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Disciplining & Terminating Problem Employees: An Employer’s Guide
- As published in the July/August 2001 issue of California Builder Magazine
One of the most important duties performed by managers is the administration of the company’s performance standards and work rules and, when necessary, disciplining or terminating employees. However, if managers are not consistent in their disciplinary and termination practices, they leave the company open to lawsuits from disgruntled workers.
Nearly six out of ten California employers have reported being sued by former employees. Last year, the average jury verdict in employment cases was $870,390. The average jury verdict in wrongful termination cases was $366,237, and in sexual harassment claims, the average was $458,431. Indeed, the average awards in gender, race, disability, age, and pregnancy discrimination cases were all more than $1 million.
What About At-Will Employment?
Under California law, an employment agreement having no specified term may be terminated at the will of either party with or without notice or cause (Labor Code Section 2922). However, there are limits to this doctrine of at-will employment. An employer cannot terminate at-will if there was an implied or expressed contract with an employee not to terminate except for good or reasonable cause. Likewise, an employer cannot terminate an employee in violation of federal or state laws prohibiting discrimination based on race, color, national origin, gender, sexual orientation, age, disability or other protected characteristics. Finally, an employer cannot terminate an employee in violation of public policy, such as discharging an employee who has filed a workers’ compensation claim or an employee who is on a pregnancy disability leave of absence.
Steps in the Corrective Discipline Process
About 5% of employees cause 95% of workplace problems such as poor performance, increased absenteeism, rule infractions and misconduct. Most performance or behavioral problems can be corrected through counseling and employee discipline. Whenever a manager imposes discipline without first making expectations clear, there is a good chance an employee will attribute the manager’s actions to some improper or illegal motivation. Thus, it is important for a manager to follow these key steps when administering corrective discipline:
- Clearly communicate work rules and expected performance standards. Make sure the employee understands these work rules and job requirements, and be sure to review performance and give feedback to the employee on a regular basis.
- Act promptly on unacceptable behavior or poor performance, but avoid making a hasty decision.
- Be sure to investigate before taking any corrective action.
- Get all the facts and allow the employee an opportunity to explain his or her side of the story – avoid prejudging.
- Coach and counsel an employee to accept personal responsibility for his or her behavior. Your corrective action should require immediate and sustained improvement, and should indicate the consequences if the employee’s performance or conduct does not change.
- Implement discipline consistently.
- Document and maintain timely, accurate records in order to justify your action if your decision is ever questioned.
Termination Guidelines
When employees do not correct their performance or behavior within a reasonable time, then terminate those who need to be discharged. While most problems result in corrective discipline, some serious misconduct such as theft or insubordination may merit immediate termination.
When terminating an employee, employers should follow these guidelines:
- Is the reason for the termination clear?
- Are there sufficient facts and documentation to support the termination decision?
- Is the termination consistent with the way other similarly situated employees have been treated?
- Has the employee been given adequate notice of the work rules and the consequences of violating company policies?
- Has an adequate investigation been conducted?
- Has the employee been given a meaningful opportunity to explain, rebut statements, and influence the employer’s decision?
- Has the employer considered the employee’s prior work record?
- Does the decision to terminate the employee comply with company’s policies and practices on performance and corrective discipline?
- Is the company’s stated reason for the termination consistent with prior discussions and documentation of the problem; e.g., prior warnings and performance reviews?
- Did criticism of the employee’s conduct or performance start after the employee raised concerns about an alleged unlawful condition at work?
- Is the employee in a protected class or is involved in a protected activity?
- Has the employee been given an opportunity to appeal the termination decision to a higher management authority?
- Has the company completed the required termination paperwork; e.g., final paycheck in accordance with state law time requirements, change of status notice, COBRA notification, etc.
Since the company chooses the time and place to terminate an employee, no employer should ever be sued for wrongful termination. Applying the company’s performance standards and work rules consistently — and documenting those efforts — are crucial functions to disciplining and terminating employees fairly and legally.