THE BASICS OF EMPLOYEE DISCIPLINE AND TERMINATION

Published on: April 10, 2018

Employers are tasked daily with making decisions regarding employee discipline and/or termination. When faced with these decisions, employers should appreciate that their actions may ultimately be reviewed by third parties, including but not limited to arbitrators, judges and/or juries, all of whom will be left to decide whether the employee whom was disciplined and/or terminated was treated fairly. While there is no recognized cause of action in Massachusetts for “wrongful termination,” or “unjust dismissal,” claims for discrimination may still arise when an employee is able to demonstrate they have been treated unfairly or singled out for disparate treatment.

When considering what the term “fair,” means in the employment context, several factors must be taken into account, including: 1) whether an employee knew what was expected of him or her; 2) whether those expectations were reasonable; 3) whether the employee was ever informed that he or she was not meeting the employer’s expectations; 4) whether the employee was given an opportunity to correct the situation (or whether the employee’s behavior and/or actions and/or job performance were so egregious and/or outrageous to warrant immediate termination); and 5) did the employer consistently enforce their rules and/or expectations.

Employee handbooks often provide the employee with the employer’s basic expectations, but it is also helpful to reiterate those expectations directly with the employee at the outset of employment and periodically during the course of employment. However, the employer’s expectations must of course be reasonable, i.e., it would not be reasonable for a part-time hourly retail sales associate to be expected to be available on-call twenty-four hours a day, seven (7) days a week.

If an employee is failing to meet the expectations of the employer, the employer should engage in an interactive process with the employee, aimed at resolving any dispute without further escalation, and at affording both the employer and the employee an opportunity to be voice any concerns that they may have. If there is an employee manual or established procedure regarding progressive discipline, then that should be uniformly followed, particularly as the failure to follow established disciplinary and/or evaluation procedures and/or the inconsistent application of established practices or policies, may be later cited as evidence of an employer’s illegal motive for any adverse action against the employee.

When meeting with an employee to discuss their failure to meet employer expectations and/or poor job performance or any other issue, the employer should be mindful of documenting the meeting, during which the employer should reiterate his or her reasonable expectations of the employee and also provide the employee with a clear understanding of what needs to be done to improve their job performance and/or otherwise meet the employer’s expectations. Further, a timeframe for improvement should also be provided to the employee, and if the employee’s job is in immediate jeopardy (i.e., the employee is being given their last chance to improve their behavior, job performance and/or to otherwise correct the situation), that should be clearly communicated as well.

Under the Massachusetts personnel record statute (G.L. c. 149, §52C), employers must notify an employee within ten (10) days of placing any new information in the employee’s personnel file that “has been used or may be used, to negatively affect an employee’s qualifications for employment, promotion, transfer, additional compensation or the possibility that the employee will be subject to disciplinary action.” So, if following the meeting between the employer and employee, a summary of the meeting is placed in the employee’s file which contains negative information about the employee’s job performance, behavior, etc., the employee must be notified of the same.

If an employee continues to fail to meet the reasonable expectations of the employer after the same were clearly communicated to the employee and the employee was afforded a reasonable opportunity to correct the situation, the employer may elect to terminate the employee.

Importantly however, employers may be exposed to liability if they make sudden threats of termination and/or they terminate an employee for performance problems where there has been no prior communications made to the employee regarding such problems and/or there is a lack of documentation of performance problems, or where such documentation to support the decision to terminate appears to be created after the termination decision has already been made, or where the documentation supporting the decision to discipline and/or terminate, appears to be disingenuous and/or inconsistent.

Employers should bear in mind that in determining whether the employee was “fairly” terminated, factors that are typically considered (especially with respect to long term employees) are: 1) whether there was a documented history of discipline; 2) whether there was a recent documented deterioration in job performance; 3) whether there was a serious incident warranting discipline or immediate discharge (which incident was confirmed following a proper and thorough investigation and is not based on an unconfirmed and/or uncorroborated complaint); 4) and/or whether there was a change in circumstances that justify the adverse action, i.e., a change in the economy. However, an employer may be found liable for discrimination if there is only a one or two person “reduction in work force” and/or if younger, less-experienced co-workers are retained and not laid off as part of the “reduction in work force.”

Once the decision to terminate an employee is made, the employer should meet with the employee in a private place at the end of the day, to avoid the employee suffering any undue distress or embarrassment. The employer should have a witness present during the meeting, which meeting should be short and focused on the reasons for termination. The employer may afford the employee a reasonable opportunity to vent, but the meeting should not become hostile, with the employer becoming angry or debating the merits of their decision to terminate.

If the employer is willing to provide the employee with severance pay in connection with a severance agreement, the employer should explain to the employee that Massachusetts does not require severance pay, but that the employee is offering it to the employee, subject to their execution of a severance agreement. Employers should not re-negotiate the terms of the severance agreement during the termination meeting. If specific issues or questions are raised regarding the same, the employer should simply advise the employee that the employer will raise the matter with counsel and/or the employer’s human resources department and that they will respond accordingly. Further, if the employee is over forty (40) years old, they must be given at least twenty-one (21) days to review and return the agreement, and the employer should encourage the employee to carefully review the agreement before signing and to consult with counsel if so desired.

During the termination meeting, arrangements should be made for returning the employer’s property and to remind the employee of any obligations that he or she still owes to the employer, i.e., confidentiality, non-compete obligations, etc.

At the end of the termination meeting, the employer should provide the employee with his or her final paycheck for all wages up to the point of termination and for all accrued paid time. The employer should also notify the employee of his/her rights for health insurance continuation under COBRA or Massachusetts mini-COBRA. An employee should not remain on the employer’s health insurance plan (apart from COBRA) for any period beyond the termination, even if the employer is agreeing to severance pay. At the end of the termination meeting, the employer should also be careful about making any representations about unemployment benefits, and if asked, the employer simply state that while the employee has the right to apply, the employer does not make any promises about whether the employee will be actually be awarded any benefits.

Following the termination meeting, anyone present should prepare a brief summary of what transpired to be kept in the employee’s personnel file.

Details about the termination should not be communicated to other employees. Rather, if asked, the employer should simply state that the employee has left but that the circumstances of their departure are confidential.

Personnel files should remain confidential after an employee’s departure, in order to limit an employer’s exposure to a claim for defamation by the former employee. Conditional privilege may be available to an employer to disclose negative information concerning an employee when such disclosure is reasonably necessary to serve the employer’s legitimate interests, i.e., whether an employee can actually perform the duties of the position. However, conditional privilege does not apply (and will not be a viable defense to a claim for defamation) if the negative statement is made recklessly (i.e., with no effort to determine whether a statement is even true) or if the statement is made with actual malice. Conditional privilege also does not apply if the employer makes the statement to people who have no legitimate interest in the information (i.e., the discharge of a manager is communicated to the company’s office supply vendor).

When contacted for employment references of past employees, many employers err on the side of caution and only provide neutral references (i.e., dates of employment and positions without commentary). If an employee asks for a substantive reference letter (and the employer does not have an express policy prohibiting the same), the reference letter should only be sent upon the employee’s execution of a written reference authorization and waiver of liability in advance.

At the end of the day, the most important considerations for an employer to keep in mind when faced with issues of employee discipline and/or termination, is to act 1) consistently; 2) fairly; and 3) reasonably in light of all attendant circumstances.

Should you have any questions regarding this article, please contact Jennifer Barnett at jbarnett@meeb.com.