MODULE 3 BACKGROUND - EMPLOYMENT-AT-WILL AND PROGRESSIVE DISCIPLINE

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The Traditional Progressive Discipline Paradigm

By Paul Falcone

This article is excerpted from Chapter 1 of 101 Sample Write-Ups for Documenting Employee Performance Problems: A Guide to Progressive

Discipline & Termination, Third Edition (https://store.shrm.org/101-sample-write-ups-for-documenting-employee-perf-1.html) (Amacom/SHRM,

2017), written by Paul Falcone. This is the second in a three-part series on progressive discipline and its legal considerations.

The traditional paradigm is used to prove, via documentation, that you made a good-faith e�ort to lead the employee down the right path.

Your a�rmative e�orts to improve your employee's performance must have been willfully rebu�ed despite repeated warnings so that you,

as a reasonable employer, were left with no choice other than termination. Keep in mind that you may be required to demonstrate that the

discipline was meted out in a fair manner that was consistent with your own policies so that any worker could reasonably expect to be

terminated under similar circumstances.

Repeated Violations Trigger Disciplinary Progression

But how exactly does progressive discipline progress? Usually the impetus that moves the pro cess from one stage to the next is a repeated

violation of the same rule or type of rule (for example, repeated tardiness or unexcused absence). In essence, there must be a link or nexus

between events in order to move to the next stage. Without an interrelationship between events, you will end up with a series of

independent verbal warnings rather than a progres sion from a verbal to a written to a �nal written warning.

For example, an employee who violates your organization's attendance policy and one week later fails to meet a deadline may receive two

separate verbal warnings for independent and unrelated transgressions. On the other hand, an employee who violates your company's

attendance policy and then develops a tardiness problem will indeed progress through the discipline system because both transgressions

are intrinsically connected: Unauthorized absence and tardiness both have a negative e�ect on the work �ow of your o�ce.

It is by no means uncommon to have an employee on separate paths of discipline. A ship ping clerk who is already on �nal written warning

for insubordination shouldn't necessarily be terminated if a tardiness problem begins. Tardiness, an event unrelated to insubordina tion,

would not typically be used as the proverbial "straw that breaks the camel's back" to justify termination. That's because there is no nexus or

interrelationship between the events: Tardiness interferes with work �ow, whereas insubordination relates to individual behavior and

conduct—a separate business issue altogether.

On the other hand, because insubordination is a conduct infraction, any other behavior or conduct infractions during the active period of

the write-up may indeed result in dismissal. For example, if this shipping clerk on �nal written warning for insubordination suddenly engages

in antagonistic behavior toward his coworkers, insults a customer, or refuses to fol low a supervisor's instructions, then a discharge

determination could be warranted (barring any signi�cant mitigating circumstances, of course).

Summary Discharges

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With all this emphasis on progressive discipline, whatever happened to your right to �re someone on the spot? Well, it's still there: You can

�re anyone at any time. However, you may have di�culty defending your actions in a wrongful termination claim. If you've denied an

employee due process, the technical merits of your arguments may be largely ignored.

On the other hand, you don't have to o�er progressive discipline to someone who breaks the law. Progressive discipline is an employee

bene�t. If an employee engages in illegal activity or other egregious conduct (such as gross insubordination, gross negligence, theft,

embezzlement, time card fraud, or drug use on company premises), you've probably got a clear shot at a quick and defensible termination

(known as a summary dismissal).

To be on the safe side, though, speak with a labor attorney to fully explore the rami�ca tions of such a dismissal. It's always worth getting a

professional legal opinion to ensure that you haven't overlooked anything. If you need to buy yourself some extra time, you can always

place the worker on investigatory leave with pay pending further review and a �nal decision.

Employment at Will

Of course, when it comes to summarily discharging employees, that will also be in�uenced by the employment status of your workers. If

they are hired at will, you will have more lee way in determining whether to retain or terminate. Employment-at-will status is employment that

does not provide an employee with job security, since the person can be �red on a moment's notice with or without cause. The

employment-at-will relationship is created when an employee agrees to work for an employer for an unspeci�ed period of time. It holds that

an employer can terminate a worker at any time for any legitimate reason or for no reason at all. Likewise, the employee may leave the

organization at any time, with or without notice.

On the other hand, the rule is littered with statutory exceptions. That means that you cannot terminate workers if the discharge infringes

upon a protected right or goes against public policy. Speci�cally, there are �ve exceptions to the employment-at-will doctrine:

�. Employment contracts. If a contract exists, you must adhere to its terms and con ditions, including notice requirements, or else you

breach the contract. When an employment contract covers a �xed period of time (for example, three years) and is silent concerning

grounds for terminating the contract, courts in many states have held that employers have an implied obligation to discharge only

for just cause.

�. Statutory considerations. Dismissals are illegal if they are based on age, sex, national origin, religion, union membership, or any

other category established in Title VH of the 1964 Civil Rights Act or other legislation. Discrimination is con sequently one of the

exceptions to the employment-at-will rule, and charges may arise any time you �re someone in a protected class.

�. Public policy exceptions. You cannot terminate an employee for �ling a worker's compensation claim, for whistle-blowing, for

engaging in group activities that protest unsafe work conditions, or for refusing to commit an unlawful act on the employer's behalf.

�. Implied covenants of good faith and fair dealing. You are prohibited from discharg ing long-term employees just before they are due

to receive anticipated �nancial bene�ts.

�. Implied contract exceptions. You may be bound by promises published in your employee handbook or oral promises made at the

hiring interview requiring just cause to terminate.

Because of these limitations, you must attempt to protect the at-will employment status at all costs.

Employment-at-will language is typically found at only three critical junctures in the employer-employee relationship: (1) the employment

application, (2) the o�er letter, and (3) the employee handbook (please see "Establishing an Employment-at-Will Policy" below). The at-will

language certainly belongs there, but numerous court cases have found that if a long-term employee hasn't seen an application or o�er

letter since the date of hire ten or twenty years ago, then she may not necessarily be subject to an at-will employment relationship. Courts

have held that it has simply been too long since that message was communicated to the employee. Therefore, communicating your

company's employment-at-will policy during the disciplinary process helps protect that policy.

1

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Establishing an Employment-at-Will Policy

If you are in an employment-at-will state, you can establish an

employment-at-will policy in your employee handbook (or, if

you don't have an employee handbook, in a separate memo

included in the employee's new hire packet) by expressly

stating: Violation of company policies and rules may warrant

disciplinary action. Forms of discipline that the company may

elect to use include verbal corrections, written warnings, �nal

written warnings, and/or suspensions. The sys tem is not

formal, and the company may, at its sole and absolute

discretion, deviate from any order of progressive disciplinary

actions and utilize whatever form of discipline is deemed

appropriate under the circumstances, up to and including

immediate termination of employment. The company's

discipline policy in no way limits or alters the at-will

employment relationship.

Does employment at will �y in the face of progressive discipline and due process? After all, if you have to take employees through a series

of disciplinary actions before you can ter minate for cause, does that naturally erode your ability to terminate at whim? Well, the two

concepts are not mutually exclusive; rather, they are among the complicated, and oftentimes contradictory, issues that make up

employment law today. By making the at-will nature of employment known expressly (i.e., in writing), you should be better able to

successfully argue that an employee did not have a reasonable expectation that discharge could be only for cause.

The Employment-at-Will A�rmative Defense

Remember that your defense attorney will initially attempt to gain a

summary judgment—an immediate dismissal—of a wrongful

termination claim by employing the at-will defense at the hearing

stage. If your defense attorney successfully argues that the ex-

worker was employed at-will, understood that she was at-will, and

had not had the at-will relationship abrogated during her tenure with

your company by any manager's actions or verbal assur ances, then

the case could simply be dismissed during the hearing (i.e., before

the trial stage). The reasons for the termination need not be

considered.

However, discrimination is an exception to employment at will. If a

plainti� attorney can show that you discriminated against the

employee, retaliated against her for �ling a workers' compensation

claim, or verbally implied (in front of witnesses) that people "don't get

�red around here unless they deserve it," then the employment-at-

will a�rmative defense may not be sustained.

As a result, if a summary dismissal is not initially granted at the hearing stage by the court or arbitrator, then you will have to justify your

decision to terminate at trial by proving that you had just cause. And the way that most employers successfully prove that they had just

cause is by presenting the court or the arbitrator with documentation in the form of progres sive discipline.

Although much is said about the erosion of the employment-at-will doctrine, "Were you hired at-will?" is still one of the �rst questions a

plainti�'s attorney will ask your ex-em ployee when deciding whether to take on the case. The attorney knows that if the employee was

hired at will, chances of obtaining damages from the company—including damages for wrongful discharge and breach of contract—may be

dramatically reduced (assuming the at-will defense is a�rmed by the court). This statement is borne out by employment law case history

over the past eighty years. At-will employment came about in the early 1930s. Since then, employees who were dissatis�ed with the

reasons given for their dismissal have tried to sue their employers, claiming that the companies had to have good cause to �re them. And

for many years, courts typically supported employers because of the at-will employment relationship.

That all ended in the early 1980s when a California court held that although the law, as it was written, created a presumption of an at-will

employment relationship, that presump tion could be challenged by evidence that both parties entered into an employment contract that

allowed only termination for cause. Speci�cally, in the 1980 Tameny vs. Atlantic Rich�eld Co. case, then California Chief Justice Rose Bird

ruled that a long-term employee couldn't be �red under the employment-at-will a�rmative defense for refusing to engage in unlawful

activities on the company's behalf (in this case, price �xing). Once the employment-at-will veil was pierced, the public policy exception was

born, and tort law became a prominent part of the legal landscape.

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What was also signi�cant in the California decision was the court's further ruling that the contract could be implied (rather than written or

oral) based on a company's past practices. In addition, if language in employee handbooks seemed to suggest that employees could be

�red only after some form of due process was provided, then the company was barred from exercising its right to terminate at will. As a

result, rea�rming your at-will employment relationship during the disciplinary process gives you the chance to strengthen your defense

against a plainti�'s attorney who alleges that an implied promise existed requiring for cause justi�cation.

Implied contract legal theory presents a serious threat to your right to �re an employee on a moment's notice with or without cause. If you

inadvertently transform the employment-at-will relationship into an employment with termination for cause only relationship, you will

unnecessarily expose your organization to increased liability by eliminating your company's �rst line of defense: the summary judgment.

Without a crystal ball, you can't know in advance what kind of a spin a plainti�'s attor ney will place on a case. Therefore, you also can't

know if your company will be successful in asserting the employment-at-will a�rmative defense (and thereby winning a summary judgment

at the hearing stage). Therefore, you should always assume that you'll have to do both: (1) Protect the employment at will relationship via

your company documentation, but (2) always be prepared to defend your decision to terminate on the merits of the employee's

performance (i.e., by showing cause in the form of progressive discipline). In other words, regardless of the employment-at-will relationship,

always be prepared to demonstrate just cause to justify a dismissal via documentation. That's fair to your employees and healthy for your

company.

Relying on employment at will as a sole defense in terminating workers provides far too many employers with a false sense of security. To

avoid falling into that trap, you should protect the employment-at-will relationship with your workers by documenting its existence whenever

possible. However, you shouldn't rely on it to make wrongful termination charges magically disappear.

NOTES:

1 Most states, but not all, allow at-will employment relationships. For example, the state of Montana has enacted a statute that

completely abrogates employment at will. As a result, Montana employers are prohibited from dis charging employees without good cause.

2 In other words, for those employees whose rights are not protected by a labor agreement, employment con tract, or legal statute (i.e.,

regarding age, race, or gender), their protection against wrongful discharge is minimal.

This is the second in a three-part series on progressive discipline and its legal considerations. The �rst installment was Part 1: The Elements

of Due Process (www.shrm.org/ResourcesAndTools/hr-topics/employee-relations/pages/the-elements-of-due-process.aspx). The next

installment will be Part 3: The Legal Implications of Probationary Periods.

Please visit the SHRMStore (http://bit.ly/2gcrjcd) to order a copy of 101 Sample Write-Ups for Documenting Employee Performance

Problems: A Guide to Progressive Discipline & Termination, Third Edition (https://store.shrm.org/101-sample-write-ups-for-documenting-

employee-perf-1.html), by Paul Falcone.

Paul Falcone (www.PaulFalconeHR.com (http://www.paulfalconehr.com/)) is an HR trainer, speaker and executive coach and has held senior

HR roles with Paramount Pictures, Nickelodeon and Time Warner. His 2016 book, 75 Ways for Managers to Hire, Develop, and Keep Great

Employees (Amacom), focuses on aligning front-line leadership teams and on key employee retention. A longtime contributor to HR

Magazine, he's also the author of a number of SHRM best-sellers, including 96 Great Interview Questions to Ask Before You Hire, 101 Tough

Conversations to Have with Employees and 2600 Phrases for E�ective Performance Reviews.

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