Employment related lawsuits continue to make up a significant percentage of the federal courts' civil docket. In fiscal year 2020, there were more than 67,448 charges of discrimination filed with the EEOC. While these numbers may seem staggering, the good news for employers is that there has been a steady decline of more than 16% over the last four years in the number of new federal lawsuits. Of course, this does not include the large number of employment lawsuits brought in state courts, some of which (like California or New Jersey) do not require any exhaustion of administrative remedies and permit uncapped awards of compensatory and punitive damages. It also does not include the growing number of employment discrimination claims that are now being handled through private arbitration.
The fiscal year 2020 statistics continue with significant reduction from the pattern over the prior decade. Of the charges filed with the EEOC, retaliation, race, gender, disability, and age discrimination were the most prevalent. Against these statistics, and with the passage of new employment related statutes almost every year, there is no question that employers face an increased risk that they will be sued when they discipline or discharge employees. Disciplinary actions that are viewed as unfair by fellow employees can become the rallying point for union organizing efforts. Therefore, it is important for employers to have in place appropriate disciplinary procedures to reduce their exposure to lawsuits and to address employee morale issues. Such procedures, if applied consistently and fairly, are an important part of enforcing company rules and policies, encouraging a more efficient working environment, and placing employers in a good position to defend against claims from employees.
Although discipline policies vary with regard to the specifics of prohibited conduct and the amount of discretion given to supervisors (in terms of deciding how to discipline an employee), it is important that all discipline policies be administered fairly, objectively, and consistently, and that they be communicated effectively to employees. Establishing the employer’s discipline policy is the key first step.
Some employers may desire a more fixed discipline policy. Employers that do not want open-ended discipline policies may implement a progressive discipline policy that sets forth various potential types of employee misconduct and the penalty for each type. A progressive discipline policy assigns specific penalties for employee misbehavior, and the penalties increase in severity with each subsequent offense or for more serious offenses. For example, the first violation may result in counseling or a verbal warning, the second in a more severe penalty such as probation or a written warning, and the third in suspension or termination. A progressive discipline policy makes employees responsible for individual violations but also seeks to identify and correct patterns of misbehavior. Its purpose tends to be rehabilitative rather than punitive.
The lack of discretionary decision-making power placed in the hands of supervisors under a progressive discipline policy can be beneficial to both employers and employees. From an employer’s perspective, it is less likely that supervisors will unevenly discipline employees because the supervisors do not personally determine the penalty for every offense. Meanwhile, employees are more likely to respond quickly to warnings of infractions if the violation is immediately brought to their attention, because the penalties for future violations are predetermined and known.
The inflexibility of a structured, progressive discipline policy, however, is its biggest potential disadvantage. A progressive discipline policy does not normally take into account many outside factors that may surround a violation. For instance, an employer may not wish to punish an employee who misses work due to a non-protected family emergency in the same manner as an employee who misses work for less legitimate reasons (such as being hung over). It is important that supervisors maintain some level of discretion in order to ensure that the disciplinary action is appropriate to all of the circumstances. Also, as with any disciplinary policy, a progressive disciplinary policy must be enforced consistently to be effective.
An employer’s written discipline policy may create an implied contract by which an employee can only be fired for good cause or for offenses listed in a handbook. Care must then be taken in drafting the policy so that the presumption of at-will employment is not overcome. It may still be possible for an employer to impose progressive discipline if its policy is phrased as a guideline that the employer is not required to follow and that any progressive disciplinary system is not intended to either change the employee’s at-will employment or prevent the employee from being terminated.
Alternatively, an employer may wish to afford greater discretion to its supervisors and adopt a flexible discipline policy. A supervisor is often in the best position to determine the gravity of the offense and the appropriate disciplinary measure to impose.
The difficulty with leaving discretion in the hands of the supervisors is the possibility that discipline will be unevenly applied. Therefore, supervisors must be trained to be consistent and fair when disciplining employees and some effective appeal procedure is a practical necessity. Further, it is a best practice to have any proposed disciplinary action reviewed by a neutral third party such as human resources to avoid inconsistent application of discipline.
Employers must make sure to keep organized, written records of all disciplinary actions taken against their employees. Every act of discipline taken against an employee needs to be documented and placed in the employee’s disciplinary file. Even verbal counseling sessions should be documented. Disciplinary records must be accurate, detailed, and objective. If the employer ever needs to defend itself against a claim of discrimination or retaliation, the employee’s personnel file is often an effective means of convincing a judge or jury that the employer’s decision to discipline was based on legitimate, non-discriminatory, non-retaliatory reasons. Many jurors have the attitude that if it is not in the file, it never happened. Therefore, the failure to document discipline may make supervisors look less credible in any resulting lawsuit.
As soon as problems develop, a supervisor should discuss the issues specifically with the employee and suggest ways of correcting the situation. Any of these discussions should also be documented and kept in the employee’s file. Copies of oral and written warnings should be placed in the personnel file, and the supervisor should notify the employee of the employer’s expectations in order to avoid further discipline or discharge, including a time frame for correction, if applicable. Disciplinary action should be taken as quickly as possible following misconduct in order to avoid suspicion of an improper motive for disciplinary action, and the discipline taken should be documented accordingly. However, disciplinary action must be taken only after a reasonable investigation has been conducted and a determination made that the misconduct occurred. (See Chapter 22: Workplace investigations.)
An employer must be careful in its choice of language to describe an employee’s misconduct and cause for discipline. A supervisor should not use terms that could be viewed as a reference to an employee’s psychological or medical condition, as such comments could implicate the Americans with Disabilities Act (ADA) or the Minnesota Human Rights Act (MHRA). For example, saying the employee is “acting paranoid” may be evidence that the employer regards the employee as having a mental disability. It is much better to stick to the facts and save the editorial comments. The supervisor also should list specific factual examples of misconduct rather than using a blanket criticism of an employee’s personality traits or character. Criticism of an employee’s character could result in a lawsuit for defamation.
Verbal warnings should be given for relatively minor violations of the employer’s rules. A supervisor should speak to the employee in private. Except perhaps for counseling or the most minor violations, another supervisor or human resources representative should be present (who can later verify what transpired). The employee should also be informed that further discipline will result from future infractions. Documentation that the verbal warning was given should be kept in the employee’s file. Many companies also follow a recommended practice of providing a copy to the employee.
If the purpose of the meeting is solely to deliver the disciplinary warning, the employee may not have a right to have a union representative, depending on the language in the collective bargaining agreement, or co-worker present. That said, some non-union employers extend this right because it lends an aura of fairness to the process.
If the employee disregards a verbal warning, or if the violation is more severe than those warranting a verbal warning, a written warning may be warranted. A supervisor should discuss the warning with the employee to ensure that the employee understands the reasons for the disciplinary action. A copy of the warning should be given to the employee at the time of the discussion, and the employee should be asked to sign and date the warning. The purpose of this is to have the employee acknowledge receipt and does not require the employee necessarily to agree with the warning. The original warning should be placed in the employee’s file. If the employee refuses to sign, this fact should be confirmed by two supervisors and initialed by them on the warning notice.
Suspension is a form of discipline usually administered only for severe infractions of an employer’s rules or for excessive violations after at least one written warning. Some employers may not wish to use suspensions since they can be humiliating to the employee. As a result, some employers prefer to use probation instead of suspension. Regardless of whether an employer prefers to use probation or suspension, there are several basic steps that an employer should make before severe disciplinary action is taken. Those steps are described herein.
Once misconduct is suspected, the employee’s supervisor or another management official should immediately begin an investigation. If negative consequences result from the misbehavior, then action should be taken to correct them in order to minimize the impact of the misconduct. The initial investigation should yield enough information to conduct a more thorough investigation.
Except in rare cases, the employee suspected of misconduct should be interviewed as soon as possible after the misconduct. The interview should be conducted in private, away from other employees. If possible, the supervisor may wish to request another supervisor be present to later corroborate the investigator’s account of the conversation. In the case of an employee who is represented by a union, the employee has the right to request a union representative present at any interview that can lead to disciplinary action. The employee should be given an opportunity to explain what happened, including the chance to identify all witnesses that the employee believes would have information relevant to the investigation. At the close of the interview, the investigator should inform the employee that someone will be back in touch after the investigation is completed. If the suspected behavior is serious, the employer may wish to consider suspending the employee, with or without pay, before the initial interview can be arranged or while the investigation is ongoing. If the employee accused of misconduct engaged in conduct that might be covered by statutory prohibitions on retaliation, any suspension should be with pay to avoid the risk that the suspension itself may give rise to a retaliation complaint.
After interviewing the employee, the investigator should interview all other witnesses who may have knowledge of the facts. Usually, this will involve interviewing all witnesses, but, in some cases, interviews with a representative sample of witnesses may suffice, especially if the alternative would be a significant delay in the investigation. Again, these interviews should take place as soon as possible. The interviews should be conducted separately and in private. The investigator may wish to take signed statements from all witnesses. Again, the same right to union representation applies. For a further discussion of investigatory strategies and techniques, see Chapter 22: Workplace investigations.
At the close of the investigation, the information gathered should be reviewed by the human resources department or management staff. Prior to issuing discipline, a careful review of how the company addressed prior, similar incidents of misconduct by other employees should occur. To aid in this process, the company should institute a recordkeeping system that has a separate file for each company rule or policy and corresponding disciplinary action taken for any violation.
If disciplinary action is to be taken, the supervisor should place everything in writing to serve as a record. The record should describe the nature of the misconduct, including the date and time of the offense, a description of the events surrounding the incident, the company rules or policies violated by the employee, and the duration and nature of the discipline. All decisions regarding disciplinary action (with the possible limited exception of verbal warnings or counseling) should be approved by human resources and/or some other appropriate management official in order to ensure the adequacy of the investigation, fairness of the disciplinary action to be taken, and consistency with past practice.
Once a final decision is made, the employee should be informed of the employer’s conclusions regarding the incident, although the employer may wish to keep some aspects of its file confidential, especially if there are ongoing criminal proceedings or governmental investigations pending. It is prudent to keep witness statements confidential, especially if there is a risk of retaliation inside or outside the workplace.
The employee should understand the nature of the offense, the company rules that were violated, the nature of the disciplinary action, and what action the employer will take if there is another violation of company rules. The employee also should be presented with the disciplinary action record and asked to sign to acknowledge receipt. If the employee refuses to sign, this fact should be confirmed by two supervisors and initialed by them on the warning notice.
Some employers provide employees with a right to appeal any discipline decision more severe than a written warning. This appeal should be to a management official who had no involvement in the investigation or discipline process. If an employer chooses to allow appeals, the employee should be given a reasonable time in which to give written notice of appeal to the appointed management official and to identify any additional evidence or mitigating circumstances that should be taken into account. During the course of any appeal, it is the norm for the status quo to continue. Thus, if the employee has been suspended and returned to work, the employee normally continues to work while the appeal is heard. If the employee has been terminated, the employee normally remains out of work pending a decision on whether the employee should be reinstated.
The final decision to discharge any employee should not normally be made exclusively by the affected employee’s direct supervisor. Two levels of management should be involved and, if there are difficult or extenuating circumstances, an attorney should be consulted before a decision is made. Involving another level of management or a company attorney in the process provides a good check on whether the employer’s policies have been followed and whether the original supervisor acted out of a discriminatory motive or was retaliating against the employee for protected activity. See Chapter 24: Termination.
There are certain protected activities for which discipline should not be given. These include, but are not limited to, absences due to jury duty, leave for a workers' compensation injury, leave under the Family and Medical Leave Act (FMLA), or for military service such as reserve duty. Employees who make internal complaints or are cooperating in an investigation or claim under federal, state or local employment laws are also protected against retaliation.
Once an employee engages in any form of protected activity under these laws, the employer runs the risk that any subsequent discipline might be challenged as a form of retaliation. Normally retaliation claims are treated more seriously and result in higher jury awards against employers. It therefore becomes important for human resources personnel to ensure that any serious disciplinary action has been evaluated not only for inherent fairness but also to ensure that it is not the result of a desire to retaliate against an employee for protected acts.
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Appendix A: Recordkeeping requirements
Appendix B: Posting Requirements