10-Step employment-at-will review of your employment practices

Each year thousands of employers are sued by employees for wrongful discharge. In order to avoid such lawsuits, employers should carefully review their personnel policies and practices.

Specifically, companies should review carefully:

• employee handbooks or any official communication to employees;

• performance appraisal forms and procedures;

• hiring and termination procedures;

• human resources development; and

• consistency of personnel policies and practices.

Also, you should adopt policies and practices that can serve to prevent such liability. The following 10 tips can assist you in this process:

1. Use language carefully. When communicating with employees, employers should use:

• short, clear sentences, rather than technical or legal jargon or lists and outlines;

• a friendly responsive tone rather than impersonal, legalistic language;

• personal pronouns rather than impersonal words, to enable readers to clearly see how a policy applies to them;

• ordinary language that communicates what the employer really means, rather than ambiguous language that may allow a supervisor to make an inappropriate decision or an employee to misunderstand;

• action-oriented words in the form of active verbs.

2. Include specific policy statements. Policies should be written and should include the following:

• procedures or steps used to apply or implement the policy;

• management responsibilities or what managers are expected to do and methods for monitoring or controlling how the policy will be implemented or enforced;

• consequences or statements indicating what will occur if the policy is violated and positive statements related to the value of following the policy;

• references or summaries of specific legal documents if legislation or common law is involved in the application of the policy or is the reason for the policy.

It is a good idea for a policy to be:

• broad, leaving room for discretion and interpretation and allowing its application to be flexible;

• comprehensive, covering all aspects of a relevant personnel activity;

• inviolate, allowing no exceptions unless, under special circumstances, the policy itself does not apply;

• authoritative, identifying responsibilities and both positive and negative consequences of decisions made within the context of the policy;

• reasonable and applicable, so that managers can ensure that their decisions are fair and consistent and in accord with the company's goals.

3. Use at-will statements on application forms. Many employers are now requiring job applicants to sign statements on employment application forms that include the assertion that the applicant, if hired, will be subject to employment-at-will. Employers are doing this to prove that:

• their intent in hiring was under an employment-at-will relationship;

• the employee, by signing the application, knew the nature of the employment relationship before hire and accepted that relationship when hired.

In your statement, state that no manager or officer has the authority to modify the at-will term of employment, or specify by title who has the authority to modify the at-will term of employment.

4. Add at-will statement to employee handbooks. Insert the following disclaimers in clear language and in a prominent place in company handbooks and other related documents:

• a statement that informs employees that the company retains the right to change policy and the employee handbook at its discretion (identify by title who in the corporation can change or interpret policy);

• a disclaimer to the effect that the employee handbook is not a contract;

• a statement that any employee may be terminated by the employer at any time for any reason;

• the at-will statement from the employment application.

Each employee should sign a statement that can be a tear out slip in the employee handbook, verifying that they have:

• received and read the handbook;

• understood its contents;

• agreed their employment is at-will and can be terminated by either themselves or the employer at any time.

The signed at-will statement, should be stored in the employee's personnel file. You also should review the rest of the handbook for language that conflicts with the at-will statement.

5. Conduct valid performance appraisals. In order to decrease an employer's vulnerability to a wrongful discharge claim based on the company's performance appraisal system, the company should:

• inform employees of any decline in the quantity or quality of their performance;

• advise managers to discuss each and every incident affecting performance with an employee when the incident occurs, and maintain a record of these actions as documentation for future performance appraisals;

• once an employee's deficiencies have been observed, provide the employee with an opportunity to improve performance;

• develop clear, objective criteria for evaluating performance;

• train managers in the administration of the performance appraisal system, and instruct them in how to conduct a performance evaluation interview;

• require employees to sign a statement that they have been informed of the results of their performance appraisal;

• always review the last several appraisals prior to termination.

6. Focus on recruitment and selection practices. The organization should consider:

• including in all employment offers a statement that the employee may voluntarily terminate his or her employment with proper notice, and that the employee may be terminated by the employer at any time for any reason;

• deleting from any recruitment brochures or applicant correspondence any promises of long-term employment, fast-track careers, a fixed term of employment or permanent employment;

• discouraging supervisors from promising long-term employment, job security, permanent positions or termination only for just cause.

7. Focus on employee discipline. Courts frequently use just cause standards when reviewing wrongful discharge claims. Therefore, employers should ensure that their disciplinary actions generally relate to the following guidelines:

• employees are informed of work rules and the consequences of violating them;

• the employer makes a reasonable effort to investigate incidents before administering discipline;

• incidents are investigated fairly and objectively;

• all rules are administered evenhandedly and without discrimination;

• the degree of discipline administered is related to the seriousness of the offense, the employee's prior record and other mitigating circumstances.

8. Review resignations. Review voluntary resignations for instances in which an employee states that the company has not adequately supported the employee in performing the functions of his or her job. Pay particular attention to situations where the employee infers that the employee's working conditions were so difficult and intolerable that the employee had no other choice but to resign. In the event a resignation alleges this type of situation:

• investigate each of these situations thoroughly to determine if there is any basis in fact;

• determine if the employee has taken medical leave due to work related matters, such as stress, prior to the resignation;

• look for independent collaborative evidence;

• compare the employee's allegations to exception criteria of at-will status that can arise from public policy or failure to act in good faith.

9. Review terminations. The organization may want to consider doing the following:

• have someone other than the terminating employee's supervisor conduct an independent review of the facts of the termination before the final termination decision;

• monitor termination procedures to make sure that supervisors consistently apply personnel policies and procedures over time;

• when employees resign voluntarily, ask them to sign a separation agreement. In the agreement, the employee should agree not to sue the company and release it from all future liability arising from the resignation in exchange for some benefit like a letter of general reference or severance pay;

• have a detailed written explanation of the reasons why the employee was terminated;

• respond to any questions raised by the employee about the termination accurately and expeditiously, giving him all the reasons for the action.

10. Promote supervisor's development. In order to develop a positive human resources management program while at the same time avoiding exposure to wrongful discharge claims, companies should consider doing the following:

• inform supervisors about those personnel policies and practices affected by employment-at-will issues;

• advise supervisors regarding what they should tell applicants in employment interviews or correspondence;

• point out to supervisors those statements that they are not authorized to make;

• make sure supervisors understand that statements they make may be legally binding on the company;

• inform supervisors of legal changes regarding employment-at-will issues.