Do Not Tolerate Marginal Employees, Employee Handbooks/Arbitration Agreements, Properly Implementing Workforce Reductions
The Goldstein Law Firm
May 2009 Newsletter
“Do Not Tolerate Marginal Employees, Employee Handbooks/Arbitration Agreements, Properly Implementing Workforce Reductions - Layoffs, and Proposed Legislation Being Considered in Sacramento”
By: Charles H. Goldstein, Esq.
The Goldstein Law Firm
1. Do Not Tolerate Marginal Employees:
Many companies have employees who are “marginal performers”. These employees are generally considered “deadwood” because they add nothing to the profitability and/or efficiency of a company. During healthy economic times, employers generally “tolerate” these employees because they want to justifiably focus on maximizing their profitability, and do not want to unnecessarily “rock the boat.” However, during tough and lean economic times, such as the current business climate, employers can not afford to “tolerate” marginally performing employees who receive a company paycheck, but who do not contribute to the company’s overall success. Employers must have and implement an effective and coherent strategy for dealing with marginally performing employees or continue to economically “suffer” at the hands of these employees.
A. Characteristics of the Marginal Employee
The marginally performing employee generally exhibits some or all of the following characteristics: (1) wants to avoid being held accountable for his or her actions; (2) blames any work problems (if he or she admits any exist) on lack of training, some form of discrimination and/or fellow employees who the marginal employee believes are treated more favorably; (3) has a false sense of entitlement because they believe that you owe them a job; (4) resists all authority and desires to thwart the exercise of authority; (5) sees every attempt by you to hold them accountable as an act of retaliation or unjust or unfair treatment; (6) may resort to claiming health problems when you attempt to hold them accountable because of perceived legal protections from discipline and termination afforded to employees while on various forms of medical leave; and (7) attacks their manager and/or supervisor with charges of discrimination, unfairness, and impropriety when confronted with being held accountable.
B. Effectively Dealing with Marginally Performing Employees
A winning strategy you can use for dealing with the marginally performing employee involves the completion of a three step process in which the employer: (1) establishes a measurable, objective and reasonable performance standard for the marginal employee; (2) communicates this performance standard to the marginal employee; and (3) documents all conversations with marginal employees, poor performance events, and any discipline imposed on the marginal employee. In order to remove a long term marginally performing employee, you must be willing to try to get the marginally performing employee to improve their performance to an acceptable sustained level, rather than assuming that getting the employee to improve is a hopeless task.
In establishing a measurable, objective, and reasonable performance standard for the marginal employee, you must ensure that the marginal employee is properly trained to perform the work to your standard of performance. Frequently, the marginal employee who is subsequently terminated from employment, asserts the claim in litigation that they were never “properly trained by the employer” to perform their job duties or that you treated them differently than other employees whose performance was no better than their performance. You should make certain that the marginal employee has the proper and necessary training to perform his or her job at a level which meets and/or exceeds your performance standards and that the marginal employee has been treated the same as other employees performing the same type of work.
These performance standards should be clearly communicated to the marginal performer in simple language, both orally and in writing. You should determine what level of job performance you expect from the marginal employee to meet and/or exceed. When orally communicating these performance standards to the marginal employee, you should have a management witness present who can make contemporaneous written notes of the event. You should avoid using the time when you are communicating performance standards to the marginal employee as an opportunity to blame the employee or accuse the employee of being “lazy”. Instead, you should focus your attention on communicating a reasonable set of job expectations with agreed upon goals and timetables for reaching those goals.
You should never have to “settle for less” than an employee who wants to do their best to perform. There is no reason why you should accept the substandard performance of marginal employees in a tough economy or at any time. Employers who remove marginal employees from the workforce can improve their company’s profitability and efficiency.
2. The Best Defense Is A Strong Offense – Updated Employee Handbooks and Enforceable Employee Arbitration Agreements
Plaintiff lawyers are not going out of business simply because the economy is rough. Instead, these marauding bands of employee attorneys look for “soft targets of opportunity” – weak employers who are unlikely to have an updated or lawful Employee Handbook, and most importantly enforceable Arbitration Agreements signed by employees.
You can not control whether an employee is disgruntled or “feels” that he or she is a “victim” and has been treated unfairly, even when you take actions against them that are legally justifiable and reasonable under the circumstances. However, you can place your company in the best possible position to defend against future employee lawsuits filed against your company. The cornerstones of a strong defense against future employee lawsuits are updated and lawful Employee Handbooks and utilization of legally enforceable Arbitration Agreements for all new employees and existing employees who receive a promotion or increase in salary.
As a California employer, you should regularly have your current Employee Handbook updated to reflect recent and important changes in California and/or federal law. If you do not do this, you run the risk of potentially enforcing personnel policies that may be illegal and/or otherwise unenforceable because the law has changed. In addition, you will want to have Arbitration Agreements included as a significant and valuable human resources component. In short, while Arbitration Agreements do not prevent an employee from suing you, these agreements can, if properly drafted and if necessary legally enforced, remove the employment dispute to an Arbitration forum in which the passions and prejudices of a jury are not present.
3. Properly Implementing Workforce Reductions - Layoffs:
While the economy remains challenging, many employers will decide to improve their bottom lines by making reductions in workforce. Beware of the legal pitfalls of a poorly planned layoff. The greatest legal problem for employers choosing to lay off employees is not necessarily proving the financial need for the lay off, but instead proving that the employees selected to be laid off were chosen based on objective criteria, and not as a result of improper and unlawful bias.
Examples of objective crit
Therefore, prior to laying off employees, California employers should review the following checklist: (1) develop criteria for determining who will be laid off in advance of any layoff; (2) apply your stated criteria consistently and document how it was applied to each person to be laid off; (3) once the layoff list is prepared, determine whether the layoffs adversely impact persons over 40 or any other protected class of employees; (4) if the layoffs adversely impact persons over 40 or any other protected class of employees, seek to determine why and to remedy the situation, if possible; (5) determine whether you are going to provide any severance to laid off employees in return for a Release of All Claims Agreement; (6) determine when the layoffs will occur and whether your company has any obligation to make advance written notifications pursuant to California’s Relocations, Terminations, and Mass Layoffs law and/or the Federal Worker Adjustment and Retraining Notification Act; (7) determine whether you have any obligation to bargain over the layoffs with a union representing your employees; and (8) have your layoffs reviewed before they take place to minimize the potential for lawsuits for wrongful termination and discrimination.
4. Proposed Legislation Pending Before the California Legislature:
A. Mandatory Sick Pay
Among other requirements, AB 1000 would require that an employee who works in California for 7 or more days in a calendar year is entitled to paid sick days, which would accrue at a rate of no less than one hour for every 30 hours worked. An employee would be entitled to use accrued sick days beginning on the 90th calendar day of employment.
B. Lactation Accommodation
While existing law requires among other things that an employer provide a reasonable amount of break time for lactation purposes and specifies that the break time, if possible, would run concurrently with any break time already provided to the employee; AB 514 would require an employer to provide a 20-minute paid rest period for lactation purposes during each 4-hour work period, immediately preceding or following the employee’s rest period, and would specify that compliance with this requirement does not satisfy or affect an employer’s separate obligation to provide a meal or rest period required by statute, an Industrial Welfare Commission order, or a collective bargaining agreement. C. Payroll Records
Under existing law, the Labor Commissioner is authorized to investigate employee complaints and to provide a hearing in an action to recover wages, penalties, and other demands for compensation. AB 527 would provide that if the Labor Commissioner finds that payroll records submitted for any pay period relating to any claim or complaint brought pursuant to the commissioner’s authority have been intentionally falsified, all payroll records relating to that claim or complaint must be presumed false and disregarded.
The Goldstein Law Firm
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Beverly Hills, California 90211
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