How Employers Can Take Disciplinary Actions Legally

Disciplinary action isn’t just a matter of company policy. Even the most well-intentioned disciplinary action can become a legal liability if mishandled. Whether it’s a verbal warning or a final termination, each step must follow established procedures and align with employment law.

A clearly written and consistently enforced disciplinary policy helps set expectations, promote fairness, and protect against liability. For legal advice in crafting disciplinary policies or handling a dispute, reach out to an employment lawyer.

Importance of Clear Disciplinary Policies

Having a clear disciplinary policy is essential. The more transparent and consistent your companies policies are, the better employees will understand and be able to comply with them. Clarity also helps managers and supervisors apply policies consistently, reducing the risk of unequal treatment or accusations of favoritism.

Policies should be readily accessible, such as in an employee handbook that is distributed to all employees. Documentation that employees receive and acknowledge strengthens legal defense against discipline-related claims.

An effective approach is to have a progressive discipline policy that proceeds in stages of severity:

1. Typically a verbal warning or written reprimand
2. Formal written warning
3. Suspension or demotion as a final warning
4. Final stage would be termination.

Many policies also have a “clean slate” rule. After a specific amount of time, such as six months or a year, any minor disciplinary actions would be closed and the employee would begin at the first stage for future infractions.

A strong disciplinary action policy will address several common situations of employee misconduct, minor and major. Include examples of what qualifies as a minor or major violation. For example, a minor issue would be tardiness or poor performance. A major issue could be theft or violence.

Steps for Legal Compliance in Disciplinary Actions

The principle of fair workplace opportunity requires employers to offer employees a chance to respond to allegations before any disciplinary action is finalized. Courts and administrative bodies emphasize that a policy should provide a hearing-like process, such as written notice of charges and face-to-face meetings to allow employees to present their side.

Under the National Labor Relations Act (NLRA), union employees have the right to request a union representative during investigatory interviews (Weingarten rights). If the request is denied and the interview continues, any resulting discipline can be deemed an unfair labor practice.

To adhere to best practices, the first step is to provide a written notification of alleged conduct and potential consequences. Then, conduct a private disciplinary meeting where all parties remain respectful and the discussion is documented. Allow the employee to explain, offer witnesses, or present evidence. Discuss possible consequences and possibly defer discipline until the employee’s response is evaluated.

Protected Classes of Employees

Federal laws prohibit adverse employment actions, including discipline, for discriminatory reasons.

Additionally, the Family and Medical Leave Act (FMLA) protects employees from being disciplined for poor performance while on leave or when returning from leave. There are exceptions to this, but the performance issues must be well-documented and demonstrate a history of poor performance outside of the leave period.

Many states afford broader protections, such as covering smaller businesses, additional protected classes (e.g., sexual orientation and gender identity), or providing leave beyond FMLA.

Avoiding Retaliation Action

Employers must be careful not to use disciplinary procedures as a form of retaliation against employees who take unwanted actions. Disciplinary actions taken soon after the employee performs a protected act are looked at with greater scrutiny.

To avoid a claim of retaliation by an employee, employers should train supervisors on the differences between lawful and retaliatory discipline. All disciplinary actions should be thoroughly documented and kept on record.

Documenting Disciplinary Actions

It’s crucial for companies to document disciplinary actions as they occur and not retroactively. Doing so in real-time establishes credibility and helps prevent claims of bias or pretext.

Records of infractions should focus on the facts of the alleged misconduct. Include precise dates and times, the nature of the issue, and who witnessed it. Record the employee’s own explanation, either in writing or summarized in minutes. This shows the employer considered their side and exercised fairness. It’s also helpful for showing that a thorough investigation was performed.

Clearly identify the specific handbook provision or rule at issue to demonstrate that employees were aware of relevant expectations. Document the corrective action taken, whether it is verbal counseling, written warning, suspension, or something else.

Before issuing discipline, supervisors should consult human resources (HR) to confirm adherence to company policies and federal/state laws. HR and employment law counsel ensure that discipline is applied consistently, that documentation reflects a nondiscriminatory rationale, and that any protected-class or accommodation issues are properly vetted.

Under federal law, personnel and employee discipline records must be retained for at least one year after separation — and longer if a charge is filed with the U.S. Equal Employment Opportunity Commission (EEOC). Medical, accommodation and FMLA records should be kept in separate, secure files to comply with federal confidentiality rules. This requires companies to have separate employee files for disciplinary records.

Performance Improvement Plans

If an employee is experiencing issues due to a lack of resources or capability, a performance improvement plan (PIP) may be a smart solution. These are typically done when there isn’t deliberate misconduct, but employee performance isn’t meeting the standard or expectations. Typical uses include low productivity, quality issues, or poor attendance. While state laws do not require the use PIPs, it can be considered good practice. A well-documented PIP can show fairness and equal treatment.

A legally defensible PIP will clearly outline the employee’s issues. Support the statements with evidence and facts. Reference any prior training, coaching, or guidance they may have been provided to the employee that is relevant to the deficiency. Establish a specific timeline and measurable goals that the employee must achieve.

There should be regularly scheduled performance reviews and check-ins during the plan’s timeline. Record the training and assistance provided during the plan. When the timeline is complete, update the plan to include the outcome. There could be an extension of the PIP or the employee demoted, reassigned, or terminated. The employee could also successfully complete the PIP and maintain their position. Document employee acknowledgment, ideally via signature, affirming receipt and understanding of the plan.

The use of PIPs needs to be applied uniformly across all employees and departments. That way, the company can reduce the risk of bias or discrimination claims. Deliver PIPs in person (or virtually), encourage clarifying questions, and explain exactly how goals are measured. Keep the plans confidential and on a “need to know” basis.

Legal Considerations for Termination

Termination should be reserved as the final disciplinary step, and only when prior steps (warnings, PIPs) haven’t resolved the issue, or when misconduct is serious enough to justify immediate dismissal. Sometimes, an employee’s behavior warrants immediate action that goes beyond correction via a supportive PIP. Violence, sexual harassment, theft, or serious violations of company rules often lead to immediate termination.

Before firing someone, review all written records in the employee’s file. Check out how similar infractions by other employees were handled and what the employee handbooks state as the consequence of such action.

Consulting an employment law attorney is also wise to ensure no labor laws will be violated. A lawyer can also review all agreements and waivers to ensure they are enforceable under both federal and state laws. Not taking the necessary steps to review the law can put the company at risk of legal issues. An employee could file a wrongful termination lawsuit or make claims of a hostile work environment.

Seek Legal Advice

Disciplinary action is a necessary part of managing workplace behavior and performance. It’s also one of the most legally sensitive areas for employers. From setting expectations in employee handbooks to documenting infractions and conducting due-process meetings, every step must be carefully executed.

Employers must also be aware of protected classes, retaliation risks, and state and federal laws that govern how and when discipline can be applied. Working with an experienced employment law attorney ensures your disciplinary policies are compliant, your documentation is defensible, and your company is protected from costly legal exposure.

Use the Super Lawyers website to find an employment lawyer who can advise on the laws influencing your disciplinary policies and actions.