Enlist HR early on if you have an under-performing employee.
If HR professionals had a nickel for every time they were blind-sided by a manager who wanted an employee fired, HR would be the best-compensated discipline in corporate America. Unfortunately managers often avoid HR at all costs and only come to visit the folks in “Personnel” when a crisis happens.
Welcome to the world of employee relations. As you can imagine, there’s a lot that goes into terminating employees for cause, and when your HR department is blind-sided by such “requests in a vacuum,” it can place HR at odds with line management. Ideally, HR should be in a situation to aid line managers when substandard job performers get in the way of maximizing a department’s productivity. But alas, that’s only management theory in most cases. More often than not, HR has to attempt to “build a paper case” to justify the termination during a crisis, and it’s usually an under-performing employee’s inflated performance reviews that preclude a termination for cause. Whose fault is that? You guessed it—the supervisor.
Why is it so hard to terminate? After all, employees can leave the company anytime they want. Why can’t companies leave employees the same way? Unfortunately, at-will employment isn’t all it’s cracked up to be. Line managers assume that if employees signed at-will employment agreements, then their employment really should be “at whim.” In reality, at-will employment is misunderstood, so let’s clarify what it means and what it doesn’t mean.
Employees often are asked to sign employment-at-will agreements in job applications, offer letters or employee handbooks or freestanding at-will agreements placed into their personnel files. Such agreements help defense lawyers win immediate dismissals (known as “summary judgments”) in court. That’s the sole purpose of an “at-will affirmative defense,” and if summary judgment isn’t won, then the employer must defend the case on its merits. If that happens, it means you will need to show, in most cases, that the ex-employee was accorded workplace due process in the form of progressive discipline. Most judges and arbitrators will reason that “if it isn’t written down, it never occurred.” As a result, companies need to provide progressive discipline in the form of written warnings or substandard performance reviews even when workers are employed at will.
The employment-at-will concept came about in the early 1930s. However, in 1980, a California court allowed exceptions to the employment-at-will doctrine. From that point on, employers no longer could be sure they would win a summary judgment via the employment-at-will affirmative defense. For example, if a plaintiff attorney representing your ex-worker could demonstrate that the motive for the termination was an exception to the employment-at-will working relationship, then the employment-at-will working relationship would be denied. Some exceptions to employment-at-will include:
- Unlawful discrimination (i.e., statutory considerations established under Title VII of the Civil Rights Act of 1964, including age, race, sex or sexual orientation discrimination as well as other applicable laws).
- Public policy exceptions (such as retaliation for having filed a workers’ compensation claim or for whistle-blowing).
- Implied contract exceptions (for failure to follow promises documented in your employee handbook or for implied promises made verbally during an interview that require just cause to terminate).
- Implied covenants of good faith and fair dealing (such as terminating long-term employees just before they’re due to receive some anticipated financial benefit).
Here’s the catch: Without a crystal ball, you can’t know now in 2002 what kind of spin a plaintiff attorney will place on a wrongful termination charge one year or 18 months down the road. So it’s not a matter of employment-at-will or progressive discipline. It’s both. This way, if you win the summary judgment based on the employment-at-will relationship, good for you. And if you lose the summary judgment and the case must be heard on its merits, you will be able to demonstrate cause and show in writing that you had no choice but to terminate the individual for inappropriate workplace conduct or substandard job performance. That should help you win your case or, at least, mitigate the damages.
Do probation periods provide you with a guarantee that terminated employees can’t come back and sue you for wrongful termination? That depends on your workers’ employment status. If they’re covered by a union’s collective bargaining agreement, then there’s a pretty good chance you can terminate in the probationary period (usually the first 60 to 90 days). Most union contracts allow management the right to terminate at whim during this period only. This is one of the few times where you and your company have a contractual right to terminate without cause.
On the other hand, if your employees are hired at-will, then no similar “contractual right” exists. In other words, you indeed have the right to terminate without cause or notice, but the ex-employee has the right to sue you. As a result, you might want to issue at least one written warning before terminating even probationary employees. That’s a conservative approach, however, and you should discuss this with counsel. After all, if you develop an active practice of always giving at least one written warning prior to termination, then you may limit your ability to terminate new hires on the spot.
Performance vs. Conduct
Remember that you have more discretion in aggressively responding to incidents of inappropriate workplace conduct than you do with substandard job performance (including attendance). Why? Because few courts or juries would expect you to endanger your workers or otherwise run your business into the ground by retaining an employee who may be dishonest, dangerous or who otherwise engaged in gross misconduct. Whereas courts expect employers to provide a full course of progressive discipline (including written and final written warnings) to substandard job performers, courts are much more lenient when it comes to inappropriate workplace conduct.
Even if you choose not to terminate for inappropriate workplace conduct on the first offense, you may issue a final written warning. In such cases, your write-up could state: “If you ever again engage in behavior that could be construed as hostile or intimidating or if you violate any other company standards of performance and conduct, then you will be immediately dismissed.”
Performance Review Bombshells
By far the biggest mistake line managers make is to inflate annual performance reviews. The path of least resistance is avoidance, and to minimize hard feelings in the office, many managers give “meets expectation” scores to under-achievers. That same documentation, however, will most likely preclude a termination for cause later down the road.
Why? As a supervisor, you will have created a written record for one or more years documenting that the employee’s performance was acceptable. With no other progressive disciplinary documentation on file to break the chain of positive performance reviews, you won’t be able to demonstrate cause should you be sued for wrongful termination. Take heed: If you expect to terminate someone in the upcoming year, only give a performance review with a final grade of “does not meet expectations.”
Sometimes supervisors give one employee in the group lower relative scores in individual performance categories than everyone else in the department. Still, if the overall score says “meets expectations” at the end of the review, then employees have no reason to believe that their employment is in serious jeopardy of being lost (or so argue their attorneys). It’s not how employees rank relative to their peers; it’s the final grade at the bottom of the review that counts.
HR Is Your Friend
When you suspect that substandard job performance or inappropriate workplace conduct may preclude a long-term employment relationship with a particular subordinate of yours, call in human resources as quickly as possible. Many HR departments have the resources and the time to help you construct an annual performance review or progressive disciplinary warning that documents substandard work. HR can help you document a performance improvement plan, the company’s expectations and “consequence” language that is clear and incontestable in its intent. In certain cases, HR also will be able to coach the employee or offer outside training services that help your company demonstrate its willingness to rehabilitate flagging performers.
You shouldn’t avoid HR like the plague, only to come in when a particular explosion forces a crisis situation, or view HR as a barrier that needs to be overcome. After all, HR is an extension of management, and part of its job is to shield your company from liability associated with the organization’s employees.
More importantly, you don’t want to be seen as a hotheaded manager acting outside the course and scope of your employment. That could result in your being named as an individual in a lawsuit. Worse, it could mean that the company withholds its legal support for you, and then you would end up footing the bill for your own defense attorney’s expenses and compensatory or punitive damages.
Folks, they don’t pay you enough to risk your home and savings. Put HR on your side as early as possible and allow human resources to protect you and your company. Making sure that your terminations are blessed before you fire anyone is smart, practical business. Besides, it’s time that HR stops collecting all those nickels and starts putting them back into your pocket.
Paul Falcone is director of employment and development at Paramount Pictures in Hollywood, Calif. He is the author of four books published by AMACOM, including The Hiring and Firing Question and Answer Book (2001), 101 Sample Write-Ups for Documenting Employee Performance Problems: A Guide to Progressive Discipline and Termination (1999) and 96 Great Interview Questions to Ask Before You Hire (1997). This article represents the views of the author solely as an individual and not in any other capacity.