A costly and time-consuming lawsuit is every employer's worst nightmare. While it may seem like employees hold all the cards in this situation, there are things you can do to protect your interests.
The best way to keep yourself out of court is to document every employee disciplinary action you take as well as any employee conflicts.
Aside from lawsuits, which cost lots of money in a single swoop, paying unemployment can pick you apart over the long haul, according to Eric Bleak, director of employee education for Circle Four Farms.
Laws on paying unemployment benefits to former employees vary from state to state. In general, if an employee has been fired for a "good cause," like consistent tardiness or absenteeism, you won't have to pay unemployment, but if the employee has been let go without cause you will, says Kristin Oliver, attorney with Gable & Gotwals in Tulsa, Okla.
Developing a documentation system not only removes some legal liability from you as an employer, it can make for more satisfied employees.
"It goes a long way in improving employee relations," says Bleak. "When everyone knows the parameters and the boundaries then everyone feels comfortable. When you leave question marks, problems can spring up."
Sarah Fogleman, Kansas State University agricultural economist agrees. "If you don't have a system in place it can seem like you're picking on someone," she notes, "but if you've always had a policy of what's acceptable and what is not, it becomes more cut and dried."
While you may understand that a documentation procedure is worthwhile, there are still a lot of questions about how to implement procedures on the farm.
Bleak says when Circle Four was looking to implement a policy he attended several human resource seminars to get more information on the topic. Other sources to consult can include fellow producers, attorneys and employee management consultants.
Fogleman stresses that it's wise to consult with your attorney to draw up an outline for policies and procedures to implement employee documentation. After all, you might as well bring the legal expertise into the process early so that you aren't forced to call upon it later.
Making the investment to have an attorney draft a documentation policy doesn't come cheap, Oliver estimates attorney fees could run $1,000 to $2,000, plus training and other miscellaneous fees. "The amount you could save by having a policy like this is immeasurable," says Oliver. "Attorney fees alone on a wrongful termination case will likely run $30,000 to $50,000."
Any costs incurred to implement a documentation program are a small price to pay, compared to the alternative, says Bleak. For an operation the size of Circle Four, legal costs and unemployment payments could easily reach into the millions of dollars without such a program.
While introducing a written policy for employee documentation and termination creates freedom from litigation it also binds you to that policy.
"If you write down a policy in your employee handbook it can be a double-edged sword," says Oliver. "You expose yourself to the threat of someone using it against you, if you don't follow it."
To reduce this risk Oliver says, the most important thing to document repeatedly is that your employees are "at-will employees". This ensures that there is no implied contract and that the employer can terminate the agreement at any time for any reason or for no reason. Fogleman adds that somewhere in the handbook you need a clause for immediate termination if an employee endangers himself or others.
But, an employer's responsibilities don't end with the introduction of a new policy into the employee handbook. "Even the best policy is worthless without employees knowing what it means," says Fogleman. "You have to have proof that your employees understood the policies."
While it's always difficult to prove what another individual understands, Fogleman recommends that you go over all policies with employees personally. Then have each person sign or initial the page in the handbook that refers to policies relating to conflicts and dismissals.
Determining which production operations need a documentation system is not a clear-cut decision. Federal law says that any company with 15 or more employees is subject to age and disability discrimination laws. However, Oliver points out that having a documentation policy is a good idea for any size business.
"Everyone should have some kind of documentation procedure, whether they have one part-time employee or 20 full-time employees, one lawsuit can destroy your farm either way," says Fogleman. "Plus, documenting employee problems and successes makes you a better manager."
"If you have even two employees, you should at least sit down with them and explain how you would handle conflict and discipline problems," says Bleak.
Ultimately, whether you want to implement a documentation system is up to you. But remember without one, the legal risks are great. The rewards can not only save you money and headaches in the long run, but also lead to more efficient, productive and satisfied employees. n
Here's What to Include
When it comes to disciplining employees, consistency is the key in staying out of legal trouble and avoiding allegations of favoritism.
Having a written policy and a standard form is the first step. This allows management and employees to review issues, remain informed and it clarifies questions.
Gregory Encina Billikopf, employee management specialist with the University of California, offers the following suggestions when setting up any disciplinary document:
- Specifically state what the employee has done wrong and why his/her behavior must change.
- Tell the employee what he/she needs to do to improve or correct the error.
- Advise the employee that the discipline will be documented and placed in his/her personnel file.
- Inform the employee what the future consequences will be if he/she does not improve his/her performance.
For More Information
Getting the process started is one of the hardest aspects of implementing any change, and developing an employee documentation system is no different.
Sarah Fogleman, Kansas State University agricultural economist, says that you can contact your local or state small business administra-tion or an attorney for assistance in creating a program. You also can call Fogleman for more information at (316) 431-1530.