Risk Managers' Forum
Practical employee relations
Taking steps towards a litigation-free future
By Michael J. Mirarchi, JD
Under federal, state and local non-discrimination laws, well over 100 different factors listed are listed as a “protected status.” In compliance-based training programs, managers are told “discrimination is illegal—don’t do it.” Most managers would prefer to be taught “what to do” rather than “what not to do” when dealing with employee-related problems.
Non-discrimination laws provide a legal remedy when a manager bases a decision on an “irrelevant” factor that by statute is also an “unlawful” factor. No law authorizes legal challenges to decisions driven by the three universally recognized “relevant” factors, attendance, performance and conduct.
To avoid risk, make all your decisions only on the basis of attendance, performance and conduct. The advantages to you of doing that are clear: The list is short, easy to remember and places no meaningful restrictions on the operation or successful growth of your business. There would be no validity to any potential employment-related legal challenge brought against you. Everything you did as a manager would be considered legitimate and done in the best interest of your business.
You have the legal right to set your standards. To minimize potential legal challenges, provide your employees with notice of your expectations regarding attendance, performance and conduct before you start enforcing them. Once fair notice is given, you are entitled to insist that your standards be met by your employees.
Attendance: There is no universal standard that could be used to support a legal attack on the attendance requirements at your business. Legal challenges to discharges for poor attendance can be minimized by a process. First, decide what your attendance standards will be. Next, communicate these new standards and their effective date to your employees. Finally, enforce them consistently from that date forward.
This process avoids the risk of legal challenges including, “The attendance rules are discriminatory because other employees in the past did not get fired for what got me fired,” and, “They are applied differently based on who my manager likes.”
Performance: Effective performance management requires paying attention to two things: quality and quantity of work. Don’t label something as a “performance problem” unless you can show how it’s either a quality or quantity of work issue. If you cannot do this, then it’s not a performance problem; it’s a conduct problem. Making this determination is not an academic exercise. There are different sets of tools for addressing performance problems and conduct problems. When business owners and managers don’t recognize the difference in these problems, they often reach into the wrong tool box, with the result being a lawsuit.
On-the-spot performance counseling is vital: Employees cannot fix what they don’t know about. Alert an employee to poor performance immediately upon observing it and give him an opportunity to correct it. If you don’t tell an employee right away about a problem, when you eventually do mention it, you will lose that person’s trust. The employee will probably think, but not say, “Why didn’t you tell me about this four weeks ago? I’d have fixed it then.” From this point on, the employee believes that you are more interested in building a case to get rid of him, rather than working with him. If you end up discharging this employee, an attorney will tell him that your process was unfair.
When discussing a performance problem, try to keep the employee in a cooperative, non-defensive mode. State: “I’ve got a problem and I need your help. I’ve noticed a gap between your performance and what I expected, specifically __________. Tell me about it.” The answer will reveal whether the cause of the problem is due to a deficiency in knowledge or a deficiency in execution. If it’s due to a deficiency in knowledge, training may solve it. If it’s due to deficiency in execution, explore why and ask for a commitment to improvement.
Maintain records of all performance counseling. When an employee is terminated for poor performance without documentation of previous counseling, an attorney may tell a jury, “If they really cared about it, don’t you think they would have talked about it more than once a year?” A judge may tell a jury that they are entitled to disregard annual appraisals and find that the employee was actually performing satisfactorily. Without records of performance-related counseling conducted throughout the year, performance appraisals may be described in court as illegal “annual ambushes” rather than as legal “annual recaps.”
Conduct: To minimize legal challenges to discharges for misconduct, be certain that your corrective action records establish that your discharge decisions were fair. “Fair” means that you gave the employee notice that his conduct was unacceptable, gave him an opportunity to improve and he didn’t improve.
Corrective action tools include oral notifications, written notifications and either a suspension or final warning, but not termination of employment. Why not? The objective of corrective action is to change behavior through teaching. Termination is not a teaching tool. Termination is appropriate when an employee fails to respond to teaching, or when his misconduct is so serious that corrective action is not warranted. It is up to you to select corrective action that reflects the type, frequency, and severity of the misconduct.
When preparing corrective action documentation, use language that would leave your employee and anyone else convinced that you are fair. For example:
“A few weeks back, I told you to bring to my attention any client’s concerns about the insurance rate changes going into effect, so that I could arrange a coordinated response and quickly resolve their concerns before they went rate shopping among our competitors. Yesterday, we lost another client assigned to you. We might have been able to retain that client if we had responded in a coordinated fashion rather than your trying on your own to convince the client to stay with us. As I reminded you again this morning, as talented as you are in working independently, this is a matter that requires a team effort.
“This letter is meant to serve as a written reminder of what is expected from you from now on. I know that we share a strong interest in the success of this agency. I appreciate it that during today’s meeting you gave me your commitment to bring such client’s concerns to me immediately from now on.”
Discharge: If an employee does not respond adequately to your performance management and/or corrective action efforts, discharge with dignity. Tell the employee the true reasons for his discharge. Explain in full detail that the decision was based on attendance, performance and/or conduct. Avoid using a general phrase such as “not meeting our standards.” Vague explanations appear to be evasive and may anger an employee and increase the chances of litigation. Plaintiff attorneys tell employees that if you did not state a legal reason for the termination, you didn’t have one.
Note: The employee relations advice in this article was extracted from a comprehensive program titled “Fundamentals of Employee Relations—A Practical Guide to Litigation-Free Management” created by the author. For information on this program, visit www.resetclock.com.
Michael J. Mirarchi, JD, is an expert in employment-related lawsuit prevention, and provides training and consultation to help employers stay litigation-free. He has more than 25 years of experience in employment and labor law, as a corporate defense attorney and as a human resources vice president. He is also a faculty member for The National Alliance for Insurance Education & Research. For information on the Certified Risk Managers (CRM) program, go to www.TheNationalAlliance.com.