Common Questions About the Performance Management and Termination Process
What is progressive discipline?
You can't attempt to understand the firing process without studying progressive discipline. Progressive discipline is a series of attempts that employers make to turn around poor-performing employees via verbal and written performance warnings. When these warnings are violated, then companies terminate employees ''for cause.'' Progressive discipline is therefore the precursor to termination for cause.
The logic to these documented warnings is threefold: First, employees should have the right to learn about performance problems before they are terminated so that they can improve and ultimately have a fighting chance at keeping their jobs. Second, should your company be sued by an ex-employee for wrongful discharge (see Question 69), you could defend your company's actions by demonstrating that you acted responsibly as an employer in letting that individual go. Third, if you can turn around a poor performer, you not only get a valuable one but also spare yourself the headache and money of replacing that employee.
Progressive discipline ensures that your company acts reasonably and documents the effect of the worker's unwillingness or inability to do his job. Later, if you're sued, you can prove that, despite your interventions to better the situation, you ultimately were left with no choice but to terminate that substandard performer. In addition, you acted reasonably and responsibly by documenting your affirmative efforts at helping to rehabilitate your worker. You also can prove the employee realized that his job was in danger of being lost. Each attempt to document the ongoing performance problems adds a more serious element to the process: consequences such as suspension, probation, and ultimately termination step up the severity of failure to improve. Therefore, a plaintiff attorney would have difficulty asserting that her client, your ex-employee, was denied ''workplace due process.''
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Workplace due process comes from a legal theory known as the ''job as property doctrine.'' This theory asserts that the right to work is so intrinsic to American citizens that work should not be denied arbitrarily or capriciously, without just cause as accorded under the Fourteenth Amendment to the Constitution. The way employers accord due process in the workplace is via a series of written performance warnings in the progressive discipline process.
This fundamental expectation of fairness is alive and well today in courtrooms and arbitrators' chambers. Although the concept of ''employment-at-will'' severely restricted the job as property doctrine when employment-at-will was born in the 1930s, today employment-at-will has been severely restricted in its use. Now, when wrongful termination claims are not dismissed via summary judgment and end up going before a court, companies must show that they had cause to dismiss a worker. Failure to demonstrate cause may result in a court or arbitrator mitigating your decision to terminate to a lesser penalty (e.g., reinstatement plus an unpaid suspension, for example).
What does it mean for an employee to be hired "at will''?
Few issues cause such confusion in the workplace as the concept of employment-at-will. That's for good reason: Many managers believe it should say what it does, that is, allow managers to terminate employees with or without cause or prior notice. Defense attorneys who defend your company from wrongful discharge lawsuits initiated by your ex-employees employ the ''at-will affirmative defense'' to gain a summary judgment of the case. In the courtroom, your attorneys will argue that:
- Sally Brown was hired at will.
- Sally understood that she was hired at will, as attested to by her signature on the employment-at-will agreement in her offer letter, the employment application, and the free-standing employment-at-will agreement in her personnel file.
- Your company did nothing to abrogate the employment-at-will relationship by engaging in oral or written contracts to the contrary.
In essence, if Sally was indeed employed at will, then the merits of her case need not be heard: It was simply the employer's right to terminate her at any time with or without cause. Hence, your defense attorneys will ask for a summary judgment, that is, an immediate dismissal of the lawsuit.
So where's the rub? Well, there are many exceptions to the employment-at-will rule, and a plaintiff attorney will argue that your company engaged in one of the exceptions, thereby abrogating the employment-at-will relationship.
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Without a crystal ball, you can't know what kind of spin a plaintiff attorney will place on a wrongful termination charge two years from now. The plaintiff attorney may argue that your company:
- Discriminated against the employee on the basis of the individual's age, race, sex, or sexual orientation. These are statutory considerations established in Title VII of the Civil Rights Act of 1964 and other legislation.
- Retaliated against the employee for having filed a workers' comp claim, for whistle-blowing, for engaging in group activities that protest unsafe working conditions, or for refusing to commit an unlawful act on the employer's behalf. These are known as public policy exceptions.
- Discharged a long-term employee just before she was due to receive some anticipated financial benefit (e.g., pension plan vesting). This is known as an implied covenant of good faith and fair dealing.
- Failed to follow promises documented in your employee handbook or verbally made during the hiring interview that required just cause to terminate. These are known as implied contract exceptions.
Following are other exceptions to employment-at-will. Remember, it is illegal to terminate or otherwise punish an employee as a result of the individual's either doing or refusing to do the following activities, or for the employee's acknowledgment of any of these conditions:
- Attendance in an alcohol or drug abuse rehabilitation program
- Disclosure of a condition of illiteracy
- Union membership, organizational activities, or other ''protected, concerted'' activities
- Wage garnishment
- Filing a petition for bankruptcy
- Refusal to submit to polygraph of lie detector test
- Military service
- Pregnancy, childbirth, or related medical conditions
- Infection with HIV virus or AIDS or the appearance of physical symptoms
So here's the bottom line: Without a crystal ball, you can't know what kind of spin a plaintiff attorney will place on a wrongful termination charge two years from now. Therefore, you can't assume you'll win a summary judgment of the case on the basis of the employment-at-will affirmative defense. As a result, you should ''assume the default'': In other words, always be prepared to show cause despite the existence of an at-will employment relationship.
''For cause'' termination is the opposite of employment at will. It dictates that employers must have a good reason to terminate and that employees should be accorded workplace due process before losing their jobs. The way employers typically show due process is in the form of written warnings as part of a progressive discipline system. After all, many judges and arbitrators reason that ''if it wasn't written down, it never happened.'' And that's a fairly reasonable assumption on their part: ''If the person's performance was so bad that the company was thinking of terminating this person, then management should have at least taken the time to put it down in writing'' goes the court's logic.
And that's why we live with the dichotomy between employment-at-will and progressive discipline. It's not one or the other— it's both. This way, if you win the employment-at-will summary judgment, good for you. However, if the judge throws out the employment-at-will affirmative defense and doesn't grant a summary judgment, you can defend the termination on its own merits by showing just cause.
Yes, this is a somewhat conservative approach. On the other hand, if you made all termination decisions on the basis of employees' at-will status, you'd be sailing with a loose cannon on the deck of your ship. In essence, without a consistent progressive discipline system and written warnings in an ex-employee's file, any cases that didn't get summarily dismissed would need to be settled out of court—you'd simply have no way to defend your actions.