Monday, November 17, 2008

Voluntary Affirmative Discipline Programs

I, along with my fellow attorneys at Kramer Rayson, are called a good bit about how to address employee misconduct. Often, the client is reluctant to lower the boom, for one reason or another. Not too long ago, my wife brought home an article about a federal program I had not heard about (which is not surprising because very few federal employees have heard about it either).

The federal government, at the encouragement of the Merit Systems Protection Board (the board that reviews various complaints by federal employees), encourages federal agencies to have a "voluntary alternative discipline program." The idea behind it is essentially the carrot or the stick approach. Instead of attempting to "correct" poor employee behavior by progressive disciplinary action, the employer offers the employee alternatives. A last chance agreement is a form of alternative discipline. What the federal government has done is back that idea up to earlier stages of the discipline process.

So, if an employee commits an offense justifying discipline short of termination, an alternative discipline program lets management offer the employee alternative remedies or sanctions. Anyone who has practiced criminal law will recognize the difference. For example, an employee's conduct might otherwise justify a written warning and six months probation or even a week-long suspension without pay. Alternative discipline gives the employee the choice between imposition of the penalty or accepting something else. In this case, the employee could be offered a suspended sentence type of arrangement (holding off on issuing the warning and probationary period as long as the employee stays out of further trouble). In other situations, such as where discipline is contemplated due to interpersonal relation problems (the ones that fall short of physical violence), the alternative discipline that could be offered is attending EAP sessions, anger management classes or even providing xx number of hours of community service. Where the misconduct involves misuse of company resources (e.g., excessive use of computer for personal business) alternative discipline can be to reimburse the government for the time wasted and the cost of the service. Under some models, the exact nature of the alternative discipline is negotiated with the employee.

Alternative discipline is not a substitute for progressive discipline. It is best used as a supplement to existing programs. Sometimes, punitive discipline is necessary (good examples of this are for harassers or workplace violence or where termination is the only real choice (i.e., a last chance agreement would be pointless)). Its use in any bargaining environment will need to be negotiated. A key component of the alternative discipline agreement is that it is a binding contract in which the employee accepts responsibility for the employee's conduct and releases all claims relating to the alternative discipline.

A good article on the program can be found at http://www.govexec.com/dailyfed/1008/101708b1.htm. The DHHS Guide for Implementing an Alternative Discipline Program describes it without using crushing detail, gives examples of alternative discipline, the topics that should be covered in any alternative discipline agreement as well as a form or two. And if you want to read the 59 page MSPB report, it is available here.

I will offer a word or two of caution. Proper documentation is crucial so please consider having an attorney or qualified HR Professional walk you through at least the first several attempts at Alternative Discipline. There are also some subtle issues under the Fair Labor Standards Act that require finesse whenever an employee agrees to repay an employer. Rather than withholding the amount from a paycheck, the employer should structure a repayment as a completely separate transaction from the pay it makes to the employee.

Monday, November 3, 2008

Honest Beliefs and Employer Investigations

For some time now, the Sixth Circuit has waged a debate over what has become known as the "honest belief" rule in discrimination law. (It is no "rule", of course, only legal precedent based upon a number of court decisions. Lawyers tend to label precedent we "like" as a "rule," and if we don't like it, well, we call it something else.)

Last week the Sixth Circuit decided an appeal involving the "honest belief" rule. The case provides Tennessee employers with more or less a "how to" guide on getting a discrimination claim dismissed. A hospital in Kentucky fired two employees after one took home x-rays of a patient. The patient in question happened to be the grand-daughter of one of the employees. The employee other aided grandma. There was no family dispute here; the grand-daughter hurt her arm and had x-rays done where grandma worked. Mom then forgot to take the x-rays with her (to give to another doctor) so she did what we all do, she called grandma. Grandma, however, knew the hospital had to have a signed permission form from mom to release the x-rays and forged, so the hospital concluded, mom's name on the permission slip. The hospital's concluded that the employees had violated the hospital's HIPAA rules by not having written permission.

The employees tried to argue they neither violated HIPAA nor the hospital's policies. The key point, the court said, was that the employer honestly believed the employees had violated hospital policy. The "rule" in the Sixth Circuit is confused but the general consensus is that a belief is honest if the employer can point to the specific facts it relied upon to make the decision and show it reasonably relied on those facts. (Saying the reliance has to be "reasonable" sounds suspiciously like saying the decision must be "fair" as opposed to nondiscriminatory but that is a topic for another day.)

Where the hospital won this case was during its investigation. Firing grandma for taking a grand-daughter's x-rays when grandma has mom's oral permission was pretty radical. But the investigation showed grandma and her co-worker knew they had to have written permission (they were so told when grandma asked for the x-rays) and then grandma "signed" mom's name to the permission slip. The hospital also met with both employees to hear their side of the story but ultimately decided that their justifications did not excuse the misconduct. (And smart hospitals take their HIPAA obligations seriously.)

The important point here is that when taking a serious employment action, the more effort that goes into the investigation, the more chance the employer has of winning a later lawsuit. Take this case. During the investigation, the hospital was apparently confronted with differing versions of events. It interviewed the employees but rejected their assertions. The hospital thus decided what it "believed" before it implemented any decision. Even though the court said the hospital's privacy policy could have been better defined, it still tossed their claims because disagreeing with what the investigation found was not enough. The employees had to show the investigation was dishonest.

Now, in theory, even if the employer had not conducted an investigation, it shouldn't have made a difference legally. Honest beliefs, after all, are not discriminatory even if they are stupid or ill-founded. In practice, however, it is difficult to convince a judge, much less a jury, that you are being honest when you don't even try.