This is part two of five in our weekly series on Five Common Employment Law Mistakes, in which we discuss common pitfalls that employers encounter, and provide suggestions on how to avoid these mistakes. In this five-part weekly series, we are discussing the following topics:

1. Misclassifying Employees and Contractors

2. Poorly Managing and Documenting Employee Performance Concerns

3. Treating Similarly-Situated Employees Differently

4. Neglecting to Engage in the Interactive Process

5. Failing to Update the Employee Handbook

This week, we are discussing the common issue faced by nearly all employers of inadequate documentation of employee performance concerns.

Poorly Managing and Documenting Employee Performance Concerns

One of the most common mistakes that we see employers make is failing to proactively manage and document employee performance issues. We often hear from our clients when they have reached the decision to terminate an employee. Frequently the client tells us that the employee has struggled with their performance for some time, but the employer has not formally met with them to discuss the concerns nor documented the issues. We often advise the client to hold off on the termination, and ensure that they document the employee’s performance concerns before moving to termination.

While documenting employee performance concerns and warning an employee about her performance is not legally required, in its absence two things happen:

• The employee makes up her own reason about why she was disciplined or terminated because she has not been coached on her performance. Nine times out of ten, the reason she makes up is an illegal or nefarious reason, and if she can convince a plaintiff’s attorney of this, the employer will face the costly and time-consuming process of defending against her claims, even if it was the most justified disciplinary action or termination in the world.

• It’s just fair. Meeting with employees before any discipline or termination gives the employee a chance to correct their behavior. Conversely, if the first time the employee hears about the issues is when they are being disciplined or terminated, the employee is much more likely to feel this is unfair and to get upset. And when employees get upset, they often go to lawyers and, if they can find someone to take their case, they sue. Even a meritless case can be incredibly expensive and draining for the employer to defend. Also, there may be other illegalities that the plaintiffs’ lawyer will go after once she digs into the employment history: like the employee being wrongfully classified as exempt just because she was salaried, or the employer failing to give the employee documented overtime and lunch breaks.

This is why proactive employee management and documentation are some of the most important tools in effective employee relations management and in avoiding the risk of litigation down the road.

Documentation also serves several other important purposes. First, documentation helps maintain consistency in decision-making processes. When employers need to make tough decisions such as promotions, demotions, or terminations, having a record of performance issues ensures that decisions are based on factual evidence rather than subjective opinions. If the employee’s past mistakes are capable of being documented, the employer can also create a retroactive record of those issues. Another helpful strategy is to document employee concerns in real-time, by sending the employee an email shortly after the meeting or discussion that recounts the concern and the conversation that followed. Sometimes this practice is referred to as a “Same Day Summary,” which is a useful tool for HR professionals to use, and ensures that a written record is created.

Second, having thorough documentation allows an employer to move nimbly, if and when they need to discipline an employee, to put an employee on a performance improvement plan (PIP), or to terminate an employee. Without prior documentation, taking adverse action toward an employee is a much higher risk decision.

Finally, documentation can serve as a defense, if an employee later claims that they were treated unfairly. In that scenario, the documentation will demonstrate that the employer had a legitimate basis for the decision, and it was not based on subjective or discriminatory reasons. To summarize, documenting employee performance issues as they occur is a proactive approach that protects employers and allows them to make fair and effective decisions. Failing to document employee issues, particularly in the litigious state of California, often means facing a lawsuit even when the termination or adverse action was valid and legal.

We hope that these reminders about proactively managing and documenting performance concerns have been helpful. Please follow along for Part 3 next week, in which we will discuss making decisions in a consistent manner, and not treating similarly situated employees differently. Maier Law Group can assist with navigating these common pitfalls and proactively creating a healthy and effective workplace.

Read the rest of the series here:

Part One: Misclassifying Employees and Contractors
Part Two: Poorly Managing and Documenting Employee Performance Concerns
Part Three: Treating Similarly-Situated Employees Differently
Part Four: Neglecting to Engage in the Interactive Process
Part Five: Failing to Update the Employee Handbook

Author: Emily Harrington, Associate.

This article has been prepared for general informational purposes only and does not constitute advertising, solicitation, or legal advice. If you have questions about a particular matter, please contact the Maier Law Group directly.