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.

“Uniformity in discipline is key,” says Gary Costales, an employment law attorney in Miami, Florida. “If you treat everybody the same under your disciplinary policies, that’s a great way to undermine any claim of retaliation.”

For legal advice on drafting disciplinary policies or handling a dispute, contact an employment lawyer.

Importance of Clear Disciplinary Policies

Having a clear disciplinary policy is essential. The more transparent and consistent your company’s policies are, the better employees will understand and 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. Termination

Many policies also have a “clean slate” rule. After a set period, such as six months or a year, minor disciplinary actions are 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, minor issues include tardiness or poor performance. Major issues could be theft or violence.

Steps for Legal Compliance in Disciplinary Actions

The principle of fair workplace opportunity requires employers to give employees a chance to respond to allegations before finalizing any disciplinary action. 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 you deny the request and the interview continues, any resulting discipline can be deemed an unfair labor practice.

To follow best practices, first provide written notice of the alleged conduct and potential consequences. Then, hold 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 consider deferring 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. Exceptions exist, 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 (for example, sexual orientation and gender identity), or providing leave beyond FMLA.

Avoiding Retaliation Action

Employers must avoid using disciplinary procedures to retaliate against employees who take unwanted actions. Disciplinary actions taken soon after an employee engages in a protected act are scrutinized more closely.

To avoid an employee retaliation claim, 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, 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 the employee’s side and used fairness. It also helps show that you conducted a thorough investigation.

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 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 struggling due to a lack of resources or capability, a performance improvement plan (PIP) may be a smart solution.

PIPs are typically used when there isn’t deliberate misconduct, but employee performance doesn’t meet standards or expectations. Typical uses include low productivity, quality issues, or poor attendance. While state laws do not require the use of 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 relevant to the deficiency. Establish a specific timeline and measurable goals that the employee must achieve.

Include regularly scheduled performance reviews and check-ins throughout the PIP’s timeline. Record the training and assistance provided during the plan. When the timeline ends, update the plan to include the outcome.

The PIP may be extended, or the employee may be 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.

Apply PIPs uniformly across all employees and departments. This helps 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

Reserve termination 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 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. Review 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 are 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 claim a hostile work environment.

Seek Legal Advice

Disciplinary action is necessary for 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.