Employee discipline – coaching, verbal and written warnings, and so on – is one of the most effective tools to improve employee performance and protect your company from liability.
Used right, your company’s discipline system will help managers recognize problems early, work with employees to turn performance around, and ensure that employees know what the company expects.
However, discipline can also lead to legal problems, particularly if your company’s policy doesn’t protect your right to terminate at will, managers discipline employees inconsistently, or managers discipline employees for illegal reasons.
Here are a few basic principles that will help your company stay out of legal trouble.
Avoiding Discrimination Claims
Perhaps the most important legal consideration to keep in mind when disciplining employees is the potential for discrimination claims. Under federal law, it’s illegal to discriminate against employees based on certain protected characteristics—such as race, gender, pregnancy, religion, national origin, disability, and age. Many states have laws that outlaw discrimination on additional grounds, such as marital status or HIV/AIDS status.
Most federal antidiscrimination laws apply only to employers with 15 or more employees (or 20 or more employees for age discrimination). So if your business is very small, these laws might not apply to you or your employees.
Keep in mind, however, that your state, county, or city might have a law or ordinance that applies even to the smallest employers. Regardless of whether these laws apply to your business, you should implement fair, antidiscriminatory discipline policies. (To learn more, read our article on antidiscrimination law basics for employers.)
Generally, an employee must file a complaint with the Equal Employment Opportunity Commission (EEOC)—or a similar state agency—before filing a discrimination lawsuit in court. If an employee files a complaint against your company, you should consult with an employment lawyer on how best to proceed.
Discipline and At-Will Employment
Most employees in this country work at will. This means they may quit at any time, for any reason, and your company may fire them at any time, for any reason that is legal. (You may not fire an employee for discriminatory reasons, for example, or to retaliate against the employee for complaining of illegal activity, such as unpaid wages or safety violations.)
Your company’s discipline policy should explicitly state that employees work at will and may be fired at any time, for any legal reason. If your company has a progressive discipline policy (one that imposes increasingly severe measures for repeated or more serious problems), it should clearly say that the company has the discretion to decide whether and when to use these steps.
Otherwise, an employee might argue that the policy created a contract promising that employees would be fired only once they have exhausted every procedure in your company’s discipline policy.
Managers should also be careful when they speak to employees about discipline. Managers should not, for instance, promise that employees will have a bright future at the company if they can improve their performance. Statements like these can create an oral contract for continued employment, rather than protect your company’s right to terminate at will.
Inconsistent Enforcement of Company Policies
Managers must impose discipline consistently. In other words, employees who commit the same misconduct or display the same performance problems should be treated in the same manner.
For example, suppose you give warnings to three male employees for coming in to work late. Then, because you’re fed up with tardiness, you decide to fire the next employee who comes in late. If that employee is a female, she could claim that you engaged in gender discrimination because you disciplined her more harshly than the male employees for the same offense.
If managers play favorites or come down harder on some employees than others, it could result in a discrimination claim against your company by an employee who feels that a protected characteristic, such as race or disability, played a role in the manager’s decision.
Employee Discipline Confidentiality Laws
Employers cannot prohibit their workers from revealing that they have been disciplined. Under the National Labor Relations Act (NLRA), employees have a right to engage in protected concerted activity. One such protected activity is discussing working conditions, including disciplinary matters, with coworkers.
Moreover, employers generally can't assure their employees that disciplinary matters will remain confidential. For example, employers could have to reveal disciplinary actions as a result of a subpoena or during the discovery process in a lawsuit.
Unfair Disciplinary Action at Work
Federal and state laws give employees the right to take time off for a variety of reasons, including family and medical leave, pregnancy disability leave, military leave, leave to handle domestic violence issues, time off to attend a child’s school activities, and more.
If your company disciplines employees for absences (as most do), make sure you are not inadvertently punishing employees for exercising their legal rights. If you discipline an employee for taking leave to which the employee is legally entitled, you are asking for trouble.
Retaliation Against Employees in the Workplace
The same laws that prohibit discrimination also prohibit retaliation against employees who file a discrimination claim or otherwise exercise their employment rights.
In other words, if an employee complains about discrimination or harassment in the workplace, you can't take any negative action against that employee that would be considered punishing them for complaining in the first place.
Retaliation can take many forms, including:
- demoting an employee
- refusing to promote an employee, and
- giving the employee unjustified negative performance reviews.
Even small things—such as changing an employee’s shifts—can be considered retaliation, if the employee finds those shifts less desirable. (Read our article on how to prevent workplace retaliation claims for more details on this topic.)
Tips for Enforcing a Discipline Policy
The following guidelines will help you avoid discrimination and other types of claims by employees:
- Create a clear discipline policy. Your company should have a written disciplinary policy—either as part of an employee handbook or as a stand-alone written policy. The policy should clearly state that the company will discipline employees for performance, misconduct, and violation of company rules. You might want to include the types of discipline that can be imposed—for example, a verbal warning, a written warning, suspension, and termination—as well as examples of disciplinable offenses. However, you should explain that employment with the company is at will, that the company can discipline for other offenses, and that employees can be terminated without receiving prior discipline.
- Communicate the policy to employees. You should distribute your discipline policy (and other company policies) to all employees. You should explain the policy, answer questions, and ask employees to acknowledge receipt of the policy in writing.
- Consistently enforce the policy. Consistency in disciplining employees is critical. But, consistency doesn't necessarily mean that you have to apply the exact same discipline and follow the exact same procedures in every situation. Instead, look at the big picture to make sure that similarly situated employees receive similar discipline for similar offenses.
- Document disciplinary actions. Creating a paper trail to back up terminations is one of the most important things your business can do. That way, you can show that an employee was actually fired for poor performance or misconduct, rather than for discriminatory reasons.
- Have a process for internal complaints. Your company should provide employees with a process for making complaints within the company, which can be as simple as having employees come to you with their concerns. If employees are concerned about unfair treatment, you can remedy the situation before they file a lawsuit or launch an agency complaint.
Talk to an Employment Lawyer
For help drafting or reviewing your company’s leave policy and other documents, and for advice on whether you should fire an employee who reaches the end of your disciplinary steps, talk to an experienced employment lawyer.