‘Sanitized’ Performance Reviews Could Later Haunt Employers

By Diane Cadrain May 25, 2010
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Before being demoted in October 2009 and then discharged in March 2010, Pamela Fink had received only glowing performance evaluations at utility MXenergy, where she had worked since 2006. That’s what Fink, MX’s former public relations director, said when she sued the company for discrimination, charging that the motivation for her discharge was genetic testing that revealed a likelihood of expensive health problems.

In October 2009, Fink opted to have a preventive double mastectomy because she learned through genetic testing that she had the gene that predisposed her to breast cancer. While recovering from her first surgery, she said the company engaged a consultant to do her job.

She came back to work in November 2009, but by December she had lost her office, most of her job duties and the consultant had become her boss. Her job was eliminated in March 2010—the only job in her department to receive such treatment—approximately six week after returning from her second surgery.

But Fink’s performance evaluations did not substantiate her dismissal, she claimd. Until a “scathing” review in January 2010, she had enjoyed four years of positive reviews, including one in August 2009 in which her supervisor said that if all employees in the marketing department had to be laid off, Fink would be the only one to keep her job.

“I’d had great reviews, I had merit increases, I had bonuses. I really felt it was a place where I could be comfortable and confident and be honest [about my genetic test results] with them, and that was a mistake,” Fink told the Associated Press.

Now she’s the plaintiff in one of the first cases to be brought under the federal Genetic Information Nondiscrimination Act (GINA), which took effect in November 2009. Company spokesman Todd Miller told the Associated Press that MXenergy "emphatically and categorically" denied the allegations, but it has a policy not to discuss personnel matters and would not comment further.

Documentation Dearth

No employer wants to be in MX’s situation—allegedly caught without documentation to substantiate a discharge that otherwise could be viewed as discriminatory.

“Noncandid performance reviews occur fairly frequently,” said Ellen McLaughlin, a partner in the Chicago office of Seyfarth Shaw, which represents employers exclusively. “They make a case difficult to defend.”

“Sanitized” performance reviews that mask an employee's negative behavior can occur for a number of reasons.

“Some managers don’t want to deal with reviews,” said McLaughlin. “Either [they] are not trained and don’t understand the value of a performance review, or they find it difficult to be candid.”

“If you have a difficult employee, the natural inclination is to distance yourself, be reluctant to say anything negative because you don’t want them to be mad at you,” said Jaffe Dickerson, an attorney at the Los Angeles office of law firm Littler Mendelson.

‘Supervisors have to understand the value of a performance review; see it as a tool, not a chore.’

-- Chana Anderson, SPHR-CA CCP

Dickerson added that in other situations, employers give good performance evaluations in the hope that the employee will be grateful and live up to the praise. “But it never works,” he added. “After the fact, there’s no documentation of the bad behavior.”

“And in public employment,” Dickerson concluded,” it can be very difficult to discipline or fire employees—it takes a lot of paperwork. So [problem employees] are given glowing recommendations so they can go someplace else. We call it ‘the dance of the lemon.’ ”

“A sanitized review can be one that overlooks run-of-the-mill behavior,” said David Yamada, law professor at Suffolk University Law School in Boston. “Or it can be one that overlooks violent or aggressive behavior, and if the evaluation doesn’t document that, you open yourself to a lawsuit from customers or co-workers.”

Gary Namie, Ph.D., director of the Workplace Bullying Institute, says he has seen situations in which upper management overlooks “petty tyrants” among their managers.

“A manager can’t be a bully without an executive sponsor,” said Namie. “Usually the executive has given the bully a task, like cleaning up a unit, or it’s done without executive awareness through ingratiation—the bully positions him or herself as indispensable. Executives [also] might ignore bad behavior because they don’t know what to do, so they give it tacit approval.”

Whatever its cause, a “sanitized” performance review is one that fails to identify and document problems. And that failure can lead to liability for discrimination, negligent supervision or negligent retention.

Legal Obligation for Safety, Security

Cursory performance reviews raised a red flag for Chana Anderson, SPHR-CA CCP, when she held an HR position a few years ago for a health care organization with a workforce of about 500. When Anderson had been on the job for only six months, a woman came to HR to report an assault by one of the organization’s employees. The victim, a vendor who spent a considerable amount of time on the property, told HR that an employee had followed her into a locked room and assaulted her.

In the investigation, several co-workers pointed to a veteran of the company who had demonstrated a pattern of confrontational behavior and verbal abuse, especially toward women. The employees said they’d complained about him to the head of the facilities department, but not to HR. Anderson said that the company was fortunate in that it was neither sued nor fined over the incident.

“There had never been consistency in performance reviews in that department,” said Anderson. “There was no qualitative evaluation. The department did performance reviews but only checked the boxes—a quantitative approach—rather than adding comments where opportunities were available on the evaluation form. The only qualitative comments were an occasional word of praise for outstanding work.”

McLaughlin explains an employer’s legal duty in such a situation.

“The legal obligation would be to provide a safe workplace for employees and others with a business purpose to be there,” she stated. “If an employee attacked someone, the question would be whether it had been foreseeable. HR should be called in to investigate, put the attacker on suspension during the investigation, and go on from there. It should be treated like any other incident of workplace misconduct.”

In the wake of the experience, the organization developed new safety standards and new standards for performance evaluations, said Anderson, now director of HR at the Jewish Home of San Francisco.

Dickerson recalled another case involving employer failure to document known problems. A teacher had molested a student. After the incident, the teacher resigned from the school district with a positive evaluation. When the teacher went to work in another district and molested another student, the parents sued the first district for negligence. The California Supreme Court eventually ruled that an employer is not legally obligated to give evaluations but that if it does give them, it has a duty to tell the truth.

Although most of the time it’s clear what behavior should be or should have been documented, in some cases it’s hard to tell.

For example, “Intimidating behavior may or may not be due to a mental disorder, but it could be,” said McLaughlin. “What if an employee says, ‘If he doesn’t stop harassing me, he’ll be sorry’? You don’t want to unjustifiably label an employee as having a mental disorder, but you don’t want anyone to get hurt, either. In that case, you make the calculated risk that a claim under the Americans with Disabilities Act isn’t as bad as someone getting hurt and suing for negligence.

“To determine what to document, managers should go by company rules of conduct and record violations,” McLaughlin continued. “They should make sure the documentation is timely, specific, candid and detailed. A new manager should be able to come in tomorrow and see a clear roadmap of an employee’s workplace behavior.”

Poorly done performance reviews can lead to lawsuits for negligence, as in the California teacher case, but the far more common risk is closer to the situation alleged in Fink’s case.

“If an employer fires a person who is in a legally protected class and that employee sues for discrimination, the employer will have problems if it doesn’t have performance evaluations to substantiate the discharge,” said Yamada.

Performance Review Pointers

“Supervisors have to understand the value of a performance review; see it as a tool, not a chore,” said Anderson. Her former company set up a committee of stakeholders to create a new performance evaluation tool and trained staff to use it. The tool mandated two extra layers of review, requiring signoff by two levels above the supervisor prior to delivery and discussion with the employee.

“Organizations with efficient performance management systems will train managers about the steps of a good performance review,” said McLaughlin, who also recommended setting up a mechanism to review reviews.

For example, an extra layer of review from HR might identify problems otherwise not addressed. “If a manager has kept in touch with HR throughout the year about problems with a certain employee, and the review doesn’t document the situation, HR can remind the manager before discussion with the employee,” McLaughlin stated.

“Some managers’ bosses are very good about understanding their employees and being a visible department head,” she continued. “The more individuals in management who have opportunities to observe employee behavior, the better: A department head may see something a manager didn’t see.”

“If a manager continues to give satisfactory reviews of an employee known to be a problem, he should be held accountable,” she added.

“The onus is on the employer to be accurate and scrupulous in maintaining a fair evaluation system,” said Yamada. “If you promise written evaluations, you have to take the substance of them seriously, and if you don’t evaluate your employees at all, you may have problems.”

Diane Cadrain is a freelance writer based in West Hartford, Conn.

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