• DISCIPLINE AND DISCHARGE GUIDELINES

• RECENT SUPREME COURT DECISIONS MAKE THE DEVELOPMENT AND USE OF ANTI-HARASSMENT POLICIES ESSENTIAL
• TITLE VII'S BATTLE OF THE DAYS
• PUNITIVE DAMAGES LIMITED UNDER THE TENNESSEE HUMAN RIGHTS ACT

DISCIPLINE AND DISCHARGE GUIDELINES

Duke University Professor E. Allan Lind researched the most common reasons an employee sues his former employer. Of course, these include wanting to make quick money to cure financial hardship. But what impels employees to sue most frequently is perceived lack of "fairness"--how they were treated when they were employed, and how they were treated when they got fired.

Experience shows that when a case gets to court, a jury is more concerned about fairness than they are about the facts or law. An employer may have the facts and law in its favor, but if an employer's treatment of its employee "does not seem fair," the employer will lose. How can an employer make sure that its actions are perceived by an outsider to be "fair"?

Each employer should prepare and follow discipline review procedures. These may be prepared by committee (which could include the human resources director, legal counsel, and others), but they should be administered by one person. Only in this manner can the employer be confident that one employee's discipline is neither worse nor better than another's. The following are important issues to be considered.

1. Determine the policy or rule that has been violated by the conduct. Was the rule communicated adequately to the employee? Is there documentary evidence (such as a handbook receipt) to show that the employee received notice? If the employer cannot prove that the employee was given notice in some manner, the resulting discipline may seem "unfair."
2. Examine the employee's discipline record. What does the employee's discipline record show? How many other violations have occurred? Does the employer have a policy that "washes out" certain violations, so that they may not be used against the employee?
3. Examine the employee's tenure with the employer. How long has the employee worked for the employer? If an employee has worked for the employer for a long time (for example, 15 years) and never has been disciplined before, the employer may have a hard time selling the proposition that the employee should be discharged, unless the offense truly was serious.
4. Examine the employee's evaluation record. Does the employer conduct regular evaluations? How was the employee rated by his supervisor? Experience shows that supervisors frequently give "good" ratings on evaluations, either because they don't want to make someone unhappy or because they don't take the time to make a proper evaluation. These will come back to haunt the employer when the same supervisor gives discipline to the employee during the rating period.
5. Include the employee in the investigation. Frequently, an employer has made up its mind that an employee "has to go" or be disciplined. Thus, when it calls in the employee, the employer already has papers drafted. Bad idea! Looks unfair. It is a better practice to fully include the affected employee in the investigation, and have the employee respond fully to the charges. Then, and only then, should the employer make up and present the paperwork documenting the discipline or separation.
6. Don't take too long to bring closure. Have a goal of bringing closure to the case within three business days. The investigation needs to progress rapidly. Don't wait for the employee or off-shift witnesses to come back to work. Call them in. Make supervisors or witnesses stay after work hours if necessary. Pay them if necessary. Experience shows that a jury or court looks suspiciously at discipline given long after the event. Too much time lets other things intervene as the potential cause for the discipline, such as the employee's union or protected concerted activity.
7. Determine whether the employee is a minority member. Does the employer plan to treat him/her worse, better, or the same as it treats whites, men, employees under-40, healthy (non-disabled), etc.? Has the discipline been given disproportionately to members of a minority?
8. Determine whether the discipline recommended by the supervisor is the same as that given employees under other supervisors. Experience shows that Supervisor A may let employees "get away" with what Supervisor B punishes. Creative counsel will use this against the employer. This problem not only shows the need for supervisory training, it alerts the employer to the claim of unfairness in the discipline case.
9. Determine whether the supervisor has shown favoritism. A supervisor may unconsciously discipline some employees but let others get away with a similar offense. This may be the result of cronyism, which is essentially "legal", and has nothing to do with race, sex, disability, etc. Creative counsel will discover this disparity in discipline and use it to support the theory that the employer treats a minority member unfairly. Although the "real" discrimination may not be unlawful, a jury or judge may interpret it otherwise.
10. Obtain written statement from witnesses. Never assume that an employee or supervisory witness will remain faithful. When a co-worker makes a complaint against another that may result in discipline, get a signed statement. Tell the employee that you cannot go forward without it. Any supervisor should write out a statement as well--he/she will forget what happened.
11. Talk only to those who need to know. Don't involve in the investigation any one other than a witness or direct-report supervisor. After the investigation, advise only those who need to know of the employer's decision. Thus, advise the employee, his supervisor, and human resources, but no one else. There may be exceptions, but this is a good rule.
12. State all the reasons for discipline/discharge. If the employer is compelled to state in writing its reasons for discipline/discharge, or if it is the employer's practice to do so, make sure that all the reasons are stated. In some cases, an employer may want to be kind and state that an employee was "laid off" because a position was eliminated, when really the employee was fired because he simply was a jerk! It is better to state the truth than to dissimulate. If later on the employer refers to "other reasons," the jury or judge may infer that the real reason for the action was unlawful.

Observation. Any discipline/discharge case involves managing risks. The foregoing issues, if properly addressed, will result in better risk management, and therefore less exposure in court.

Mark M. Lawson

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RECENT SUPREME COURT DECISIONS MAKE THE DEVELOPMENT AND USE OF ANTI-HARASSMENT POLICIES ESSENTIAL

Two recent Supreme Court decisions make the creation and dissemination of a comprehensive sexual harassment policy more important than ever. In Burlington Industries, Inc. v. Ellerth and Faragher v. City of Boca Raton, the Supreme Court expanded the basis for employer liability as a result of the harassing conduct of supervisors. Luckily for employers though, the Supreme Court also spelled out a way that employers can avoid liability for this often hard to detect harassment.

Under earlier law, the courts considered whether the sex harassment claim was one of quid pro quo harassment, or one that involved "hostile work environment." Harassment was considered quid pro quo when an employee's terms and conditions of employment were changed in retaliation for the spurned advances of a supervisor. An employer could be held vicariously liable for such harassment even if they never knew, nor should have known, that the harassment was occurring. On the other hand, an employer might not be held vicariously liable for harassment creating a "hostile work environment," unless the employer, after notice, had not taken steps to prevent and correct the harassment. Ellerth and Faragher created new law.

In those cases, the Supreme Court said that an employer can be vicariously liable for a supervisor's conduct even if the employer knew nothing about the supervisor's actions. If the harassment culminates in a "tangible employment action," such as discharge, demotion, or undesirable reassignment, the employer is liable and has no defense.

On the other hand, if the supervisor takes no adverse employment action against the employee but creates a "hostile environment," the employer is still presumed to be vicariously liable, but may escape liability if it can prove that it has effectively promulgated and administered an anti-harassment policy. To effectively utilize this defense, the burden of proof is on the employer to prove (a) that it exercised reasonable care to prevent and correct promptly any sexually harassing behavior, and (b) that the plaintiff employee unreasonably failed to take advantage of any preventive or corrective opportunities provided by the employer or to avoid harm otherwise. While proof that an employer had promulgated an anti-harassment policy with complaint procedure is not necessary in every instance as a matter of law, the need for a stated policy suitable to the employment circumstances may appropriately be addressed in any case when litigating the first element of the defense. And while proof that an employee failed to fulfill the corresponding obligation of reasonable care to avoid harm is not limited to showing any unreasonable failure to use any complaint procedure provided by the employer, a demonstration of such failure will normally suffice to satisfy the employer's burden under the second element of the defense.

So what should an employer do? At a minimum, draft a clear, reasonably user friendly, comprehensive anti-harassment policy; indoctrinate all employees, and document their receipt of the policy; train employees periodically about sexual harassment--how to prevent and report it, and document their training; and provide sexual harassment prevention training to all supervisors and managers on an annual basis, and review company policies and practices with the supervisors to ensure uniform implementation. An employer should respond to each harassment complaint with a thorough, complete, and well-documented investigation, followed by a prompt and reasonable response.

Utilization of these measures, and documentation of their implementation, may greatly increase success in defending any harassment claim.

Eric W. Reecher

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TITLE VII'S BATTLE OF THE DAYS

In Virginia a battle has been waging on whether a claimant must file his charge under Title VII within 180 days or the more generous 300 days. And the winner is . . . well, it depends on which Fourth Circuit panel one asks. In June, one panel, in an unreported case, found the answer to be 180 days. While in September, a second panel, declared the answer to be 300 days.

The crux of the issue is whether the Virginia Human Rights Counsel is a deferral agency. A deferral agency is defined as a state agency that has the authority to either: (1) grant relief from an unlawful employment practice; (2) seek relief from an unlawful employment practice; or (3) institute criminal proceedings with respect to the practice. 29 C.F.R. § 1601.70. On this issue, the EEOC answered yes, the Virginia Human Rights Counsel is a deferral agency; while the Western District of Virginia answered no.

This conflict of opinions led the question to the Fourth Circuit. In June, it looked like the Fourth Circuit Court of Appeals agreed with the Western District of Virginia and found the Counsel was not a deferral agency. Childress v. Appalachian Power Company, 1998 WL 417278 (4th Cir.). However, this decision was not reported; therefore, it did not carry the full force of binding law.

While from the Childress decision it appeared that the answer from the Fourth Circuit on this issue was a claimant must file within 180 days; however, in September a second panel readdressed the issue. This time the Fourth Circuit found that the Virginia Human Rights Counsel was a deferral agency. This panel determined that the Counsel had the power to "seek relief" under Title VII, because it could investigate a claim, attempt conciliation, and seek relief through other state agencies. Tinsley v. First Union National Bank, 1998 WL 557166 (4th Cir. 1998). Thus, while it first appeared that a claimant had only 180 days to file, it now appears a claimant shall have the more generous time period of 300 days to file his charge with the EEOC.

Kristine Kring

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PUNITIVE DAMAGES LIMITED UNDER THE TENNESSEE HUMAN RIGHTS ACT

ISSUE

Whether punitive damages are allowed under the Tennessee Human Rights Act ("THRA")?

SUPREME COURT HOLDING

Punitive damages are available under the THRA only for claims involving discriminatory housing practices and malicious harassment. Carver v. Citizens Utility Co. d/b/a Citizens Telecommunications Co. of Tennessee, 954 S.W.2d 34 (1997).

BACKGROUND

Plaintiffs claimed age discrimination by employer Defendant which violated the THRA. Plaintiffs then claimed entitlement to punitive damages under THRA. Before start of trial, the district court certified the question to the Tennessee Supreme Court on whether punitive damages were allowed under the THRA.

THE DECISION

The Court decided this question purely as a matter of statutory construction. The relative statute involved was Tennessee Code Annotated § 4-21-101 to 905 (THRA), and more specifically, sections 4-21-306 & 311. Section 4-21-306(8) seemed to implicitly allow punitive damages in employment discrimination cases under the "necessary and proper" language. While section 4-21-311(c) explicitly allowed punitive damages in cases involving discriminatory housing practices.

The Court construing the statute as a whole ("in para materia") decided that by explicitly providing for punitive damages in one section that it thereby prohibits punitive damages in a catch-all remedy provision. Thus, punitive damages are allowed for claims involving discriminatory housing practices, but not in employment discrimination cases. In addition to the discriminatory housing exception, section 4-21-701 states that "malicious harassment" is unlawful under THRA. This section specifically allows for punitive damages, thereby, carving out a second exception which explicitly allows for punitive damages under the THRA.

RESULT

This decision is a victory for Tennessee employers, because under THRA act punitive damages can only be awarded in the two specific instances of discriminatory housing practices and malicious harassment. So while an employer may still be liable for "humiliation and embarrassment" suffered by a plaintiff, it cannot be hit twice by the addition of punitive damages in an employment discrimination case. However an employer may now be faced with an increase in malicious harassment charges under section 4-21-701, in plaintiffs' attempts to receive punitive damages.

Kristine Kring