Council on Education In Management
Discipline & Termination Law 1999
Many managers or supervisors feel that their time would be better spent performing more mission-critical tasks than documenting the ups and downs of particular employees. Although legal counsel and human resources consultants are constantly repeating "document, document, document," many managers and supervisors put off such documentation and give it a low priority. Such a disparity exists for a simple reason: appropriate documentation is hard. And hard things take additional time and focus. As a result, managers and supervisors may conclude that the advantages of appropriate documentation are outweighed by the time and effort required. I hope to demystify appropriate documentation and highlight the ways that it can become a strength, rather than a lurking fear.
Documentation is important in a variety of ways. Some record-keeping is required by law.(1) These required records are not the focus of this paper, but are described well in materials available from the United States Department of Labor. Beyond these basic documents, many employment claims, from wrongful discharge to discrimination to sexual harassment, may come down to a swearing match between employee and employer. In these situations, the employer is seen as having the comparative advantage with respect to record-keeping - in effect, if there are no documents, the employee is much more likely to win.(2) Some records may also be required by an employer's own personnel policies - failure to keep such documentation could in itself be construed as a breach of an implied contract. Moreover, keeping appropriate and accurate documentation provides numerous human resources advantages and will make for more effective managers and supervisors.
This paper will discuss what documentation you may want in your files, why such documentation can be helpful, and how to generate appropriate documentation.
I. WHAT DOCUMENTATION DO YOU WANT?
Appropriate documentation before employment, during employment, and after employment is discussed below.
A. Before Employment.
EMPLOYMENT STATUS - WHAT YOU WANT: The most important documentation you can have before employment is a clear and accurate statement of an employee's employment status. That is, a document that shows that the employee started employment on X date at Y salary or wage and in Z position. This document should also show whether the employee is an "at-will" employee, or, if not, the other terms and conditions of the employee's contract. If the employee is on contract, the employer should have a clear statement of the term of the contract and a clear description of the circumstances under which the contract may be terminated by either party.(3) It should be clear from the face of this document that the employee is aware of an understands the nature of employment at issue.
There are a number of mechanisms to document this information. Employers may provide this information by a formal offer letter sent to the employee, by an express contract, or on the application for a particular position. Another way to provide such information is through an Employee Handbook or Personnel Manual. Employers who choose this option should include in the personnel files of employees a signed acknowledgment that the employee has read and understands the manual. The acknowledgment must include a prominently displayed at-will disclaimer stating that employment is "at-will" and may be terminated by either party without cause or notice.(4)
WHAT YOU DON'T WANT: Complete ambiguity as to an employee's status is to an employer's disadvantage, since the employee may effectively use allegations of oral representations to define the employment relationship. An employer also probably does not want statements or implications that an employee is only terminable for good cause unless there is a very good reason. In some industries, such an agreement is needed to attract and retain qualified employees. Such an agreement may also be a good human resources tool to motivate employees. In these situations, a statement not to terminate except for good cause may be justified, but in many circumstances, such a statement does nothing except give disgruntled employees another cause of action in a possible lawsuit. Avoid such statements unless you have thoroughly thought out the basis for such a policy.
CONSENTS - WHAT YOU WANT: An employer should also make sure to obtain any necessary consents during the pre-employment process. For example, New Mexico law provides that employers must pay wages in full, less only payroll deductions authorized by the employee in writing.(5) Therefore, any applicable deductions (for uniforms, additional insurance premiums, and the like) should be authorized by the employee in writing. Similarly, an employer should obtain consents if it intends to conduct background checks or drug testing of its employees.
EMPLOYMENT POLICIES - WHAT YOU WANT: Employers should also consider including equal employment opportunity and sexual harassment policies as part of the pre-employment documentation delivered to employees (and reflected in their personnel file). Such policies are a must if the employer has a personnel manual and a probably worth the effort even absent a manual. Recent decisions by the United States Supreme Court suggest that, at a minimum, an employer should be able to show that it effectively communicated its sexual harassment policy(6) to its employees and acted consistently with that policy.(7)
If an employer chooses to use an employee handbook or personnel manual, there are a number of additional policies that should also be included. If the employer is subject to the Family and Medical Leave Act ("FMLA") and has such a manual, the Department of Labor requires that certain statements regarding the FMLA be included. 29C.F.R.§825.301(a)(1)(1998). It would also be beneficial to include clear standards to be applied in employee discipline, including termination. Employers should avoid strict "progressive discipline" policies that require specific disciplinary steps in a specific order. Instead, employers may wish to give "examples" or "guidelines" of the types of discipline that may be administered, but specifically retain, in employer's sole discretion, the power to administer appropriate discipline under the circumstances.
WHAT YOU DON'T WANT: Employers should avoid policies they do not want to or cannot follow. This advice sounds simplistic, but employers often adopt policies because they sound like a good idea or are told they "reduce risk" without thinking about or allocating resources for necessary follow-through. When in doubt, employers should enact policies they are SURE can be implemented as stated, as long as they meet legal minimums. In many contexts, employers add fuel to an employment lawsuit by failing to follow its own policies in addition to the original allegations of the lawsuit.
Employers should try to avoid receiving or retaining documents about employees' membership in protected classifications. Obviously, in some contexts, such information is unavoidable - such as a workplace injury that results in a workers' compensation claim or record-keeping required by the EEOC or the OFCCP. Wherever possible, employers should try to keep documents demonstrating membership in a protected classification out of employees' individual personnel files. The Americans with Disabilities Act specifically mandates that employers keep all medical information in a separate file, including workers' compensation information.(8)
Employers should also avoid receiving or retaining documents with excessive information about an employee's private life, such as recreational activities, off-duty conduct, and especially membership in particular organizations.(9)
B. During Employment.
The most important documentation created during an employee's employment will be documentation regarding the employee's performance. Frequently, an employee's performance evaluations will be the most important evidence that an employer has regarding performance problem. Documented warnings of performance problems can also be very important. Unfortunately, not enough employers use these tools consistently to produce the accurate documentation necessary to defend against employment suits.
1. Performance Evaluations.
Although most employers have a performance evaluation policy in place, many employers do not follow their own policies. Failure to evaluate employees consistently can be the subject of a lawsuit, such as where an employee claims that s/he was treated differently because s/he was never given a proper evaluation.(10) Employees also frequently argue that they never had notice of performance problems. Public employers could also face a due process argument if they attempt to discipline employees whose performance has not been consistently evaluated.
From a legal perspective, performance evaluations are one of the most misused documents in an employee's personnel file. Some commentators suggest that performance evaluations are simply inaccurate in practice.(11) Rather than throw the baby out with the bath water, however, I believe that performance evaluations sometime cause problems simply because they are hard. Things that are hard to do require more preparation, more time, and more effort, elements which are missing in most employers' evaluation process. Managers and supervisors can make for more effective performance evaluations by becoming aware of the following possible problems in the evaluation process.
Ratings Inflation. Many, if not most, employers use a vastly inflated rating system for evaluations in which even the worst employees are rated as "fair" or "good" and the scale goes up from there(12). Ratings inflation occurs for several reasons, the simplest being that it is hard to tell someone they are performing poorly. As a result, employers soft-pedal evaluations and use "fair," "good," or "satisfactory" ratings as euphemisms for poor performance. In many cases, at the time, both the employer and the employee recognize that the employee has received a poor performance evaluation. But employment lawsuits are not decided "at the time" and they are not decided by people involved in the evaluation process at your organization. In such lawsuits, a satisfactory evaluation will mean satisfactory performance, leaving an employer to scramble for other evidence demonstrating that the employee actually performed poorly.(13)
Ratings inflation also occurs because managers or supervisors want to use the performance evaluation as a way to motivate and improve the morale of employees, rather than as a way to criticize their performance. Even if some human resources benefit exists, this approach increases an organization's legal risk. Moreover, positive but inaccurate performance evaluations may not have a motivating or uplifting effect on problem employees. To the contrary, there is a possibility that such evaluations effectively lower the bar for problem employees and encourage poor performance.
Ratings inflation seems to be a frequent problem where the lines of authority are somewhat disjointed; for example, where the management employees responsible for employee discipline (frequently human resources personnel) are not the direct supervisors of the employees at issue. In such situations, a direct supervisor may inflate evaluation ratings in order to avoid increasing the day-to-day conflicts between the supervisor and the employee. While this may be an effective short-term strategy, it poses an enormous problem for the human resources department down the road when the supervisor wants to discipline or even terminate the employee.
One strategy to avoid ratings inflation is to use comments to highlight both good and bad aspects of an employee's performance. This approach allows managers the opportunity to wax eloquent about an employee's good points while still noting poor performance in other areas. This approach also provides the employee with more specificity about their problem areas. Supervisors should also be trained to give evaluations that minimize the ratings inflation effect, including becoming aware of the problems that can arise because of ratings inflation.
Other Effects.
There are a number of other factors which may affect the effectiveness of performance evaluations. The "halo effect" refers to supervisors who remember only good performance or who tend to discount bad performance because of a particular incident in the past(14). The effect can be harmful because the assistance provided can be minimal compared to the overall effectiveness of the employee.
Supervisors may also have a tendency to recall only the worker's most recent performance (recency bias) or to assume that a long-term employee is continuing to perform the way s/he always has (length of service bias)(15). A supervisor who has a cordial working relationship with an employee is more likely to give that employee favorable performance evaluations that may not accurately reflect performance. Managers and supervisors need to be aware of such unintentional biases to provide accurate performance evaluations.
While the biases described above can harm the effectiveness of the evaluation process, other types of biases can be, in themselves, violations of the law. Employers must be careful that evaluations are not biased based on demographic similarity or intentional bias on the basis of a protected classification, such as race, ethnicity, gender, age, or disability.
2. Warnings.
While documentation of formal performance evaluations is the foundation of appropriate documentation policies, other types of warnings can also be very effective in reducing an organization's risk of liability. Warnings given contemporaneously can be very effective to show performance problems because of their immediacy.(16) Unfortunately, too few employers regularly document the warnings or corrections given routinely to employees.
Virtually all employers give their employees oral notice or warnings about poor performance. Such notice may simply take the form of correcting an employee's performance, noting that the employee was late for work, or actually "warning"an employee that certain conduct is inappropriate and will not be tolerated. Many managers are hesitant to document these types of problems because they believe they are trivial, because they do not want to put something negative in an employee's personnel file, or because they simply do not have time. Yet, in many cases, documentation of exactly these kinds of problems would be the most useful evidence to back up an employer's contention that "there was some type of performance problem almost every day." Obviously, no manager should document every time s/he speaks to an employee. But where a problem exists that would justify discipline if it was recurring, some type of written documentation of oral warnings is probably appropriate.
Such documentation may take the form of a short memo from the manager to the employee's personnel file noting the performance problem, the substance of the warning, and the employee's response. Documentation of oral warnings could be in list format. One consultant suggests that managers keep a "critical incidents" diary in which both particularly good and particularly bad conduct or performance by employees is documented.(17) Such a diary need not be kept in an employee's personnel file, but may be maintained by the manager in his or her own files.
Many employers also use more formal "written warnings" for more severe or repeat violations. Written warnings are appropriate for performance or conduct problems that are significant enough for the manager and the employee to have a separate meeting to discuss them. Documentation of written warnings should include a description of the problem, a plan of action, consequences of failure, and an opportunity for employee comments. The appropriate content of such documentation is discussed in more detail at Part III, below. Ideally, though by no means in every case, written warnings follow oral warnings, so that the documentation of a punctuality problem would include several short memos or entries in a "critical incidents" diary documenting oral warnings, and then a more formal written warning describing the problem (including the prior oral warnings), a plan of action (don't be late anymore), consequences of failure (suspension without pay, for example), and a signed acknowledgment and opportunity to add comments for the employee.
3. Dangers of Over-documenting.
This discussion of the importance of documentation and the types of documentation available may suggest that more documentation is better. To the contrary, more is not always better; consistency is the most important documentation practice. Although fewer employers have a problem with over-documenting performance problems, human resources managers should be aware of some legitimate concerns.
A manager who documents everything may be perceived as harassing an employee through micro-management. While micro-management is not against the law, an outsider looking at the employment relationship is more likely to conclude that the organization is not a nice place to work and therefore may view the employer's case less favorably. Of greater concern is where a manager has over-documented one employee's performance, but has provided relatively little documentation regarding other employees. Obviously, problem employees will have more documented performance problems, by definition, but managers should avoid documenting insignificant incidents for one employee that are not documented for other employees. Otherwise, the employee will argue that the constant documentation is actually proof that the employer treated the employee less favorably than other employees, and will probably argue that the different treatment is attributable to his or her race, gender, age, disability, or the like.
False or misleading information is never appropriate in any employee's personnel file. Not only is such conduct unethical, but it is also likely to come back to punish the employer severely. In a lawsuit, the plaintiff/employee will be permitted wide latitude in conducting "discovery" and will be allowed to view most of your organization's documentation relating to employees and depose any witness who might have relevant information. It is therefore likely that any deception will be discovered by a competent plaintiff's lawyer, and could result in an adverse judgment (even if the adverse employment action was justified) and/or punitive damages for conduct in bad faith. Moreover, employees frequently make claims of defamation in employment-related lawsuits. Although such claims rarely have merit, false statements in an employee's personnel file could give rise to additional tort liability in addition to the underlying employment issues.
Employee personnel files are also not the place for employer confessions about mistakes by the employer. Occasionally, an employer recognizes that it has made some error in dealing with an employee, such as overwitholding for benefits, improperly classifying an employee for wage and hour purposes, or incorrectly accruing an employee's vacation entitlement. In such situations, employers should obviously do whatever is possible to rectify the mistake. Employers increase the risk of liability, however, by providing commentary on the mistakes, such as a memo in a personnel file or payroll file to the effect that "We have underpaid Employee X because of improper wage and hour classification."
C. After Employment.
The documentation process is not over when an employee has been terminated. Managers should consider drafting a memorandum to file detailing the discipline process through the termination itself. This is a good opportunity for the employer to put the relevant events down on paper while recollection is still fresh, particularly if the events have not been documented elsewhere. While not as persuasive as contemporaneous documentation post-termination summary of the discipline process can be useful in responding to an EEOC Charge of Discrimination or later lawsuit.
Post-termination documentation also provides a human resources benefit because it gives an opportunity for the organization to assess what went wrong in the employment relationship and what went wrong, if anything, with the discipline process.
In many cases, a former employee's unemployment compensation application and related documents will also become a part of the employee's personnel file. Whether the employer chooses to dispute the employee's entitlement to unemployment compensation benefits or not, the ex-employee's application for such benefits may provide useful information that may be used as evidence in later proceedings. For example, the New Mexico Department of Labor asks the following questions of unemployment compensation claimants::
What reason did your employer give for letting you go?
If you were fired, describe what incidents/events caused you to be fired?
Do you agree with the reason for being fired? If no, explain.
Had you been warned about this? If yes, when?
If you quit, explain why?
Did you attempt to resolve this with your employer? If yes, when and how?
New Mexico Department of Labor, Claimant's Statement Form. The former employee's responses to these questions may not tell the employer anything. But because it is possible that the employee will make inconsistent statements in the unemployment compensation process that can be used in future proceedings by the employer.(18)
II. WHY DOCUMENTATION IS IMPORTANT .
Accurate documentation of performance problems are absolutely necessary to justify decisions regarding discipline or discharge. In virtually every employment lawsuit, the legitimacy of the employer's decision to discipline will be at issue. For example, the existence of performance problems may be at issue in both types of wrongful discharge under New Mexico law. Employees may argue that they were wrongfully discharged in violation of public policy.(19) In most cases, an employer will respond that in fact the employee was terminated for performance problems, and will want to be able to rely on specific documentation of such problems. Similarly, employees may argue that they were wrongfully discharged in violation of an express or implied contract not to terminate except for good cause.(20) In response, employers will frequently argue that no such contract existed (highlighting the importance of the pre-employment documentation discussed above), but also that good cause for termination existed, which will rely heavily on documentation of performance problems.
Virtually the same issue arises in almost all discrimination lawsuits, in which the "burden-shifting" analysis of McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973), is used. Under this analysis, the plaintiff has the initial burden to show a "prima facie" case of discrimination; that is, that the plaintiff is a member of a protected class, was either qualified for or satisfactorily performing a position, was discharged (or not hired), and that the position remained open.(21) If the plaintiff can make a prima facie case, the burden shifts to the employer to show a legitimate nondiscriminatory reason for the adverse employment action. Finally, if the employer makes such a showing, the burden shifts back to the plaintiff to show that the employer's proffered reason is a "pretext" for discrimination.
Appropriate documentation is important at several points during this process. If the employee's performance is poor enough and the employer's documentation is good enough, the employer may be able to show that the employee was not even qualified for the position at issue. More frequently, performance documentation is important to back up the employer's legitimate, nondiscriminatory reasons for termination. If the employee was terminated for lack of punctuality or failure to meet required sales quotas, an employer's case is strengthened immeasurably if there is documentation of those performance problems in an employee's personnel file.
III. ELEMENTS OF APPROPRIATE PERFORMANCE-RELATED
DOCUMENTATION.
This paper has discussed what documentation is important and why it is important. This section discusses how to create such documentation. The performance-related documentation retained by your organization should include the elements listed below in some form, regardless of whether the documentation is a written warning or performance evaluation.
1. Clearly define the deficiency or problem. Where possible, refer to a specific situation or course of conduct(22). Rather than citing an employee's lack of attention to detail generally, point out that the employee's budget report has been incomplete for each of the preceding weeks.
HUMAN RESOURCES EFFECT: Specificity focuses attention on specific conduct by the employee, rather than on the personality or attitude of the employee, and is therefore less likely to be perceived as an attack.
LEGAL EFFECT: Specificity clearly puts an employee on notice of specific conduct which needs to be changed. Such notice is more persuasive to a court because it only requires an employee to change conduct, not personality traits, and because it demonstrates that the employee has been given a fair opportunity to succeed.(23)
2. Be constructive and try to "partner" with the employee to find a solution.(24)
HUMAN RESOURCES EFFECT: This approach makes it possible for the employee to perceive the situation as an opportunity to succeed rather than an attack with no way out. It also encourages creative problem-solving by the employee and allows management to take advantage of the employee's expertise in solving the problem.
LEGAL EFFECT: If unsuccessful, documenting this approach may demonstrate the reasonableness of the employer's request and the employee's refusal to cooperate.
3. Explain the importance of the deficiency or problem to the company, at all appropriate levels. This may also include noting that other levels of management agree that a problem exists.(25)
HUMAN RESOURCES EFFECT: Explaining the importance of the problem focuses attention on the company's needs, rather than on the personal interaction between the manager and the employee. If other levels of management concur, it may also stress the seriousness of the issue to the employee.
LEGAL EFFECT: In many different legal contexts, the fact that the deficiency or problem is important to the company will assist the employer. For example, it may demonstrate that failure to correct the problem is "good cause" for termination or that an employer's proffered reason for termination is not a pretext for discrimination.
4. Express concern and/or disappointment about the employee's performance and state the consequences of an employee's failure to improve.(26)
HUMAN RESOURCES EFFECT: Stating clear consequences before the fact may make discipline more fair from the employee's perspective. Definite consequences also express the seriousness of the situation and may provide motivation for improvement.
LEGAL EFFECT: Notice of consequences to an employee, especially in cases of discharge, may be the most important fact to a court, despite the fact that such notice is probably technically irrelevant to most employment-related causes of action. It remains important because it demonstrates consistency by the employer and fair and even-handed discipline. Notice of consequences may also be required by some employers' progressive discipline policies.
5. Offer help and assistance, but place the responsibility for improvement within clear time limits on the employee include a specific plan of action for improvement with measurable objectives, where possible.(27)
HUMAN RESOURCES EFFECT: Clear time limits help provide certainty to the organization. Within the time limit, the organization should be able to take defined steps to resolve the problem, either by improved employee performance or by disciplining the problem. Time to correct deficiencies is also helpful to an employee, who will probably not be able to change "overnight" even in the best-case scenario.(28)
LEGAL EFFECT: Employees should clearly place the responsibility on the employees, rather than on themselves, for improvement. Clear responsibility helps to combat an employee argument that performance problems stem from a failure by the employer. This type of argument is sometimes made where a warning identifies a mutual "communication" problem, or a similar situation where the employer tries to deliver a poor evaluation or warning in a nice way to the employee. Giving time for an employee to correct the problem is necessary for effective notice and is important to the perception of a fair process, both to an employee and to outside observers.
6. Summarize past discussions and note employee agreement, where possible. In particular, note reasonable expectations on time frames that have been agreed to in the past.(29)
HUMAN RESOURCES EFFECT: Summary of past discussions make both employer and employee aware of the background leading up to the current action, which may prevent the employee from viewing the current action in isolation.
LEGAL EFFECT: Summary of past discussion in performance documentation not only demonstrates an employee's past efforts at correcting performance, but also provides documentation of employer efforts that may not have been previously documented for whatever reason, such as oral or informal warnings or comments. Documenting employee agreement is important to combat possible arguments that the plan of action requested by the employer was not reasonable or known to the employee.
7. Provide employees with an opportunity to comment on the documentation. Employees do not have to agree with the evaluation, but should sign an acknowledgment that they have received or reviewed it.
HUMAN RESOURCES EFFECT: Acknowledgment of an evaluation or warning may make the documentation more "real" to an employee and the opportunity to comment may provide both employer and employee with ideas about how to solve a performance problem.
LEGAL EFFECT: Acknowledgment prevents an employee from later alleging that s/he did not know of the problem. An opportunity to comment also demonstrates that the employer wanted to know both sides of the story. Comments may also provide information to the employer and/or legal counsel regarding possible legal or factual theories that may be asserted by an employee.(30)
IV. OTHER ISSUES
A. Access to Personnel Files.
Contrary to the law in many jurisdictions, private employers in New Mexico are not required by law to provide employees with access to their own personnel file. Public employers are probably required to allow employees access to certain parts of their personnel file by virtue of the Public Records Act, § 14-2-1 NMSA 1978 (1995 Repl. Pamp.), which provides a right to inspect public employment records except letters of reference concerning employment and letters or memorandums which are matters of opinion in personnel files.(31)
Regardless of status as a public or private employer, however, virtually everything in personnel files will be discoverable through a civil lawsuit. If a lawsuit is filed, the employee may be permitted access not only to the entirety of his or her own personnel file, but also to any other notes or records that might pertain to employment, as well as the personnel files of other employees. The records of other employees are often obtained on the theory that they are needed to demonstrate that other employees who committed the same or similar infractions were treated more favorably.(32) In fact, in the course of investigating Charges of Discrimination, the EEOC itself usually asks for a copy of the personnel file of the employee who replaced (or was hired instead of) the charging party. The possibility that personnel files for many employees may be accessible highlights the need for consistency and the dangers of over-documentation noted above at Part I.B.3.
B. Electronic Mail Communications.
One form of "documentation" becoming increasingly more common is electronic mail (e-mail). The special nature of e-mail communication impacts: privacy in the workplace and the potential for use in discrimination lawsuits.
Privacy in the workplace is not a new issue - in fact, employers have been dealing with similar issues with respect to searches of employee work sites, privacy of telephone calls, and workplace surveillance for a number of years. But with each new technology, new rules for handling information become necessary. Employees may believe that they have a right to expect privacy when they send or receive an e-mail through the organization's computers. On the other hand, employers believe they have the right to monitor messages sent on their equipment. The key for employers in reducing the risk of invasion of privacy through monitoring e-mails is effective communication.
Employers need to advise employees that they have no reasonable expectation of privacy through the e-mail system. Since employers have no obligation to provide privacy in e-mail, effective communication in this respect may eliminate or reduce the risk of liability on this basis. An employer's e-mail policy should include the following elements:
1. The e-mail system is company property and to be used only for company purposes;
2, The company reserves the right to monitor the e-mail system and messages on it to ensure appropriate use;
3. Employee have no personal privacy right in any matter within the e-mail system whether sent, received or created regardless of whether a personal access code is used;
4. No message made or sent shall be of an intimidating, hostile, harassing or offensive nature. Any violation of this policy may result in termination or immediate discipline;
5. Never advise employees that the e-mail system is private or confidential;
6. Make it clear that deleted e-mail messages can still be monitored and that deletions and personal passwords do not give an employee any expectation of privacy.(33)
Policies following these guidelines reduce the risk of invasion of privacy based on electronic mail communications.
Another area in which e-mail is of concern is the creation of evidence for a plaintiff's discrimination or harassment lawsuit. Perhaps because of its origins or because of its unique nature, people seem to treat e-mail differently, and less formally, than other means of communication in the business context. The Internet is filled with e-mails intended to be humorous, but which can easily be perceived as offensive, degrading, or humiliating. Such e-mails, if tolerated by the employer, can turn into harassment or discrimination lawsuits.(34) The nature of e-mail communications makes it possible for these e-mails to arrive on your system and be passed around internally. In addition, e-mail provides the opportunity for perceived harassment or discrimination because of the ease of communication and the lack of context provided in an email.(35)
Moreover, e-mails are not effectively deleted from an employer's computer system in the vast majority of cases. "Deleting" an e-mail usually only tells the e-mail software to forget where the e-mail is stored in digital format; it does not actually erase portions of computer memory corresponding to the e-mail message. As a result, even deleted e-mails can come back to haunt an employer, and courts have permitted plaintiffs to obtain such information in employment lawsuits.(36) The possibility of liability based on inappropriate e-mail messages highlights the importance of the e-mail policies discussed above.
Endnotes1. For example, the Fair Labor Standards Act, 29 U.S.C. § 211(c), requires certain wage and hour records, the Equal Employment Opportunity Commission ("EEOC") requires certain statistical reporting (the EEO-1 report) for employers of 100 or more employees (29 C.F.R. § 1602), and the Office of Federal Contract Compliance Programs ("OFCCP") requires federal contractors to keep certain affirmative action records (41 C.F.R. § 60-1 et seq.).
2. See, e.g., Lloyd v. Georgia Gulf Corp., 961 F.2d 1190 (5th Cir. 1992) ("Where an employer's stated motivation for an adverse employment decision involves an employee's performance, but there is no supporting documentation, a jury can reasonably infer pretext.").
3. The possible terms of employment contracts is a whole different topic. Employers, however, should be aware that an express contract of employment may be drafted to provide that either party may terminate the relationship "at-will." Many contracts of employment include both "at-will" termination provisions (which require payment of a severance) and "for cause" termination provisions (which define and require an employer to show "good cause," but which do not require any severance payment). Express contracts can be a good way for employers to reduce uncertainty in the employment relationship.
4. There are differing analyses of whether an acknowledgment of receipt of an employee handbook is a good idea. Some argue that asking an employee to sign the acknowledgment makes the employee handbook seem more like a contract and therefore raises the risk that the handbook will be construed as an implied contract. I believe that an acknowledgment with a disclaimer effectively provides the advantages of documentation but minimizes the risk of implied contract. Because of the danger of an implied contract, however, I recommend that only the employee sign the acknowledgment, not a representative of the employer.
5. NMSA 1978, § 50-4-2 (1993 Repl. Pamp.).
6. Although outside the scope of this paper, a sexual harassment policy should contain a definition of sexual harassment, complaint procedures, and appropriate investigation procedures that are actually followed by the employer.
7. Burlington Industries, Inc. v. Ellerth, 524 U.S. 742 (1998); Faragher v. City of Boca Raton, 524 U.S. 775 (1998).
8. 42 U.S.C. § 12112(d)(3), (4); 29 C.F.R. § 1630.14(b)-(d); see also 29 C.F.R. § 825.500(g) (similar requirement under the Family and Medical Leave Act).
9. Membership information is frequently contained in resumes and may be retained in that form. Other membership information could suggest a protected class, irrelevant to job performance.
10. See, e.g., Vaughn v. Edel, 918 F.2d 517 (5th Cir. 1990).
11. See John Edward Davidson, Note: The Temptation of Performance Appraisal Abuse in Employment Litigation, 81 Va. L. Rev. 1605, 1610 (1995): "A growing number of psychologists and business researchers believe that performance appraisals, while theoretically reliable, are profoundly subjective in practice. They note that subjective influences in the appraising process create unintentional inaccuracy, while performance appraisals themselves are marked by vacuous imprecision."
12. Davidson, Performance Appraisal Abuse, 81 Va.L. Rev. at 1610, citing Modern Business Reports, Performance Appraisals 4 (1986); William S. Swan & Phillip Marqulies, How to do a Superior Performance Appraisal 120-121 (1991); Jonathan A. Segal, Firing without Fear, HR Magazine, June 1992, at 125-126.
13. Shawe & Rosenthan, Employment Law Deskbook, Performance Evaluations, § 5.02[1], [4] (Matthew Bender 1998); see also Conkwright v. Westinghouse Elec. Corp., 933 F.2d 231 (4th Cir. 1991).
14. Davidson, Performance Appraisal Abuse, 81 Va.L. Rev. at 1610-11, citing Nathan A. Rosen, Performance Appraisals and Staff Evaluations: A Reemerging Management Tool or a Legal Mine Field, Managing the Private Law Library, 265, 280-81 (PLI Patents, Copyrights, Trademarks, and Literary Property Course Handbook Series No. G-368, 1993); Shawe & Rosenthal, Performance Evaluations, § 5.02.
15. Id.
16. McLanahan, Checklist for Performance Documentation, at p. 1038; Deblieux, Documenting Employee Discipline, p. 3 ("The more detail that can be related to the employee without using judgmental words, the more effective the plain facts will be at providing an objective description of behavior").
17. See Documenting Employee Discipline Helps Address Performance Problems, Employment Alert for Employment Coordinator, p. 3, October 15, 1998 (summarizing presentation of Mike Deblieux); Mike Deblieux, Documenting Performance Problems and Disciplinary Actions, The Human Resources Professional, 35, 36 (November/December 1989).
18. Under the New Mexico Unemployment Compensation Law, § 51-1-55 NMSA 1978 (1998 Repl. Pamp.), "[a]ny findings of fact or law, judgment, conclusions or final order . . . shall not be conclusive or binding in any separate proceeding ...." Therefore, a finding by the Unemployment Compensation board that the employee was terminated for misconduct, for example, is not binding on the employee in a later civil lawsuit. There is no prohibition, however, on the use of the employee's statements in the unemployment compensation context as evidence in later proceedings.
19. See, e.g., Garrity v. Overland Sheepskin Co. of Taos, 121 N.M. 710, 917 P.2d 1382 (1996), where employees argued that the employer terminated their employment because they reported illegal drug use by another employee; and Shovelin v. Central New Mexico Electric Cooperative, Inc., 115 N.M. 293, 850 P.2d 996 (1993), where an employee argued that he was discharged in violation of a public policy favoring freedom of political expression.
20. See, e.g., Kestenbaum v. Pennzoil Co., 108 N.M. 20, 766 P.2d 280 (1989); Hartbarger v. Frank Paxton Co., 115 N.M. 665, 857 P.2d 776 (1993).
21. See, e.g., Cove v. Longmont United Hospital Association, 14 F.3d 526, 529 (10th Cir. 1994) (showing of satisfactory performance).
22. McLanahan, Checklist for Performance Documentation, at p. 1039; Deblieux, Documenting Employee Discipline, p. 3 ("The more detail that can be related to the employee without using judgmental words, the more effective the plain facts will be at providing an objective description of behavior").
23. Specificity also makes an evaluation more objective and avoids problems in disciplining employees based on subjective appraisals of "attitude" or "motivation." See, e.g., Rhinehart v. International Business Machines, 124 F.3d 212 (9th Cir. 1997); Warren v. Halstead Industries, 802 F.2d 746, 757-58 (4th Cir. 1986).
24. McLanahan, Checklist for Performance Documentation at 1039; Mike Deblieux, I Know I Should Fire Some of My Staff, But How Do I Do It? - Your Agenda Should Include Facts, Objectives, Solutions, and Actions, Small Business Forum 19, 22 (Winter 1994/1995).
25. McLanahan, Checklist for Performance Documentation at 1039.
26. McLanahan, Checklist for Performance Documentation at 1039; Deblieux, Documenting Employee Discipline at 3.
27. Id.
28. Shawe & Rosenthal, Performance Evaluations, § 5.02[7].
29. McLanahan, Checklist for Performance Documentation at 1039.
30. Shawe & Rosenthal, Performance Evaluations, § 5.02[5].
31. Public employees also have due process rights associated with their employment. There may be an argument that, as part of due process, employers might have to disclose the substance of evaluations or the like that form the basis for employee discipline. This topic is outside the scope of this paper and legal counsel should be consulted if additional information is needed.
32. See, e.g., Cronin v. Aetna Life Insurance Co., 46 F.3d 196 (2d Cir. 1995) (where employee used evaluations of younger employee to show age discrimination).
33. Robert B. Fitzpatrick, Technology Advances in the Information Age: Effects on Workplace Privacy Issues, Current Developments in Employment Law, vol. II, 601, 623 (ALI-ABA 1997); see also Frank C. Morris, Jr., Issues from the Electronic Workplace - E-Mail Communications: The Developing Employment Law Nightmare, Current Developments in Employment Law, vol. I, 333, 349-50 (ALI-ABA 1996).
34. See, e.g., Morris, The Developing Employment Law Nightmare at 343 (describing a $2.2 million settlement of a sexual harassment suit involving, among other things, an e-mail message entitled "25 reasons beer is better than women.").
35. Claims of discrimination or harassment through e-mail were made in the following recent cases: Sattar v. Motorola, Inc., 138 F.3d 1164 (7th Cir. 1998) (religious discrimination); Wilson-Simmons v. Lake County Sheriff's Department, 982 F.Supp. 496 (N.D. Ohio 1997) (race discrimination); and Harley v. McCoach, 928 F.Supp. 533 (E.D. Pa. 1996) (race and gender discrimination).
36. See Sattar v. Motorola, Inc., 138 F.3d 1164, 1171 (7th Cir. 1998). A recent survey of 700 employers by the Society of Human Resources Management showed that 6% of employers surveyed had been asked to produce e-mail for lawsuits while 27% had received employee complaints about inappropriate e-mail. Business Week Online, E-mail at Work: Don't Let It Get You In Trouble (April 6, 1998).