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The Art of Discipline

The Art of Discipline

By: Dan Cohen  – 4/29/14

One of the most important functions of managing people is managing their expectations. This is certainly true when it comes to the disciplinary process. To do it right, you must keep a few things in mind. First and foremost, you must understand the goals of the disciplinary process. The primary goal should be “corrective.” Every employee hired is an investment, and you want to maximize the return on your investment. This means you must train your employees so they are hitting on all cylinders as quickly as possible. Performance based discipline should, therefore, be designed to reinforce your/their expectations and help the employee succeed. Hopefully, the employee learns from the mistake and does not make it again. With performance based discipline, repetitive mistakes should be met with progressively more severe discipline. This approach tends to work best with attendance, proficiencies, efficiencies, following proper procedures and the like. Success here saves you time, money and energy for the simple reason you will not have to go back to square one and hire and train someone else.

With infractions that go to the employee’s integrity and character, you should still be thinking “correction,” but your actions should also be designed to protect the business. This means you must be preparing for the distinct possibility that this employee will have to be shown the door. Employees who lack integrity, who have character flaws and those who are not team players are the employees most likely to sue. They tend to look at employee relations as “us” against “you.” How you document these circumstances will, therefore, be critical. Moreover, since employees facing discharge have a nasty habit of whistleblowing or otherwise seeking protection against discharge, if and when the prospect of discharge should be mentioned is a strategic matter.

The third category of misconduct is what we refer to as the “cardinal sins” of the workplace: fighting, substance abuse, theft, dishonesty, harassment, etc. When faced with misconduct of this variety, you likely will and should be less forgiving and move toward discharge much more quickly and often immediately. Progressive discipline is not the rule when “cardinal sins” are involved.

Over the years, we have heard (only sporadically) some employers question the wisdom of committing things to writing. Personally, I cannot think of a single reason why you would pass on the opportunity to create what should be the best piece of evidence should your disciplinary decision be challenged. Just off the top of my head, I can come up with several good reasons to document your decision:

  • It dissuades plaintiff’s counsel from taking the case—there is no better way of stopping plaintiff’s counsel dead in his/her tracks than a well-documented personnel file. Indeed, well-written documents take away many common arguments like, it wasn’t committed to writing because the “real” reason was illegal or it never happened.
  • It shows fairness—jurors like to see that you worked with the employee and communicated your expectations, giving the employee an opportunity to meet those expectations.
  • It shows the jury you stand behind your decision—documentation forces you to take ownership in the decision. Without documentation, you risk jurors thinking you lack conviction or there was not a good enough reason to commit it to writing.
  • It is easier than telling the story for the first time under oath and cross examination—It is far easier telling the story that has already been told in documents prepared prior to the heat of the battle. The documents become your script.
  • People remember things they see better than things they are told—We are a visual species, and we remember things better if we see them rather than just hear about them. What better way to make a lasting impression on the jury than to have a real “work of art” blown up and front and center throughout the trial?

There is a definite protocol for developing good disciplinary documents. Of course, the starting point is the publication of comprehensive work rules. Every employee should receive a copy and acknowledge their receipt. A handbook is probably the best place to publicize the rules of the shop. Timely and consistent enforcement is next. The easiest way to do this is to be a historian. Communicate with others to find out if something has happened before and how it was handled. Know the employee’s disciplinary record before creating the write-up. And, don’t make it personal.

Now that you are convinced that your decision should be documented and you understand what needs to happen before putting pen to paper, you are ready to prepare the write-up. Every write-up should identify the work rule violated and the facts that support the write-up. Past discipline is worth mentioning as well. A good write-up is signed by the employee. One way to achieve this is by giving the employee an opportunity to agree or disagree with the write-up. Give the employee a chance to explain his/her disagreement with a space for a signature. If the employee refuses, the write-up should note the employee’s refusal. Finally, a statement that further infractions will result in additional discipline, up to and including discharge, is key and gives you flexibility for future occurrences.

If you are writing a discharge letter, you still want to reference the facts that establish the violation. State your legitimate, non-discriminatory business reason clearly. Unless addressing one of those cardinal sins, you want to make it a point to mention the employee’s prior discipline and your efforts to reform the employee’s behavior. This shows fairness. When applicable, highlight the burdens placed on the team/co-workers, business operations and customers. Finally, don’t lose sight of your audience. You are not just writing for your employee, but for his/her attorney, the court and a jury.

The Other “N-Word”

The Other “N-Word”

By:  Bill Pilchak – 4/24/14

          Beware of words known by their first initial! The “N-Word.” The “C-Word.” Responsible people cannot use such words without being tainted with infamy. Ask Mark Fuhrman, Michael Richards or Paula Deen. Trials have been lost, high profile careers have ended and business empires have crashed because of the words. Even a top-performing racist or sexist can be shown the door for even a single transgression. So, except for professional rappers, professional people don’t even whisper the words.

          Recently resolved cases at P&C have reminded us of another dangerous “N-word:” “Non-Union.” While there are permissible usages, “non-union” is a loaded term that can lead to nearly automatic liability before the NLRB, just as using the other words can spell doom in an EEO setting. Knowing when the “non-union” term will get you in trouble is trickier than knowing who can use the original N-word and when.

          Under the National Labor Relations Act, virtually all non-supervisory employees have the right to form unions and bargain collectively. Employees who seek to do so have “protected status.” Refusing to hire or firing union adherents will trigger enforcement actions by the Board.

          With rare exception, employers resist unions, not only because of the financial burdens of increasing employee compensation, but because of the loss of flexibility and control over operations. Yet, one must be careful when speaking of efforts to remain union-free. There is a fine line between permissible statements and those that reflect “anti-union animus.” Depending on syntax and context, “non-union” can be innocuous and problem-free, such as: “Acme has a non-union workforce.”

          Switch the context slightly, and the employer has problems: “Acme is a non-union company” can be argued to mean that Acme means that it will always be a non-union company, and in that context, the remark will be argued to display anti-union animus. Ideally, any such statement should respect workers’ rights and steer clear of predicting the future: “We don’t have a union” or “nobody has ever sought to organize our workforce” express the sentiment without suggesting animus.

          Similarly, stating that “Acme has long been non-union is permissible, because that is a historical fact, not an expression of sentiment or conviction about the future.

          Expressing the thought that management hopes the company will remain union free, takes a little more finesse. “We treat our workforce well, so they don’t seek to organize” or “We don’t think it’s in the interest of our employees to have a union” is better than declaring the company is (now and in the future will be) “Non-Union.”

          As should be obvious, if a company finds it necessary to speak on these subjects, its time to contact labor counsel for a road-map as to what can/cannot be said.

          An additional problem arises from bids and contracts. Especially regarding a job where the work is presently being done under a collective bargaining agreement, requesting or providing “non-union” pricing or specifying the deal will be “non-union” suggests the current union workers will not be hired for open jobs or the incoming workforce will not be permitted to organize. Failing to offer jobs to displaced union workers will be considered evidence of anti-union animus by the NLRB

          One cannot leave this topic without reminding readers that incoming federal service contractors who have won contracts must offer employment to individuals currently supplying the service on behalf of an outgoing contractor before offering employment to anybody else.   The federal regulations implementing the Service Contract Act, 48 CFR 22.1008-2, also provide that if a collective bargaining agreement was in place, “a successor contractor must pay wages and fringe benefits (including accrued wages and benefits and prospective increases) to service employees at least equal to those agreed upon by a predecessor contractor” if the substantially same services are to be performed in the same locality.

          So, those bidding for work subject to the Service Contract Act will never displace a previous unionized provider by submitting a lower bid premised on reduced wages or benefits.

          Okay, but doesn’t that mean that the federal government can’t rid itself of a service-provider infested with poor performers who are backed by the union? And therein lays a column for the future.

You Can Have Your Cake And Eat It Too With A Jury Trial Waiver

You Can Have Your Cake And Eat It Too With A Jury Trial Waiver

By:  Dan Cohen – 4/22/14

         With the adoption of the Michigan Revised Uniform Arbitration Act in 2013 (“RUUA”), Michigan employers once again must ask themselves whether they are better off arbitrating employee claims than litigating them. The RUAA is a modernized version of Michigan’s 50 year old arbitration statute. For example, it recognizes and authorizes e-records, provides for fundamental fairness by restricting waivers and modifications of certain provisions, allows arbitrators to grant interim relief (i.e. injunctions) to preserve the status quo, allocates who determines procedural and substantive arbitrability, and authorizes pre-hearing discovery.

          But does the RUAA now make the case for using arbitration as an alternative to litigation? In my humble opinion, I think not: for several reasons. First, by authorizing discovery, complex arbitrations will likely become increasingly expensive. Although it is not likely to become as expensive as most litigated matters, the days of low-cost arbitrations are probably behind us. Moreover, because discovery can be quite time-consuming, it is probably inaccurate to describe arbitration as a quick, inexpensive option to litigation. Second, arbitrators have a vested interest in allowing disputes to proceed to a hearing. Indeed, they make less money if they grant summary dismissal of the case. Judges, on the other hand, do not make money off your case and must manage their dockets. Thus, plaintiffs know that in arbitration almost every case goes to trial, and settlement opportunities tend to be few and far between.

          Next, arbitrators often like to come up with compromises so that both sides might become repeat customers. For example, an arbitrator might reinstate a plaintiff but without back pay. Of course, this often creates an untenable situation and exposes the employer to a retaliation claim. Finally, there is virtually no opportunity to appeal an adverse arbitration award even if the arbitrator fails to follow on point authority or makes an obvious mistake during the hearing. So, by and large, you are stuck with an unfavorable decision in arbitration.

          The primary advantage of arbitration remains the avoidance of trial by jury and the prospect of a runaway jury verdict. If you have been through a jury trial, you understand then that as the employer, you simply do not want to be there. Juries have preconceived notions of fairness that often interfere with the application of the law to the facts. This might be reason enough to seek out measures that avoid jury trials. Arbitration is one such method. However, as I have indicated, arbitration has its own drawbacks. A lesser known option is a “waiver of trial by jury” in favor of a bench trial before a judge. In Michigan, jury waivers entered into voluntarily are enforceable. They can be very effective because you can still obtain summary dismissal before trial since the judge, unlike the arbitrator, has no skin in the game. And, for those judges who would otherwise be inclined to send a close case to the jury, they in essence would be sending the case to themselves. Of course, you retain the full right to appeal the judge’s decision and you avoid inflated jury verdicts. You’ve now got your cake and you can actually eat it.

Don’t Expect Background Checkers to Have Your Back

By:  Bill Pilchak – 4/17/14

I have long felt that Consumer Reporting Agencies (“CRAs”) pay scant attention to their customers’ obligations under the Fair Credit Reporting Act (“FCRA”).  Recently, I took a closer look at practices within the industry, and my casual observation has become a firm belief.  Although CRA’s are required to obtain certification that their employer-customers are FCRA compliant before providing a report, not only do they often fail to do so, but some offer misleading information to customers about compliance.  Accordingly, don’t rely upon the vendor providing background checks to guide you through your FCRA obligations.  Some have as much expertise in the area as the infamous Detective Frank Drebin.

As most HR people know, the FCRA extends far beyond credit matters, and includes criminal background checks, reference checks and driving record reviews performed by third parties.  FCRA compliance is currently critical because: 1) these days, those with criminal convictions are flexing their legal muscle when denied employment, prompted by the EEOC’s recent efforts on their behalf; and 2) you only get one chance to comply with the  FCRA.  You can’t “un-ring” that bell after a violation has occurred.

The FCRA requires employers to engage in specific actions at several steps. As noted, Congress intended that CRAs communicate with employers regarding those obligations, because a CRA is supposed to obtain certification of compliance.  How easy it would be to comply with that requirement by presenting the employer’s pre-and-post-report obligations and requesting that the employer confirm it has taken or will take those actions.  That is not usually the case.

Let’s review what the FCRA requires of employers and use an online CRA, pseudo-named “Guardman,” as an example of how one can be led astray.  At Guardman’s website, virtually anyone can obtain background checks on anyone else for $20.  Checks on friends, neighbors, etc are not subject to the FCRA.   Employers are instructed to insert a date of birth, which apparently (and mysteriously somehow) informs Guardman that the request is from an employer and subject to the FCRA.  One can click on that DOB instruction for more information, but the pop-up does not review the employer’s obligations or obtain certification that the employer has followed the steps.  Rather, it touts how Guardman’s program allows for the correction of data, while competitors’ systems do not.

Ideally, Guardman would tell employers that the FCRA requires them to provide notification to the employee that a consumer report may be used and that the employer must obtain the employee’s authorization to obtain a report in a “stand-alone” document before obtaining a report.  Courts have held that where the notification is on a separate page but paginated in sequence with the application and other pre-hire documents, it is not “stand-alone.”  Likewise, courts have held that notification followed by language releasing FCRA claims and a signature line is not “stand-alone.”  Obviously, a disclaimer buried within provisions of an employment application does not suffice.  However, clicking on Guardman’s “employee background check release form” icon produces an authorization as part of an employee application, with the signature simultaneously authorizing a report and releasing Guardman for any claims against it.  Accordingly, if an employer relies upon Guardman for guidance, it will surely violate the law.

When employers then elect to obtain a report, they must provide notice to the employee that a background check or other report has been requested within three days of making the request.  This requirement appears nowhere in the CRA’s materials.

If a report contains information of concern, the employer must provide the employee with: a pre-adverse action letter explaining that action might be taken on the basis of the information; a copy of the report; and a copy of “A Summary of Your Rights under the Fair Credit Reporting Act,” a document prepared by the Federal Trade Commission.  The employer should provide the employee with a chance to dispute the information, though that is not an absolute requirement.  If the employer goes through with the adverse action, it must provide an “adverse action” letter containing:

  • The name, address, phone number of the CRA supplying the report;
  • A statement that the CRA did not make the decision to take adverse action and cannot give specific reasons for the adverse action; and
  • A notice of the individual’s right to dispute the accuracy of any information supplied by the CRA, and his or her right to an additional free consumer report from the agency upon request in sixty days.

Guardman’s site does have an icon entitled “background check resource center,” where one can find another icon entitled legal requirements.  They provide notification of the post-termination requirements.  However, nothing compels an employer to review the legal requirements stated there.  Certainly, no part of the process provides certification of compliance.

In an ideal world, a company whose only business entails providing criminal background checks would guide customers on how to lawfully use their service, given the provision of the law requiring certification of compliance.  But it shouldn’t surprise any employer when folks do the bare minimum required and fail to go that extra mile – or even yard.


Are You Fed Up with Poor Attendance?

Are You Fed Up with Poor Attendance?

By:  Dan Cohen – 4/15/14

Do you want the good news first or the bad news?  Since I like to end on a positive note, I will start with the bad news.  A study in 2008 showed that 1 in 10 Kindergarten and First Graders missed the equivalent of 30 days of school during the school year.  Of course, the catch is twofold: (1) kids tend to reflect the attitudes and often the values of their parents, or to put it more bluntly: “the apple doesn’t fall far from the tree;” and (2) this is our workforce of tomorrow.  If young kids are missing so much school, my guess is their parents aren’t receiving many perfect attendance bonuses at work.  Of course, I am probably preaching to the choir on this since so many businesses experience attendance problems.

Now for the good news: It’s not too late to address lackluster attendance or to change your corporate culture to ready yourself for tomorrow’s workforce.  While there are a variety of ways to address and improve attendance, my clients and many other businesses have had success by implementing paid time off (PTO) policies, perfect attendance bonuses and by tightening up their reporting and FMLA guidelines.  In extreme cases, you might want to use “truant officers.”

PTO Policies come in many sizes and shapes and are very effective for curbing an attendance problem.  The premise is that eligible employees have an allotment or bank of paid days off during the measuring period, typically a calendar or fiscal year.  Most PTO policies combine vacation, personal and sick days.  Thus, an employee might have three weeks of paid time off during the year to be used for his/her vacation, personal and sick time.  Then, whenever, the employee is absent, the paid time must be used.  An employee, who likes to call off work for most any reason or for no good reason, now must make a decision whether he or she wants to forfeit paid vacation time to cover the absence. 

Perfect Attendance Bonuses are now back in play for businesses as a result of the revised FMLA regulations.  Some of you will recall that the original FMLA regulations provided that time off for FMLA-qualifying reasons could not be used to disqualify an employee from a perfect attendance award.  This really limited the usefulness of perfect attendance bonuses because employees could offer up an excuse that triggered FMLA protection and exempted them from disqualification.  With the 2008 revisions to the FMLA regulations, employers can deny perfect attendance bonuses for even FMLA-qualifying absences as long as they also deny perfect attendance bonuses for all other absences too. 29 CFR §825.215(c).     

Reporting Requirements and FMLA Rules can make a huge difference in your overall attendance.  The 2008 revisions to the FMLA regulations tightened up the employee’s notice obligations by requiring them to follow their employer’s usual call-off rules, including rules that require reporting of absences prior to the start of the shift, or even two hours before the start of the shift, or that require calling a specific call off number. If an employee fails to follow the call-off rules, FMLA can be delayed or even denied in the case of an unforeseeable leave. 29 CFR §825.303(c).  Employers also have the right to force employees to use their available paid time off at the front end of their FMLA-qualifying leave.  Of course, this won’t matter to the employee who truly needs FMLA, but might deter an employee from using the FMLA as an excuse for taking time off work with job security.

The introduction dangles the extreme prospect of utilizing a “truant officer.”  In principle, a company could create such a position, if it steered around a few statutes and common law concepts.  However, there is enough material to consider, that we will devote a separate blog to the subject.  So, keep your eyes on this space.