Discipline

What type of discipline is most advisable?

Consider using a system of “progressive discipline.”  While some conduct (such as theft) may call for immediate termination, agencies, juries, courts, and other adjudicators are sympathetic to employees who are discharged without warning.  Such practices may also lead to unrest and unionization.  When employees have been given a succession of oral and written warnings, and perhaps a disciplinary suspension or decision-making leave prior to discharge, discharge may be unnecessary or easier to defend.  Progressive discipline begins with verbal counseling.  All counseling, however, whether verbal or written, should be witnessed and subsequently documented.

How should discipline be documented?

Documentation should be consistent.  An employee should not be written up for a minor violation if other employees are not written up for the same type of violation.  Otherwise, the employer may appear to be building a case against a particular employee.

What the most common discipline/discharge pitfalls?

• Constructive discharge (forcing an employee to quit by making conditions intolerable).
• Reduction in hours.
• Transfer to another supervisor.
• Avoiding criticism or poor evaluations.
• Insistence that the employee “voluntarily quit.”
• Acting out anger or frustration.
• Coming up with false rationales and explanations to soften the blow (such as “someone else wants me to do it”).
• Expressing dissatisfaction to others.
• Mislabeling employees based on early performance, which could cause employees to live down to expectations.
• Failure to establish an internal system to ensure consistency of actions between supervisors of various departments and among employees supervised by the same supervisor.  Consistency in management and discipline decreases the likelihood of a disparate treatment claim, helps avoid retaliation charges, and supports an employer’s defense against future charges.

A common real life example of these pitfalls is as follows:

A senior employee, who is a mediocre performer, has received inflated written performance reviews of average and above average.  Among all of these ratings there may be one negative and it has been commented on annually.  On a day-to-day basis the manager has frequently expressed his dissatisfaction with the performance to the employee and to others.  One day the manager has “had enough” and terminates the employee “on the spot.”

The reality is that based on all the documentation the employee has been an average performer for a long period of time.  The one area of failure has been tolerated for years.  Why is she being terminated now after all these years?  A good answer to this question will be difficult to find.  In addition, because the termination was on the spot no one could examine the documentation; no evaluation could be made to ensure consistency with other terminations; the employee had no chance to appeal the decision.  All in all a very bad, all too common scenario.

Practical tips for reducing the risk of an employee lawsuit 

Avoiding litigation may not be easy to do since lawsuits are easy to bring. However, companies can prepare for litigation by following careful steps in dealing with employees.  A successful defense begins with good company policies that are consistently followed and applied. 

Helpful steps include:

• be considerate of all employees – treat employees fairly and with respect
• educate supervisors about protected categories of employees
• establish guidelines for dealing with employees:
  • criteria for excessive absenteeism
  • how to deal with work performance problems
  • what actions justify immediate discharge
• follow established guidelines – do not vary actions based on the identity of the employee
• set up a review procedure for personnel decisions – a review of disciplinary or termination decisions may safeguard against a problem before it occurs
• confirm all necessary facts, date and documents to support decision – be sure no sensitive areas are raised (age, sex, etc.)
• be consistent
• give particular consideration to long term employees
• consider whether an affected employee has some type of protected status, (did he/she just have an on-the-job injury)
• be fair – all personnel actions should be reviewed for how a jury would feel about the action
• limit information about personnel actions to only those with a clear business need to know
• discuss disciplinary issues with employees in private (with a management witness if possible), do not berate employees in front of co-workers – an embarrassed, humiliated or angry employee is more likely to fight back, and that may include a lawsuit
• document disciplinary actions, even verbal reprimands
• investigate all sides to a story and, if multiple employees are involved, treat them equal opportunities to present their side of the case
• consider the possibility of severance pay in exchange for a release
• be considerate of the employee during the termination interview and in all circumstances surrounding the employee’s departure
• limit reference information to neutral reference only (dates of employment and position held) unless a signed release is obtained
• include “at-will” disclaimers everywhere: in handbooks, on acknowledgment pages signed by employee, on employment applications and anywhere else feasible.

Is polygraph testing appropriate?

Probably not.  The Employee Polygraph Protection Act of 1988 (EPPA) bars most private employers from using polygraph tests for pre-employment screening and places substantial restrictions on the use of polygraphs for current employees.  Most private sector employers do not find it realistic to use polygraph tests because of these restrictions.  For example, the person to be tested must be given prior notice of numerous specifics regarding the nature of the test, must sign a written statement informing him or her of numerous rights and remedies under the law, must be provided an opportunity to review the specific questions to be asked, and must be allowed to terminate the test at any time.  The Department of Labor (DOL) may impose penalties for the failure to follow these restrictions.  Questions on religious, political, racial and sexual matters, and union beliefs are prohibited.  Polygraphs generally should not be administered even if an employee volunteers to take the examination to exonerate himself, since the law not only prohibits employers from indirectly suggesting a polygraph, but also makes it unlawful for any employer “to use, accept, refer to, or inquire concerning the results of” any lie detector test not administered according to an exception and in conformance with all the procedural specifications.

“Ongoing investigation” exemption

The EPPA prohibits employers from discharging, disciplining, discriminating against, or denying employment or promotion to an employee solely on the basis of the results of the test or for refusing to take the test, except pursuant to the ongoing investigations exemption, and then only when there is other supporting evidence.  Ongoing investigation means that the investigation is of a current, specific, and identifiable incident in which company money or property is missing and in which there are identifiable suspects. Employers may test employees whom they reasonably suspect of workplace theft if these employees had access to the property involved.  Before the test can be administered, the worker must be given a signed, written statement that specifically describes the incident under investigation, the basis for testing particular employees, and the basis of the employer’s reasonable suspicion, in addition to other requirements. 

While the EPPA does not prohibit medical tests to determine the presence of controlled substances in the body, the regulations state that the “ongoing investigation” exemption does not allow an employer to give an employee a polygraph test to learn whether she or he has used drugs or alcohol.  This is true even when possible substance abuse leads to economic loss such as an accident caused by a drunk employee driving a company vehicle.

Exemption for manufacturers and distributors

The Act permits limited use of polygraphs by employers authorized to manufacture, distribute, or dispense certain controlled substances. Regulations provide that this exemption does not apply to common or contract carriers and warehouses, whose possession of the controlled substance is in the usual course of their business and who are not required to register with the Drug Enforcement Agency.

Exemption for employers providing security services

Section 7(e) of the Act permits testing of prospective employees of companies whose primary business purpose consists of providing armored car, security alarm, and security guard services for the protection of “facilities, materials, or operations having a significant impact on” the health or safety of a state, a political subdivision, or the national security of the United States, or “currency, negotiable securities, precious commodities, or instruments or proprietary information.”  This exemption only permits testing of prospective employees employed to protect facilities, materials, operations, or assets as described in the regulations.  Some types of employees, such as custodial and maintenance employees, would not be covered by the exemption.

Exemption for public employers

The Act exempts federal, state, and local governments and does not apply to certain testing administered by government agencies for national defense or security reasons.  The Eleventh Circuit has held that the national defense exemption does not apply to private contractors. 

Polygraph Act penalties 

Federal courts have the power to award legal and equitable relief for violations of the Act, including reinstatement, promotion, lost wages and benefits, and attorney fees.  Additionally, the Department of Labor may seek civil fines of up to $10,000 against employers who violate the Act.

Posting requirements 

The law requires all employers engaged in (or affecting) commerce post and maintain a notice where notices to employees and applicants are customarily posted that sets forth the pertinent provisions of the Act.  Copies of the notices are available at local offices of the Department of Labor, Wage and Hour Division.

State laws 

Some states also have their own laws regulating the use of polygraph tests in employment.  See the chart of States that limit pre-employment inquiries.

Can employers monitor employees suspected of wrongdoing?

In certain situations, an employer may desire to place an employee who is suspected of criminal activity against the employer under surveillance.  Although it is generally appropriate to place employees suspected of wrongdoing under video surveillanceor to hire a “spotter” to masquerade as an employee and observe employees, employers must be very careful before they attempt to conduct audio surveillance upon employees either through the use of wiretaps or other recordings devices. Audio surveillance is generally prohibited by both federal and state law.

Federal Wiretap Law

The Federal Wiretap Law, adopted as part of the Omnibus Crime Control and Safe Streets Act of 1968, imposes criminal liability on the illegal use of technology to intercept and record telephone calls and other communications.  The Act has also been the basis for civil claims by employees who discovered their telephone conversations or other communications were recorded, monitored, or both, by employers.  In 1986, Congress amended the statute to extend the prohibition to the interception of electronic communications.  The Electronic Communications Privacy Act provides for a private cause of action permitting the recovery of actual damages or statutory damages at $100 per day or $10,000, whichever is greater.  Aggrieved individuals may also recover punitive damages, attorney fees, and court costs.  As applied to employers, the statute prohibits:

• intentionally intercepting, trying to intercept, or procuring another person to intercept employees’ wire, oral, or electronic communications

      or

• intentionally using, trying to use, or procuring another to use an electronic, mechanical, or other device to intercept an employee’s oral communications

      or

• intentionally disclosing or trying to disclose to another person the contents of a wire, oral, or electronic communication, knowing, or having reason to know that the information was obtained in violation of the Act

or

• intentionally using or trying to use the contents of a wire, oral, or electronic communication, knowing or having reason to know that the information was obtained in violation of the Act. 

Although the interception and use of an employee’s conversation or other communications are generally prohibited, it is not a violation of the Act if:

• a party to the conversation is the one who intercepts the communication

      or

• one of the parties to the communication consents before interception occurs

or

• the circumstances do not justify an expectation of privacy and the employee does not exhibit such an expectation.

Consent may be implied from the circumstances, such as when the employee’s language and acts tend to show that the employee knows of or assents to encroachments on the routine expectation that conversations are private.  Nevertheless, because lack of consent may result in significant liability to the employer, if the employer desires to intercept the communications of its employees, the employer should explain to employees in advance why communications will be monitored and obtain express written consent to the interception from each employee.  Although this procedure will most likely do little to help uncover the source of employee theft, under such circumstances, the employer will avoid exposing itself to liability. 

An employer who would like to introduce wiretapping or other audio interception measures to keep a check on employee theft and other criminal activity may be better served by including a wiretapping policy in its employee handbook and requiring each employee to sign an authorization the time he or she is hired.  Although all employees will be properly put on notice of the potential for interception, this approach will most likely not arouse employees’ suspicions as much as if they policy was announced shortly after the theft was discovered.  

Although direct interception of an employee’s conversations is clearly prohibited by the Act (subject to the exceptions listed above), there has been some concern over whether messages stored on computers such as computer files or e-mail messages are similarly protected by the Act.

Many states also have laws regarding wiretapping as well as privacy.

How can performance appraisals assist employers?

Performance appraisals often figure prominently in litigation, so employers should conduct appraisals in a manner that reduces litigation.  If an employer decides to discharge an employee, performance appraisals should support the termination.  Supervisors must give honest performance appraisals that are recorded accurately and in a timely fashion. Providing the employee the opportunity to comment on a performance appraisal, in writing, may help avoid a later claim that the appraisal was unfair or inaccurate, or that the employee never received it.

Guarding against defamation and discrimination

Sensitive information, such as unflattering performance evaluations, should be kept secure and shared only with those who “need to know” the information because of their job duties.

The performance evaluation may become evidence to support a claim of discrimination under either a disparate impact or disparate treatment theory of discrimination.  To avoid disparate impact claims, employers must ensure that their performance appraisal system is administered even-handedly.  Employers should continually evaluate the process to ensure no protected groups are disadvantaged by its application.  To guard against disparate treatment claims, employers must give accurate appraisals, even if the truth hurts. An employer’s failure to criticize poor work by a member of a protected group can backfire.  For example, in a recent case, the employer did not criticize an African-American employee’s poor work for fear she would sue.  When the employee was discharged, she claimed she had not been given the same opportunity to improve as had white employees and successfully sued for discrimination.