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.
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.