Talk is Cheap: Benefits of Interviewing Employees Before Taking Adverse Action

September 1, 2008

Employment litigation is extremely expensive. It diverts time away from key employees that otherwise could be spent on matters that can help contribute to your bottom line. Many claims can be discouraged or disposed of in an earlier stage of the litigation process if you are more proactive before taking adverse actions against employees. Although there are times when it’s unnecessary or inappropriate to interview an employee before taking an adverse action, in most instances, you can benefit greatly by discussing the potential for an adverse action with the employee.

Communication is everything
A lot of employment litigation arises because of failed communications. Employees feel they have been mistreated. They’re upset because they have been demoted, didn’t get a promotion or pay raise, or were fired. They file a discrimination charge or seek out an employment attorney. The lines of communication have been broken, and the battle between the employee and the employer has begun. Could this war have been prevented?

The perception that an employee has been mistreated generally arises because the employee believes, rightly or wrongly, that some other employee has been treated more favorably. A lot of employment litigation centers around the question of whether similarly situated employees have been treated the same way. Employers may have less knowledge about how other employees have been treated than the employee facing discipline or termination.

A great question to ask an employee before taking an adverse action is whether he is aware of other employees who have engaged in similar conduct. The answer may help you assess whether other employees have been treated more favorably. It also may help you explain to the employee why his situation is different and why the potential adverse action is appropriate under the circumstances.

Another area of potential communication involves letting the employee know about the potential adverse action. For example, you may say, “We are considering whether to terminate you. Is there any reason you believe that given your conduct, termination would not be appropriate?” At that point, the employee may provide previously unknown information about why termination may not be appropriate. Alternatively, he may agree that he engaged in the underlying conduct and may simply disagree about the degree of discipline.

A great final question to ask during this interactive process is simply whether there is anything else the employee wants to say or wants you to consider. Open-ended questions help get more information on the table. Also, it’s important for you to keep an open mind while investigating what action, if any, to take. Whenever possible, it’s beneficial to have two employer representatives present. One person should ask the questions, and the other should be taking detailed notes of the conversation.

Performance improvement plans
As many of you know, performance improvement plans are a great tool to get an employee to focus on problem areas. A secondary benefit is getting an employee to admit to past performance issues.

For that reason, it’s helpful if the performance improvement plan lists not only specific improvement goals but also past performance issues. The employee should sign a copy of the performance improvement plan and agree to its terms. If appropriate, he should provide input on what specific areas need to be improved and how he intends to make the improvements.

Last-chance agreements
As an alternative to a performance improvement plan, you may consider using a last-chance agreement. Like performance improvement plans, a last-chance agreement not only puts an employee on notice about performance issues but also requires him to admit to past performance issues.

The last-chance agreement should summarize past performance issues. If the employee continues to have performance issues, it will be difficult for him to deny that he was performing up to par at the time of termination.

Depending on the position in question and the nature of your business, a modest severance package may be appropriate. If you’re thinking about providing a severance package, it’s important to consider obtaining a release in exchange for severance. Because a release may trigger an employee to seek out counsel, it’s generally preferable to have completed all interviews and the investigative process before broaching the subject of severance and a potential release. You should consult with an attorney to make sure the proposed release complies with the current state of the law.

Bottom line
In most instances, the time to hear an employee’s side of the story is before you take an adverse employment action. Recollections often change over time. Documenting conversations with an employee before he is terminated helps lock in his version of events before that recollection may change. Admissions from an employee before he leaves employment may be extremely helpful if he subsequently files a charge or a lawsuit against you.

Information gleaned from the employee may affect the decisionmaking process. Also, providing an employee the opportunity to be heard may influence his decision about whether to file a discrimination charge. When in doubt, it’s valuable to discuss potential adverse actions with employment counsel before you act.

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