Common Sense Road Map to Employee Discipline and Termination

Owners and managers frequently face the difficult process of terminating an employee for a reason other than lack of work. The reasons are many and varied, ranging from being placed in the “wrong seat on the bus” to poor cultural fit to “good cause” reasons, such as performance or behavior. Although employment at will is the rule of law, laws exist that undercut the employer’s absolute power to terminate for any reason whatsoever. Many of these laws are just plain common sense and can be compared to administering discipline with your own children.

Decisions made in haste or poorly executed have a very long damage tail including lawsuits, reduced morale, and loss of business momentum. By looking through the lens of both human nature and law, managers and owners can learn to make and execute decisions that are generally defensible both inside and outside the company culture. Knowing what could be coming and where it’s coming from will create a wiser decision process, a more legally defensible position, and buy-in from your watchful employees.

Practicing the following 10 rules will put you on a road map of common sense when dealing with issues related to employee discipline or termination:

1. Investigate. Investigating the facts protects the integrity of the process and lessens the ability of an employee to establish an unlawful motive. Poking in the weeds also provides feedback to you on what is working, what is not working, and what should be changed. Look for facts – not hearsay and speculation. Determining credibility is your job. Companies are human collaborative efforts containing many actors with varying motives and agendas that can be constructive, bad, opportunistic or even crooked. Consider plausibility, demeanor, motive to lie, corroboration, and past record when making judgment calls.
2. Interview witnesses and the employee in question. Ask the employee in question to explain what happened in front of two management witnesses. Write down exactly what the employee states and ask him/her to sign it.  Ask the employee for objective facts or witnesses to support his/her position. Your aim is to pin down the employee to “one recollection.” Interview complainants and witnesses by asking who, what, where, when and how questions. Let them know that you will try to keep the investigation as confidential as possible under the circumstances and in compliance with the law. This arduous process prevents tears at the fabric of your culture.
3. Use suspension/time out. No decision has to be made in one day. Give management time and space to make a calm and thorough investigation by suspending or sending the subject employee home with or without pay.
4. Be fair. Human nature and the law are interested in what you did in the past with similarly situated employees. We all have a fairness gene in us. If you lack past practice, have you checked your employment manual for support? Employment manuals with signed employee receipts carry a great deal of weight because they provide proof that the employee was aware of the rule at issue. Past warnings and the employee’s personnel file are also instructive.
5. Determine the unique circumstances, if any, that are present. Look at any variable that may make this situation unique. Has the employee complained of harassment or retaliation? Filed a worker’s compensation claim? Just returned from an authorized leave? Has the employee just started a new medicine? Performed a heroic deed? How do you articulate what the “straw” is that is breaking the proverbial employment back? Are there factors involved that require extra proof, such as age, sex, disability, religion, national origin, etc.? What is the tenure of the individual? Does the employee have a reasonable excuse? Has management acquiesced to the behavior before? Is this a setup in some way by an opportunistic co-worker?
6. If necessary, determine cause. Of course, cause is not necessary, except in the myriad of unique circumstances mentioned in Rules 4 and 5. Do you have direct, objective evidence? Or is it mere circumstantial evidence or even conjecture? Taxing yourself to investigate further now will save you a great deal of time, energy, and resources later if a claim is filed.
7. Gather all of the facts before making the decision to discipline or terminate. Like you and your children, juries hate bullies and look at the totality of the circumstances. See Rule 4. If you feel uncomfortable with any rule, consult your employment attorney.
8. Establish a company policy for method of delivery. The decision should be a kept at a “need-to-know” basis. The manager and a witness should have no more than a seven minute meeting with the employee. Meet on Tuesday afternoon when everyone has left for the day. Remember, your method of delivery could be your downfall if you are sued by an ex-employee. The manager should advise the employee that a final decision has been made that the employee is not working out. The manager then should provide all of the final details regarding employment with the company. The discussion should include the severance package (if any), vacation days left to be paid out, and COBRA information.  The manager should provide the employee with a copy of any agreements the employee signed with the company. Beware that releases require written documents. If the employee is over 40, the release must comply with the Older Workers Benefit Protection Act. The manager should wait while the employee packs up his/her belongings and collect any company property in the employee’s possession, including laptop and smart phone. All server access for the employee should terminate immediately after the employee leaves the premises.
9. Maintain control over internal communication. The company should communicate to co-workers that the individual is no longer with the company and the company wishes the former employee well in his/her future endeavors. All information regarding the former employee should be kept confidential and on a need-to-know basis. There is no reason to broadcast it to employees. There are many laws that require confidentiality such as the Americans with Disability Act and the Family Medical and Leave Act. If applicable and relevant, this same very limited information could be communicated to customers.
10. Know the rights of terminated employees: service letter statues/personnel file review, etc. Each state is different in rights given to employees after termination. Some states force employers to issue service letters setting forth the true reason for discharge. Other states allow employees to review personnel files. Be aware of the location of the workplace and the applicable law.

This common sense approach to employee terminations should help you make the tough decisions. If you feel uncomfortable at any time while applying these rules, please check your “gut” with an employment attorney. Although employment law attempts to codify human nature, the law has many surprises, turns, and non-intuitive applications, and you don’t want to become entangled in one.

Posted by Attorney Ruth A. Binger. Binger serves both emerging and mature businesses concentrating in corporate law, intellectual property and technology law, digital media law, and labor and employment law. Her commitment to the success of small to medium-sized businesses, and her understanding of multi-faceted issues inherent in operations are what distinguish Binger’s practice.