How an Employee How an Employee

Becomes a Plaintiff:Becomes a Plaintiff:

A Primer on A Primer on

Corrective Action Corrective Action

for Managersfor Managers

©© Dallas G. KingsburyDallas G. Kingsbury

IntroductionThe Vital Importance of Documentation

Most employment lawsuits are created and/or Most employment lawsuits are created and/or lost because:lost because:

Managers did not properly counsel, coach or Managers did not properly counsel, coach or discipline their employees; ordiscipline their employees; or

Managers failed to properly document their Managers failed to properly document their counseling/corrective action interactions with counseling/corrective action interactions with their employees. their employees.

If nothing else, remember the three “D’s” If nothing else, remember the three “D’s” Document, Document, DocumentDocument, Document, Document

Litigation Trends1. Federal employment discrimination charges increased

14% from 2007 to 2008. 2. The average costs to litigate a single-plaintiff case is

almost $100,000.3. Plaintiffs’ class actions have increased significantly.4. Employers expect litigation growth to continue due to

economic conditions.

What’s the point? Employees are more willing to What’s the point? Employees are more willing to contest employer job actions, class actions are contest employer job actions, class actions are becoming more common and employers are becoming more common and employers are paying large sums for mistakespaying large sums for mistakes. .

Employers & Juries – Employers & Juries – Give ‘em a Fair Trial?Give ‘em a Fair Trial?

A recent survey of jurors in employment cases found the following attitudes:

59% had bad experiences with an employer.30% had been fired or laid off from a job .25% had received negative job evaluations from their

employer.68% stated that they would rule for an employee if the employee had been unfairly treated, regardless of the law.35% had a relative or close personal friend who had been laid off in a reduction in force.12% had been victims of harassment.15% had sued or filed claims against an employer.45% thought that an important function of a jury was to send

a message to a company who had done something wrong.

Why Employees SueWhy Employees SueIn a 1997 study, E. Allen Lind, a professor at Duke University, found four major factors that determined whether a terminated employee would pursue litigation:

1. Dignified and honest treatment at termination; Of those who felt that they had been treated with dignity during

termination, less than 0.4% reported filing claims Of those who said they had not received respectful treatment,

14.9% filed claims.

2. Fair treatment during employment; Of those who felt they were treated “very unfairly,” over 15%

filed claims

3. Expected winnings from filing a lawsuit; and4. Financial hardship resulting from the job loss.

Managers can control the first two, and that’s the Managers can control the first two, and that’s the focus of this presentation. focus of this presentation.

Why Should I Care?Why Should I Care?

1. Because you have a personal stake in this. • Business reasons• Personal reasons• Employee relations reasons

Business Reasons Cost of Jury Awards

A recent survey of median jury awards in employment cases during the time period 1997-2003 revealed the following verdicts where the employee/plaintiff prevailed.

Type of Case Federal State

Overall discrimination $165,000 $195,843Age $223,000 $283,000Disability $250,000 $194,000Race $137,780 $170,000Sex $150,000 $176,500

Business ReasonsLost Time and Productivity

Consider the lost time for managers, productivity and morale issues and loss of focus on the business and you’re talking about a substantial distraction from your business and hidden costs.

Reason 2 - Personal Reasons - You,

the star witness for the Defense1. Your testimony could be months or years after the job action.

Without proper documentation, your memory will not be accurate, your reasons may not be credible, and the plaintiff’s attorney will try to make you look incompetent.

2. How do you avoid this? The three “D’s”. But your documents may not be admitted into evidence unless you follow solid business principles and legal guidelines.

3. The Business Records Hearsay Rule - “Records of Regularly Conducted Activity.” Business records are only admissible if they are “made at or near the time by, or from information transmitted by, a person with knowledge, all in the course of a regularly conducted activity, as shown by the testimony of the custodian or other qualified witness, unless the course of information or other circumstances indicate a lack of trustworthiness.”

Simply put – records of coaching, counseling or Simply put – records of coaching, counseling or corrective action will not be admitted unless it can corrective action will not be admitted unless it can be established that they were be established that they were contemporaneous contemporaneous and and maintained in the regular course of business.maintained in the regular course of business.

Reason 3 - What’s In It For YouReason 3 - What’s In It For YouGood Employee RelationsGood Employee Relations

Finally, coaching, counseling and corrective action, properly done, lead to better motivated employees, reduced absenteeism, lower turnover, and more productive operations.

CORRECTIVE ACTION

• Managers should follow consistent steps when addressing employee conduct and/or performance issues.

• Appropriate actions depend on specific situations - everyone should be treated fairly and consistently.

• The following “sample Steps” ensure that the “employees know where they stand” and provide necessary documentation.

CORRECTIVE ACTIONSAMPLE STEPS

• Step 1-Informal Verbal Warning (documented and shared with employee)– Purpose.– Current situation.– Expectations for change (including measurable outcomes and specific

timeframes).• Step 2-Formal Written Warning (must be shared with associate)

– Memo format containing situation, expectations, consequences, and Manager/employee signatures.

Remember, verbal warnings should be written, and written warnings should be spoken.

• Step 3 - Final Written Warning:– Based on circumstances, the situation might require more than three

steps.• Contact your assigned HR rep for assistance and/or approval for

termination.

CORRECTIVE ACTION• In some cases, it may be necessary to suspend an

employee pending an investigation. In other cases, immediate termination is appropriate.

• However, some states require payment of wages immediately upon termination, so immediate termination may not be advisable in many circumstances.

• Check with your assigned HR rep before making any termination decisions.

• The ultimate goal is to provide the coaching The ultimate goal is to provide the coaching necessary to make employees successful. But necessary to make employees successful. But this is sometimes unsuccessful, so proper this is sometimes unsuccessful, so proper documentation becomes essentialdocumentation becomes essential..

How Do I Document Corrective Action

• FOSA+ System– FACTS to define problem– OBJECTIVES that explain to employee how to

resolve problem– SOLUTIONS that can help employee reach

objective– ACTIONS you will take if problem not

corrected– + PLUS your overall efforts to help employee

succeed

FOSA+ Step 1: FACTS

• Include the 5 “Ws”:

– What happened– When it happened– Where it happened– Who was involved– Why it happened

Facts not Conclusions

• NOT– “He was drunk.”

– “She was sick again.”

– “He has a bad attitude.”

• BUT– “Two people reported that his breath smelled of

bourbon.”

– “She was out sick Thursday, Friday, and again today.”

– “He said, `Stick it in your ear.’”

FOSA Step 2: OBJECTIVES

• Tell employee what he/she must do to resolve problems you identified with FACTS

• Set performance objectives– Specific behavior to follow OR– Specific result to achieve

Attendance I n the f uture, I expect you to be at work and ready to begin at 8:00 a.m. each day you are scheduled to work.

Quota I expect you to sell 25 units each month to meet your quota

Honesty When I ask you f or inf ormation about company business, I expect you to tell me what you know at the time I ask.

Deadlines I n the f uture, I expect you to complete your monthly status report in time to be typed, proof read, and corrected by the fi rst of each month.

FOSA+ Step 3: SOLUTIONS

• Offer solutions that will help employee meet objectives you have established in prior step

• Ask employee to suggest their own solutions (then they own the solution too)

• Supports your credibility that you wanted employee to succeed

Coaching I will meet with you weekly to discuss your customers’ needs to see if you can increase your sales.

Training I suggest you take the Dale Carnegie leadership course at our expense.

Resource Person

I f you have questions about how to install the basic system, you may ask your team leader to review the instructions with you.

Resource Materials

I ’m sending you another copy of the instruction manual f or this system so that you can review and study it at home.

FOSA+ Step 4: ACTION

• Action you intend to take if employee does not meet OBJECTIVES– Specific action you are taking now– Action you will take if employee’s behavior

falls short of objectives• You MUST inform employee when job is You MUST inform employee when job is

in jeopardyin jeopardy

“Litmus” Test

• Would a third party (spelled “JUROR”!) who knew none of the parties or facts think from your documentation that you had acted fairly?

Apply the “Fairness Test”

CONCLUSIONCONCLUSION

• Remember, you should never act alone.

• Use your peers, supervisors or corporate HR/Legal