Watch what you write
Document, document, document" is a common piece of advice you will get from many employment pundits and labor attorneys who conduct performance management workshops and legal updates.
The only part of the message that often gets short shrift is the key fact that if something is worth documenting, it's probably worth sharing with the employee at that particular time. Otherwise, as a manager, you will end up creating a diary of substandard performance issues that serves neither as a training tool nor as documentation that could later be used to justify a dismissal and protect your company from a wrongful termination charge.
If communicating and sharing documentation regarding performance with employees is an essential responsibility of management, then you have to be sure that what you're writing--whether positive or negative--won't come back to haunt you in the future.
However, documenting performance has some uncommon pitfalls that you need to be aware of. In addition, you need to know how to keep documents from being legally discoverable in the pre-litigation process in the first place.
Attorney-Client Privilege
First, remember that written documents that are not properly designated as "attorney-client privileged" may be subpoenaed by plaintiff attorneys looking for evidence against your company. From that standpoint, performance documentation can be seen as a long-term liability to the corporation. E-mails in particular present a treasure trove of opportunities to litigators since electronic records can never really be destroyed. It's probably easiest to think of the "e" in e-mail as "evidence." In fact, many defense attorneys will argue that e-mail has become to civil law what DNA has become to criminal law.
Marking a document "attorney-client privileged" isn't enough to protect it from discovery. Although there are a number of legal issues that make a document privileged, there are a few basic rules that will help you toward that goal. "For a document to be privileged, you need the active involvement of an attorney who is asked to provide an opinion and/or analyze the employer's intended course of action," says Ann Kotlarski, employment litigation partner at Seyfarth Shaw LLC in Los Angeles. "In essence, you have to separate the factual investigation from the legal analysis. When attorneys are asked to provide a legal analysis, there's a greater chance that a court will determine that the document is privileged, which simply means that the document is not admissible as evidence in a courtroom."
Furthermore, the document should have a limited audience, and only those nonattorneys with an absolute need to know should be included in the distribution list. "After all, if the document is available to a large number of individuals within your company, then a court may rule that it's common enough to be shared with a jury," according to Kotlarski.
A key way to ensure that you're protecting a confidential hard copy document or e-mail is to write "Privileged and confidential: Attorney-client protected communication" at the top of the written page or in the subject line of the e-mail. "Address the memo to either your in-house attorney or to your outside counsel and write, 'Please give me your legal analysis in terms of the appropriate course of action that we should consider at this point' at the conclusion of the document," advises Kotlarski. "Although investigatory findings and the factual analysis are discoverable, the legal analysis itself may be protected if you prepare your documentation the right way."
Remember, though, that what's considered confidential or privileged is subject to debate, and ultimately a judge will decide what will be admissible as evidence in court. When in doubt, check with qualified employment counsel. It goes without saying that such documentation must be kept outside of a worker's personnel file.
Performance Appraisal Snafus
Performance reviews represent another lurking danger for unsuspecting managers: The path of least resistance is avoidance, and rather than addressing performance problems honestly and directly, many managers have been known to avoid confrontation by overinflating grades. In an attempt to justify their actions, they often give substandard performers lower scores than the rest of the staff, even if the overall score is still a passing grade. For example, with a grading system showing 5 is superior, 3 meets expectations, and 1 fails to meet expectations, supervisors may give 3s to substandard performers when all other staff members receive 5s.
Those supervisors too often rationalize, "Well, the individual received a lower score than everyone else on the staff, so he must realize that he's not performing up to par." Similarly, unsuspecting managers give substandard scores in particular performance areas on the review, while still giving an overall acceptable score at the end of the appraisal.
There are two problems with this rationale. First, understand that performance reviews are not relative; they're absolute. If the company deems a 3 an acceptable score, then the employee hears that she's met expectations. In a court of law, that individual may state that she realized that she scored lower than everyone else in the department or that she had no idea what scores the others received. In either case, her lawyer's argument will simply state that she didn't realize that her job was in jeopardy because her overall score for that entire year was acceptable.
Likewise, most performance appraisal forms have nine or 10 individual categories in addition to the overall score at the end. Substandard scores in individual categories will certainly help your case if you're forced to defend a termination, but in and of themselves, they are not an absolute defense. Instead, a failing overall score at the end of the appraisal form must be documented to reflect unacceptable performance for the entire review period.
Here's a simple litmus test to follow when doling out overall scores in the performance review process: If you have any remote hesitations about an individual's ability to make it in your department or company in the upcoming year because of subpar job performance, then you should grade the individual as "not meeting expectations" in the overall score section at the end of the performance appraisal form. Otherwise, the positive record you create today will make it harder to terminate the individual tomorrow.
Disciplinary No-No's
Progressive disciplinary warnings are especially subject to severe legal scrutiny. There are three key errors that supervisors make when documenting substandard performance or inappropriate workplace conduct in the form of written warnings. First, managers sometimes document vague and ambiguous consequences at the conclusion of the memo. For example, generic consequences that refer to subjecting a worker to "further action" or "serious discipline" may very likely leave an employee feeling unsure of your intentions. Worse, if you terminate someone relying on "consequence" language that is particularly vague, a judge or arbitrator may rule that the employee didn't realize that his job was in serious jeopardy of being lost.
If it is indeed determined that you have denied an employee workplace due process in the form of appropriate written warnings, then your termination may be overturned and the worker may be subject to reinstatement plus back wages or compensatory damages for wrongful termination.
Instead, conclude disciplinary warnings with the language, "Failure to provide immediate and sustained improvement may result in further disciplinary action up to and including dismissal." Such language provides you with ample discretion while clearly confirming the seriousness of the consequences to come should the individual's performance not improve to some predetermined standard.
Second, be careful not to "codify the damage" when documenting discipline. Many a well-meaning supervisor has unintentionally placed the organization at risk in an attempt to teach an errant employee a lesson. For example, documenting that an employee has "sexually harassed" a co-worker or "compromised an entire pool of mortgage loans" could later be used against your company as a documented fact. As a term of the trade, "sexual harassment" is a legal conclusion. If you confirm in writing that sexual harassment indeed has occurred, then your own documentation may become prime fodder for a plaintiff attorney looking to find proof of a supervisor's inappropriate actions.
Similarly, if a loan administrator mishandles a pool of loans by failing to follow appropriate mortgage banking guidelines, then such documented information could become evidence of neglect and mismanagement on your firm's part if that pool of loans never gets sold on the secondary mortgage market.
Instead, adapt a practice of documenting such matters using language that is less concrete and more fluid in tone. For example, in the case of a harassment issue where it appears that a supervisor has violated company policy, document that "Your actions appear to violate company policy 5.30." You might also write: "Your actions suggest that you may have created an offensive environment" and that you expect the supervisor to "never again engage in conduct that could appear to diminish a person's self-worth or sense of well-being." Similarly, in the case of the loan administrator's performance, document: "Your failure to follow standard operating procedure could have jeopardized an entire pool of loans."
Finally, avoid documenting state-of-mind offenses. In particularly egregious cases of inappropriate workplace conduct, managers sometimes attempt to paint a picture of the severity of the offense by using terms such as "deliberately, purposely, intentionally, willfully and maliciously." Such mental element qualifiers may indeed strengthen your written message to the worker, but they may also unintentionally escalate the written warning so that it appears as a personal attack. In essence, you will open yourself up to a whole new set of legal challenges as plaintiff attorneys challenge your behavior and pepper you with questions about how you could have possibly known what was going on inside their client's (your ex-employee's) head at the time of the terminating incident.
Keep in mind that professional plaintiffs always go after the weakest managers. Granted, you can't totally insulate your company from employment liability. However, you can place your organization in a highly defensible position by ensuring that you have the proper written record in place before taking any adverse actions against a worker. Stated differently: It's not so much an issue of getting sued; it's a matter of getting sued on your terms rather than theirs. When it comes to formal documentation, your company's primary and fundamental defense mechanism to employment litigation is to rely on your company's HR department to be the "master of the story" and to create the appropriate written records.
There's no easier way to ensure that your documentation doesn't make matters worse or somehow come back to bite you.
Editor's Note: Sadly, this is Paul Falcone's final installment of Management Tools. Falcone has been a regular contributor to HR Magazine for six years and over that time his columns have consistently provided insight and sage advice in a well-written, concise manner--a fact confirmed by the many thoughtful and appreciative letters to the editor his writing has generated. We hope one day his busy schedule clears a space to return as a regular contributor, but until then, you can enjoy his past columns at www.shrm.org/hrmagazine/tools.
PAUL FALCONE IS DIRECTOR OF INTERNATIONAL HUMAN RESOURCES AT PARAMOUNT PICTURES IN HOLLYWOOD, CALIF. HE IS THE AUTHOR OF FOUR BOOKS PUBLISHED BY AMACOM, INCLUDING THE HIRING AND FIRING QUESTION AND ANSWER BOOK (2001) AND 101 SAMPLE WRITE-UPS FOR DOCUMENTING EMPLOYEE PERFORMANCE PROBLEMS: A GUIDE TO PROGRESSIVE DISCIPLINE AND TERMINATION (1999). THIS ARTICLE REPRESENTS THE VIEWS OF THE AUTHOR SOLELY AS AN INDIVIDUAL AND NOT IN ANY OTHER CAPACITY.
COPYRIGHT 2004 Society for Human Resource Management
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