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Progressive Discipline and Its Legal Considerations

Documenting poor performance and progressive discipline is as much an art as it is a science. Unfortunately, most human resources professionals and line managers don’t have the time to study the nuances of progressive discipline, workplace due process, summary dismissal, discharge for cause, and the like. Even when that theory is mastered, however, there remains the challenge of incorporating all those ideas into a written memo that adequately documents subpar job performance or workplace conduct.

So it’s not surprising that many managers avoid writing up employees like the plague. And without a template to follow and samples to emulate, it’s also no wonder that many managers create memos that cannot withstand legal scrutiny.

If the objective of any disciplinary system is to create and maintain a productive and responsive workforce, then disciplinary actions, when they occur, should focus on rehabilitating employees by deterring them from repeating past problem behaviors. It is simply a fact of the modern workplace that you as a manager are charged with this responsibility.

Terminated employees who are successful at winning wrongful discharge claims, on the other hand, typically can prove that they were denied due process—what we call progressive discipline. They successfully argue, with the help of their attorneys, that your company breached its de facto obligation of good faith and fair dealing in managing its employees and in following its own policies. So if you’ve ever scratched your head about losing a case to an employee who flagrantly disregarded work responsibilities, it’s probably because an arbitrator concluded that due process was denied.

In other words, if the step formula outlined in your company’s progressive discipline policy is violated, or if you fail to properly notify an employee that her job is in jeopardy, then you may end up on the losing end of a wrongful termination suit. Ditto if you dole out punishment (i.e., termination) that doesn’t appear to fit the offense. In such cases, arbitrators may conclude that the misuse of your managerial discretion warrants the substitution of their judgment for yours in the handling of a specific worker. Frequently, that results in a lesser penalty (such as reinstatement plus a written warning instead of termination).

But what about your rights? Shouldn’t workers be held accountable for their actions? Don’t you retain any discretion in determining who should play on your team? After all, whose company is it? Well, don’t despair. The program outlined in this book is aimed at giving those rights back to you.

With the help of this system, here’s how discharge hearings should play out in the future: An arbitrator asks a former employee/plaintiff in a wrongful discharge action, “I see that your former company offered you an opportunity to take part in an EAP program. Did you contact the EAP?” The former employee’s flat response is, “No.” The arbitrator then asks, “I see that you were encouraged to fill out a section of this write-up regarding your own performance improvement. It’s blank, though. Why is that?” The apologetic response is, “Well, I guess I didn’t have time.”

The arbitrator continues: “I see. Hmm. Your company paid to send you to a one-day off-site training program on conflict resolution in the workplace. Did you attend that workshop?” The employee responds, “Yes, I did.” Finally, the arbitrator closes: “So you attended the workshop that was paid for. Yet you did little else to invest in your own personal improvement. And you signed a document showing that you agreed that if you didn’t meet the conditions of the agreement, you would resign or be terminated regardless of the reasons for your failure . . . I see no merit in your argument that you were denied due process or that your organization failed to make reasonable attempts to rehabilitate you. This case is dismissed.”

You’ll immediately notice how the burden was shifted to the employee in terms of proving that he made a good-faith effort to become a better worker. To make this fundamental paradigm shift occur, however, you have to provide the employee with resources he can use to improve himself: coaching and commitment, training, and material resources. And that’s a win for both sides, since you, the employer, focus on helping your workers and they, in turn, are charged with accepting your invitations to improve.

It all begins with due process—your efforts to ensure that the employee understands what the problem is, what she needs to do correct the problem, what will happen if she doesn’t, and how much time she has to demonstrate improvement.

The Elements of Due Process

A legal theory called the job as property doctrine states that employment is a fundamental right of American workers and that the loss of employment has such a serious impact on a person’s life that individuals should not lose their jobs without the protection of due process as later codified under the Fourteenth Amendment to the Constitution.¹ Affording due process means recognizing the employee’s right to be informed of unsatisfactory performance and to have a chance to defend himself and improve before an adverse employment action (such as discharge) is taken.

This property right protection places on management an obligation to deal in good faith with employees and to take corrective action measures based on just cause (i.e., good reason). This just cause requirement, in turn, mandates that businesses take corrective action measures only for clear, compelling, and justifiable reasons.

But what exactly are the elements of due process?

First, the employee must understand your expectations and the consequences of failing to meet your performance standards. If a write-up merely documents a performance problem without pointing to the consequences of failure to improve, the write-up will lack the “teeth” necessary to meet due process guidelines.

Second, you’ve got to be consistent in your application of your own rules. Workers have the right to consistent and predictable employer responses when a rule is violated. In other words, problems cannot be corrected on an ad hoc basis without the employer being perceived as arbitrary, unreasonable, or even discriminatory. Bear in mind as well that, generally speaking, practice trumps policy. In other words, regardless of what your handbook or policy and procedure manual says, your past practices will be scrutinized for consistency.

In addition, failure to follow through on threatened consequences damages the credibility of your disciplinary system and sets an unintended precedent: If Employee A, for example, was forgiven for making certain mistakes, Employees B through Z may arguably have to be forgiven for making those same or similar errors.

Third, the discipline must be appropriate for the offense. Occasional poor performance or a minor transgression (known as a de minimis infraction) is certainly actionable but probably not cause for termination. An employee’s performance track record and prior disciplinary history must certainly be taken into account.

Fourth, the employee should be given an opportunity to respond. Administering discipline without allowing employees to give their side of the story is begging for trouble. Unfortunately, of all the elements of due process that should be incorporated in any write-up blueprint, this self-defense principle is the one that’s most often lacking.

Fifth, you need to allow the employee a reasonable period of time to improve her performance. Otherwise, your disciplinary actions will appear to be an artificial excuse to get the employee out of the organization. We’ll talk more about acceptable probationary time frames in Chapter 4.

Several other rules of thumb are important to bear in mind as well when dealing with workplace due process:

As an employer, you have the right to change your policies at any time. Simply give your employees advance notice of the change, along with its effective date, so that all workers can ready themselves to meet your newly defined expectations.

Infractions need not be treated identically but should be treated consistently. For example, occasional versus habitual tardiness will typically invoke a different response from the company. In other words, you’re not precluded from disciplining Susan who reports to work late on a regular basis just because you didn’t discipline Fred who came in late one day last week. Likewise, sleeping on the job can be a significant infraction, but it’s certainly less of an issue for a secretary (who may receive a written warning for a first offense) than for a night shift nurse (whose first offense results in a final written warning) or for an anesthesiologist (who is terminated for falling asleep during a medical procedure).

The final incident plays a very significant role in determining how to best respond to any employee infraction: A clean and compelling final incident, in breach of previous documented warnings, makes for a much safer termination should you company later be challenged. Therefore, look especially to the nature of the final incident when considering termination.

The Traditional Progressive Discipline Paradigm

The traditional paradigm is used to prove, via documentation, that you made a good-faith effort to lead the employee down the right path. Your affirmative efforts to improve your employee’s performance must have been willfully rebuffed despite repeated warnings so that you, as a reasonable employer, were left with no choice other than termination. Keep in mind that you may be required to demonstrate that the discipline was meted out in a fair manner that was consistent with your own policies so that any worker could reasonably expect to be terminated under similar circumstances.

Repeated Violations Trigger Disciplinary Progression

But how exactly does progressive discipline progress? Usually the impetus that moves the process from one stage to the next is a repeated violation of the same rule or type of rule (for example, repeated tardiness or unexcused absence). In essence, there must be a link or nexus between events in order to move to the next stage. Without an interrelationship between events, you will end up with a series of independent verbal warnings rather than a progression from a verbal to a written to a final written warning.

For example, an employee who violates your organization’s attendance policy and one week later fails to meet a deadline may receive two separate verbal warnings for independent and unrelated transgressions. On the other hand, an employee who violates your company’s attendance policy and then develops a tardiness problem will indeed progress through the discipline system because both transgressions are intrinsically connected: Unauthorized absence and tardiness both have a negative effect on the work flow of your office.

It is by no means uncommon to have an employee on separate paths of discipline. A shipping clerk who is already on final written warning for insubordination shouldn’t necessarily be terminated if a tardiness problem begins. Tardiness, an event unrelated to insubordination, would not typically be used as the proverbial “straw that breaks the camel’s back” to justify termination. That’s because there is no nexus or interrelationship between the events: Tardiness interferes with work flow, whereas insubordination relates to individual behavior and conduct—a separate business issue altogether.

On the other hand, because insubordination is a conduct infraction, any other behavior or conduct infractions during the active period of the write-up may indeed result in dismissal. For example, if this shipping clerk on final written warning for insubordination suddenly engages in antagonistic behavior toward his coworkers, insults a customer, or refuses to follow a supervisor’s instructions, then a discharge determination could be warranted (barring any significant mitigating circumstances, of course).

Summary Discharges

With all this emphasis on progressive discipline, whatever happened to your right to fire someone on the spot? Well, it’s still there: You can fire anyone at any time. However, you may have difficulty defending your actions in a wrongful termination claim. If you’ve denied an employee due process, the technical merits of your arguments may be largely ignored.

On the other hand, you don’t have to offer progressive discipline to someone who breaks the law. Progressive discipline is an employee benefit. If an employee engages in illegal activity or other egregious conduct (such as gross insubordination, gross negligence, theft, embezzlement, time card fraud, or drug use on company premises), you’ve probably got a clear shot at a quick and defensible termination (known as a summary dismissal).

To be on the safe side, though, speak with a labor attorney to fully explore the ramifications of such a dismissal. It’s always worth getting a professional legal opinion to ensure that you haven’t overlooked anything. If you need to buy yourself some extra time, you can always place the worker on investigatory leave with pay pending further review and a final decision.

Employment at Will

Of course, when it comes to summarily discharging employees, that will also be influenced by the employment status of your workers. If they are hired at will, you will have more leeway in determining whether to retain or terminate. Employment-at-will status is employment that does not provide an employee with job security, since the person can be fired on a moment’s notice with or without cause. The employment-at-will relationship is created when an employee agrees to work for an employer for an unspecified period of time. It holds that an employer can terminate a worker at any time for any legitimate reason or for no reason at all. Likewise, the employee may leave the organization at any time, with or without notice.²

On the other hand, the rule is littered with statutory exceptions. That means that you cannot terminate workers if the discharge infringes upon a protected right or goes against public policy. Specifically, there are five exceptions to the employment-at-will doctrine:

1. Employment contracts. If a contract exists, you must adhere to its terms and conditions, including notice requirements, or else you breach the contract. When an employment contract covers a fixed period of time (for example, three years) and is silent concerning grounds for terminating the contract, courts in many states have held that employers have an implied obligation to discharge only for just cause.

2. Statutory considerations. Dismissals are illegal if they are based on age, sex, national origin, religion, union membership, or any other category established in Title VII of the 1964 Civil Rights Act or other legislation. Discrimination is consequently one of the exceptions to the employment-at-will rule, and charges may arise any time you fire someone in a protected class.

3. Public policy exceptions. You cannot terminate an employee for filing a worker’s compensation claim, for whistle-blowing, for engaging in group activities that protest unsafe work conditions, or for refusing to commit an unlawful act on the employer’s behalf.

4. Implied covenants of good faith and fair dealing. You are prohibited from discharging long-term employees just before they are due to receive anticipated financial benefits.

5. Implied contract exceptions. You may be bound by promises published in your employee handbook or oral promises made at the hiring interview requiring just cause to terminate.

Because of these limitations, you must attempt to protect the at-will employment status at all costs.

Employment-at-will language is typically found at only three critical junctures in the employer-employee relationship: (1) the employment application, (2) the offer letter, and (3) the employee handbook.³ The at-will language certainly belongs there, but numerous court cases have found that if a long-term employee hasn’t seen an application or offer letter since the date of hire ten or twenty years ago, then she may not necessarily be subject to an at-will employment relationship. Courts have held that it has simply been too long since that message was communicated to the employee. Therefore, communicating your company’s employment-at-will policy during the disciplinary process helps protect that policy.

Does employment at will fly in the face of progressive discipline and due process? After all, if you have to take employees through a series of disciplinary actions before you can terminate for cause, does that naturally erode your ability to terminate at whim? Well, the two concepts are not mutually exclusive; rather, they are among the complicated, and oftentimes contradictory, issues that make up employment law today. By making the at-will nature of employment known expressly (i.e., in writing), you should be better able to successfully argue that an employee did not have a reasonable expectation that discharge could be only for cause.

The Employment-at-Will Affirmative Defense

Remember that your defense attorney will initially attempt to gain a summary judgment—an immediate dismissal—of a wrongful termination claim by employing the at-will defense at the hearing stage. If your defense attorney successfully argues that the ex-worker was employed at-will, understood that she was at-will, and had not had the at-will relationship abrogated during her tenure with your company by any manager’s actions or verbal assurances, then the case could simply be dismissed during the hearing (i.e., before the trial stage). The reasons for the termination need not be considered.

However, discrimination is an exception to employment at will. If a plaintiff attorney can show that you discriminated against the employee, retaliated against her for filing a workers’ compensation claim, or verbally implied (in front of witnesses) that people “don’t get fired around here unless they deserve it,” then the employment-at-will affirmative defense may not be sustained.

As a result, if a summary dismissal is not initially granted at the hearing stage by the court or arbitrator, then you will have to justify your decision to terminate at trial by proving that you had just cause. And the way that most employers successfully prove that they had just cause is by presenting the court or the arbitrator with documentation in the form of progressive discipline.

Although much is said about the erosion of the employment-at-will doctrine, “Were you hired at-will?” is still one of the first questions a plaintiff’s attorney will ask your ex-employee when deciding whether to take on the case. The attorney knows that if the employee was hired at will, chances of obtaining damages from the company—including damages for wrongful discharge and breach of contract—may be dramatically reduced (assuming the at-will defense is affirmed by the court).⁴

This statement is borne out by employment law case history over the past eighty years. At-will employment came about in the early 1930s. Since then, employees who were dissatisfied with the reasons given for their dismissal have tried to sue their employers, claiming that the companies had to have good cause to fire them. And for many years, courts typically supported employers because of the at-will employment relationship.

That all ended in the early 1980s when a California court held that although the law, as it was written, created a presumption of an at-will employment relationship, that presumption could be challenged by evidence that both parties entered into an employment contract that allowed only termination for cause. Specifically in the 1980 Tameny v. Atlantic Richfield Co. case, then California Chief Justice Rose Bird ruled that a long-term employee couldn’t be fired under the employment-at-will affirmative defense for refusing to engage in unlawful activities on the company’s behalf (in this case, price fixing). Once the employment-at-will veil was pierced, the public policy exception was born, and tort law became a prominent part of the legal landscape.

What was also significant in the California decision was the court’s further ruling that the contract could be implied (rather than written or oral) based on a company’s past practices. In addition, if language in employee handbooks seemed to suggest that employees could be fired only after some form of due process was provided, then the company was barred from exercising its right to terminate at will. As a result, reaffirming your at-will employment relationship during the disciplinary process gives you the chance to strengthen your defense against a plaintiff’s attorney who alleges that an implied promise existed requiring for cause justification.

Implied contract legal theory presents a serious threat to your right to fire an employee on a moment’s notice with or without cause. If you inadvertently transform the employment-at-will relationship into an employment with termination for cause only relationship, you will unnecessarily expose your organization to increased liability by eliminating your company’s first line of defense: the summary judgment.

Without a crystal ball, you can’t know in advance what kind of a spin a plaintiff’s attorney will place on a case. Therefore, you also can’t know if your company will be successful in asserting the employment-at-will affirmative defense (and thereby winning a summary judgment at the hearing stage). Therefore, you should always assume that you’ll have to do both: (1) Protect the employment-at-will relationship via your company documentation, but (2) always be prepared to defend your decision to terminate on the merits of the employee’s performance (i.e., by showing cause in the form of progressive discipline). In other words, regardless of the employment-at-will relationship, always be prepared to demonstrate just cause to justify a dismissal via documentation. That’s fair to your employees and healthy for your company.

Relying on employment at will as a sole defense in terminating workers provides far too many employers with a false sense of security. To avoid falling into that trap, you should protect the employment-at-will relationship with your workers by documenting its existence whenever possible. However, you shouldn’t rely on it to make wrongful termination charges magically disappear.

Legal Implications of Probationary Periods

Some labor experts discourage the use of probationary periods for employees who are either newly hired by a company or newly transferred into another position. Their logic stems from the fact that some courts have ruled that the mere completion of such an initial evaluation period suggests express or implied contract obligations that make it more difficult for companies to discharge at will.

Specifically, the completion of a probationary period could be construed to mean that the company can no longer discharge the employee without good cause. Proponents of doing away with probationary periods argue that employees are subject to the same standards of performance and conduct throughout their employment; consequently, no probationary period is necessary, and no implications of job security will arise for employees once their probationary periods are over.

Other labor experts favor retaining traditional probationary periods but abolishing that outdated term, which has been unfavorably interpreted by the courts. They recommend using terms like introductory, evaluation, training, initiation, eligibility, or orientation periods. True, these designations may help avoid the undesired implications and assurances that the term probation has historically carried with it. However, an employee might still infer from these alternative names that the employer has a policy of not discharging without good cause once the period is completed. You, the employer, could consequently find yourself fighting a legal battle over an allegation that you had an obligation to accord due process once a worker passed probation.

Of course, the mere use of the word probation rather than introduction isn’t the whole issue. In interpreting probationary periods, courts look for some reason that they exist—specifically, the employee must receive some form of benefit upon completion of the period. Therefore, to establish a formal probationary period, you need to ensure that there is some difference between your workers’ status during the probationary period and after it. Typically, this is done by allowing employees to enjoy some benefit (like accrued vacation or sick leave or 401(k) enrollment) that they did not have before completing the probationary period.⁵

The pros and cons of probationary or introductory periods are well beyond the scope of this book and are prime fodder for legal debate. Still, the ultimate significance of employing such an initiation period will be determined by the laws of your state. Of course, if you’re governed by a union contract (AKA collective bargaining agreement) that stipulates that “employees in their probationary period may be discharged without cause and without notice,” you’ll gain a significant advantage in the whole matter. In essence, such language provides you, the employer, with a contractual right to terminate union workers at whim while in their probationary period. Don’t be surprised to learn, however, that the union will argue strongly that once that probation period is over, its members (i.e., your employers) cannot be terminated without showing cause.

Generally speaking, it makes total sense to arm yourself with as much flexibility as possible when elevating new employees, without the obligations of due process. And in states that recognize an employment-at-will relationship, probationary periods may be of less significance anyway, since they may not provide your company with any additional flexibility or discretion.

Since most organizations employ some kind of formal initiation period in which to judge employee performance before elevating new hires to “regular” employee status, we’ll address disciplining the probationary employee in our samples. Remember that although most employers use probationary time frames of sixty or ninety days, you generally have substantial discretion in setting a period from thirty days to one year. Shorter time frames (thirty to ninety days) are normally used for more junior types of positions; longer windows, like six months or one year, are usually reserved for director and vice presidential–level roles. Practicality will dictate what the reasonable duration should be for the various positions in your organization.

In an effort to diminish the implied interpretation that completing the probationary period guarantees greater job security, your handbook language should expressly state that “the employment relationship is terminable at will, either with or without cause and with or without notice, at any time during the employment relationship.”

In addition, you should expressly state that the probationary period can be extended more than once at the company’s sole discretion and that it also becomes effective at the time of transfer, reassignment, or promotion. Finally, remember to calculate this period in calendar days rather than weeks or months. Any ambiguity in your policy language will most likely be interpreted against you in a court of law. To learn more about the suitability of a probationary period in your company, consult your labor attorney.

1 Arthur W. Sherman, Jr., George W. Bohlander, and Herbert J. Chruden, Managing Human Resources, 8th Edition (Cincinnati, OH: South-Western Publishing Company, 1988), p. 442.

2 Most states, but not all, allow at-will employment relationships. For example, the state of Montana has enacted a statute that completely abrogates employment at will. As a result, Montana employers are prohibited from discharging employees without good cause.

3 If you are in an employment-at-will state, you can establish an employment-at-will policy in your employee handbook (or, if you don’t have an employee handbook, in a separate memo included in the employee’s new hire packet) by expressly stating:

Violation of company policies and rules may warrant disciplinary action. Forms of discipline that the company may elect to use include verbal corrections, written warnings, final written warnings, and/or suspensions. The system is not formal, and the company may, at its sole and absolute discretion, deviate from any order of progressive disciplinary actions and utilize whatever form of discipline is deemed appropriate under the circumstances, up to and including immediate termination of employment. The company’s discipline policy in no way limits or alters the at-will employment relationship.

4 In other words, for those employees whose rights are not protected by a labor agreement, employment contract, or legal statute (i.e., regarding age, race, or gender), their protection against wrongful discharge is minimal.

5 To establish that the probationary period is a point when performance is evaluated before full benefits begin, create a written policy in your handbook that states: “Completion of the trial period does not entitle you to remain employed by the company for any definite period of time. Both you and the company are free, at any time, with or without notice and with or without cause, to end the employment relationship. After completion of the trial period, eligible employees will receive the benefits described in this handbook.”