriots cheated, the league will “get tough” and penalize the Patriots with the loss of a draft pick or two and perhaps a fine. Painful? Yes. But relatively little compared to the decision occurring BEFORE today’s game. Such a decision would have placed the league and Patriots in an awful and awkward position.

HR LESSONS TO BE LEARNED 

No two workplace investigations are the same. Investigations are not one dimensional: WHEN to take action is sometimes as important as WHAT is decided. Timing, while not everything, is oftentimes critical in how a company’s decision is evaluated by the public, by regulatory agencies (e.g. EEOC; Department of Labor; OSHA, etc.), and by judges and juries.

So, when the next scandal hits the NFL, or when your business faces its own workplace challenge, carefully consider: how and when to take action. Usually the answer is: “methodically and right away.” But sometimes your company may need to call an audible at the proverbial line of scrimmage — deviating from the so-called book because the book was written for most, but not all, situations.

Have a great Super Bowl Sunday.  I know I will be glued to the tube being the football geek that I am.

For those not averse to some strong language, watch Burt Reynolds himself resolve a workplace dispute on the gridiron — in my favorite football movie ever:

 

 

 

 

 

SEVEN STEPS TO EFFECTIVELY ADMINISTERING DISCIPLINE

 

Each situation requiring employee discipline is unique. However, the following guidelines will help employers ensure that discipline is meted out fairly and properly:

1.    Act timely

  • When information comes to your attention indicating that misconduct may have occurred, you should act promptly. You should begin to investigate the situation, and possibly even suspend the employee involved pending the investigation, immediately.
  • If management delays in taking action, it may be found to have condoned or tolerated the misconduct, and may thereby lose its ability to administer effective, and necessary, discipline. If there is delay, a potential plaintiff may also contend that the misconduct was not sufficiently serious to warrant discipline, because if it was so serious management would not have waited so long to take action.

2.    Know the Company’s Rules of Conduct, Policies, and Practices

  • Obviously, in order to determine whether misconduct has occurred and to determine whether discipline is warranted, you need to know the applicable policies and rules.

3.   Investigate, Investigate, Investigate

  • It is critical that all of the relevant facts be obtained before making a decision as to what discipline, if any, should be meted out. Making such decisions based upon incomplete facts is not fair to the employee involved, co-workers, or the Company.
  • Good, thorough investigations are also an important element in prevailing in lawsuits concerning discipline.

4.   Give the Accused Employee a Chance to Tell His/Her Story

  • Before deciding what discipline, if any, to impose, give the employee under investigation a chance to give his/her version of the events.
  • This should be done even when you believe there is nothing the employee can tell you that would affect the outcome. Talking to the employee insures that a fair investigation has been conducted and that all facts and viewpoints have been obtained.

5.   Be Consistent in Determining the Appropriate Discipline to be Imposed

  • You should be consistent in the discipline that is used. This means that similar situations should result in similar discipline. However, situations which on the surface appear to be similar often turn out not to be when all the details are known. Again, this is why a careful, thorough investigation is so important.

6.    Inform Employee of What Will Happen if Further Misconduct Occurs

  • With respect to discipline for future misconduct, generally it is appropriate to say something like the following: “Any future misconduct on your part will result in further discipline, including possibly discharge.”

7.   Document Warning and Disciplinary Discussions

  • You should note who was present during the discussion, when it occurred, and summarize what was said. This written record of the discussion should be made on the same day it occurs.
  • Such documentation will, if necessary, enable the Company to show that the employee was specifically informed as to what was expected of him/her and what the consequences would be if the employee failed to meet the Company’s expectations.

 

 

THE DARK SIDE OF EMPLOYEE DISCIPLINE

Pretext

ˈprēˌtekst/

noun

A purpose or motive alleged or an appearance assumed in order to cloak the real intention or state of affairs.

HR Law Insider’s most recent article discussed the benefits of employee discipline. Implicit in the discussion is that discipline must be legitimate and proportionate. This article discusses when discipline is pretext: a bogus reason to get rid of a good employee.

Earlier this year a Staples employee was awarded 26 million dollars by a jury after it concluded that Staples’ reason for firing him was pretext. It was the largest award of its kind in Los Angeles legal history. The jury appears to have been incensed by an employer that was looking for a reason to fire an employee with a perfect track record. Staples purportedly fired the employee for “theft.” The jury concluded that this was not the real reason the employee was fired.

PRE-TERMINATION QUESTIONS EVERY EMPLOYER SHOULD ASK

A business can always find a purported “reason” to fire an employee. Before that decision is made, however, the business should consider:

  • What is the employee’s past work record? If it is good, then the termination may be deemed pretext.
  • Is there any record of the employee complaining or uncovering improper conduct by the company? If so, the risk of a pretext finding rises dramatically.
  • What are the chances the now ex-employee will bring a lawsuit against the company? What sort of claims can be brought and what is the company’s potential exposure?
  • How will the ex-employee appear before a jury? Does he or she have an exemplary past?
  • How will your own employees and ex-employees appear? Do they uniformly support your position or will some provide evidence against you?
  • What will it cost in dollars, time, and bad publicity to defend a lawsuit?
  • Can there be collateral damage (lost contracts/clients, penalties, etc.)?

Failing to identify and correctly answer these questions can result in massive pain.

SUNK COST FALLACY: DO NOT COMPOUND A BAD DECISION WITH ANOTHER BAD DECISION

Staples compounded a bad decision – the discharge of the employee with the good work record – with a worse decision: defending the bad decision. Defending the bad decision cost Staples not only hundreds of thousands of dollars in its own attorneys’ fees, but a gigantic jury verdict and horrible publicity.

Staples was guilty of “sunk cost fallacy” thinking. This occurs when one (a) reasons that a further expenditure of time or money is warranted based on past expenditures or to defend past positions but (b) fails to take into account potential losses involved in the further investment.

Toughness is a virtue. There is, however, a fine line between bravery and stupidity. “Digging in” often deepens the hole of a bad decision or poor investment.  Once a business has made a decision or investment it cannot take back, it should determine the best way forward. Sunk cost fallacy thinking can be very expensive.

I WON’T BACK DOWN

This edition’s video was recorded 10 days after September 11, 2001. As sadness, anger, pride, and revenge occupied many of our of hearts and minds, Tom Petty and the Heartbreakers performed a song that fit the day: “I Won’t Back Down.” 13 years later we continue to grapple with the events of 9/11, the wars that ensued, and whether our politicians have engaged in sunk cost fallacy thinking.

 

HISTORICAL POSTSCRIPT:  REMEMBER THE CONCORDE JET?

The sunk cost fallacy is sometimes known as the “Concorde Fallacy.” It refers to the British and French governments’ continued funding of the Concorde jet even after it became apparent that there was no longer an economic case for the aircraft. The project was regarded privately by the British government as a “commercial disaster” which should never have been started, and was almost cancelled, but political and legal issues made it impossible for either government to pull out.

 

 

 

THE FORMULA FOR MAKING GOOD HR DECISIONS

Employment lawyers routinely field calls from business clients asking for help assessing whether they are “safe” terminating particular employees. No two fact scenarios are identical. Thus, there is no precise methodology to guide such decisions.

There is, however, a solid and time tested general formula I have developed for helping businesses make good workplace decisions. It derives from a 1944 case that is required reading for all first year law students. In Carroll Towing, a flour filled barge in New York Harbor broke loose and crashed into a number of other ships, causing lots of mayhem – and damages.

What does a 1944 runaway barge case have to do making workplace decisions in 2014? Plenty. The judge’s reasoning in Carrol Towing applies to workplace decisions as well:

Since there are occasions when every vessel will break from her moorings, and since, if she does, she becomes, a menace to those about her; the owner’s duty, as in other similar situations, to provide against resulting injuries is a function of three variables: (1) The probability that she will break away; (2) the gravity of the resulting injury, if she does; (3) the burden of adequate precautions. Possibly it serves to bring this notion into relief to state it in algebraic terms: if the probability be called P; the injury, L; and the burden, B; liability depends upon whether B is less than L multiplied by P: i.e., whether B < PL.

Substitute “employee” for “vessel” and let’s walk through dealing with a problem employee. In deciding whether to discipline the employee you should consider (1) the possibility of further infractions, (2) the gravity of harm if the employee continues to misbehave, and (3) the burden of disciplining the employee or of other preventive action.

Prudent employers recognize that in most cases the “burden” of disciplining employees is slight when compared to downside of doing nothing. Two separate risks arise when employers do nothing in the face of workplace infractions or nonperformance. First, the risk of further infractions and ongoing nonperformance rises. These problems in turn hurt the company’s productivity and can cause safety and  morale problems, among others.

Second — and arguably far worse — failing to timely discipline an employee causes increases the risk of a successful wrongful discharge lawsuit. This occurs because the employer has either (a) allowed a misbehaving employee to continue unabated or (b) terminated an employee with a seemingly clean work record.

Let’s apply Carroll Towing to two hypothetical situations and watch it work against imprudent employers:

Hypothetical I: Company A has a high revenue producing male employee who enjoys harassing female employees. This creates a high probability that there will be a claim of sexual harrassment.   It is also likely that the company will be in a lawsuit and exposed to damages and bad publicity. The gravity of the resulting injury is high – like that of a runaway barge.

Company A, however, does nothing because it (1) is willfully ignorant of the probability and gravity of a discrimination lawsuit and (2) perceives the burden of disciplining the large revenue producer to be too great. Company A may likely get what it deserves: protracted legal proceedings, lots of wasted time, and multiple checks written to attorneys and plaintiffs.

Hypothetical II: Company B has a poorly performing employee that is over 40, in a minority group, and has a physical disability. The employee is not performing well and is frequently late to work (unrelated to the disability). The employer fails to understand the risk and gravity of ongoing nonperformance and fails to take the simple act of disciplining the employee.

Company B “wakes up” at some point and realizes it must terminate the nonperforming employee, who is crushing morale and productivity and can be replaced by a newfound superstar candidate. But it is too late.  The company should long ago have realized the possibility and the gravity of a Title VII charge of discrimination if it terminated the employee before there was any written record of the employee doing anything wrong.

By failing to take the simple step of disciplining the employee, Company B is now stuck on the horns of a dilemma: either fire the employee and risk a discrimination lawsuit because there is no record of nonperformance, or retain a lousy employee.

Understanding the probability and gravity of workplace problems allows businesses to take reasonable precautions to avoid them. It’s a simple formula to understand and apply.  The next time your business confronts a problem employee, evaluate:  what can the company do to reduce or eliminate the potential and magnitude of future problems.

SIDE STORY:  Back in the day — the Big 80s — I was an ocean lifeguard on Hollywood Beach, Florida.  The potential for drownings was high when weighed against the precaution of carefully watching my section of the beach/surf.

Ironically, the best lifeguards on our beach had the fewest saves.  Why?  Because a good guard quickly sees and understands a problem swimmer or bad surf or wind conditions.  This enables the guard to takes measures — moving a swimmer away from a rip current — before a rescue becomes necessary.  When company managers have the training and smarts to identify “rip currents” among employees, they too will prevent crises before they occur.

Carroll Towing applies to any number of situations in life. This week’s video pays tribute to the 29 men who died on November 10, 1975, aboard the Edmund Fitzgerald in Lake Superior. You’ve likely heard the great ballad by Gordon Lightfoot which chronicles the disaster. If you like the song, you will love this touching video (turn up the volume):