Documentation: Key to
Employee Discipline

02/27/07

Could this happen to your company?

An applicant walks into your office and applies for a job. During the interview, he asks, "Under what circumstances could I be fired?" The supervisor says, "Don’t worry; we only terminate employees when there is a very good reason." The applicant takes the job, only to be fired a few months later after several instances of tardiness.

The employee sues for wrongful termination — and the suit has merit.

Believe it or not, this actually happened to one Ohio-based health care company. The employer terminated a chronically tardy employee, and then wound up as a defendant in a case it was hard-pressed to defend.

Why? Because the conversation between the supervisor and the applicant constituted a verbal contract, says Cleveland-based employment law attorney Maynard Buck III. Now, under contract, the individual was no longer an "at will employee." So the employer could no longer dismiss the employee at any time for any non-discriminatory reason.

Tip: All job applications should contain an "at will disclaimer," establishing that employment can be terminated at will by either party for any reason. Had the application contained that language in writing, it would probably have trumped any claim that the interview created a separate contract. G.Neil’s carefully designed job application forms contain this and other important language.

To further complicate matters, although the company had an employee handbook, it did not spell out company expectations with regard to tardiness. Nor did it spell out disciplinary procedures or due process. As a result, the company could not document compliance with any standard procedures, nor could it produce a written record of counseling or warnings. The company chose to settle the case. Cost: $35,000, plus legal fees and aggravation.

Put a system in place

It’s critical to have legally sound discipline and termination procedures in place, and to follow them. Ideally, your employee handbook should provide for a progressive disciplinary system. This gives your supervisors a number of disciplinary options depending on the severity of the problem. For example, they could range from verbal or written counseling to written warnings to suspensions to termination. This forces your company to clearly communicate expectations to the employee at each step of the disciplinary process up to and including termination. But just as important, it creates a yardstick of due process. If the employer can produce a clear employee discipline policy, and document that these procedures were followed, many successful wrongful termination claims may be avoided.

Unfortunately, too many employers fail to create the paper trail to support their employee discipline program. "The single biggest problem is lack of documentation," says Buck.

Where to learn more ...

Your supervisors need to know how to protect themselves, your company, and your good workers. That’s why we developed Fast Answers for People Managers™: Discipline & Termination. This thoroughly researched handbook is full of valuable procedures and tips designed to help you maximize the quality of your workforce, and protect you and your company from liability.


More on lawful termination procedures.

April, 2005