Personnel File Mistakes That Can Get You In Trouble

It’s no secret employment lawsuits are on the rise. Wage and hour issues, discrimination, retaliation… companies all over the country are spending too much time in the courtroom, defending themselves against all sorts of employment-related charges.

Defending against a lawsuit is time-consuming and expensive. And the cost of back wages, fines, and penalties is going up all the time. Even if you settle before the case goes to trial, you could still be on the hook for a substantial amount.

What starts as a relatively small mistake — a misunderstanding, a well-intentioned (but misguided) initiative, a lack of training in the law — snowballs out of control. The next thing you know, you’re facing a disgruntled employee and their lawyer, or a wage and hour investigator, and you’re looking at possibly crippling liability for your business.

The thing is: in many cases, the problem is not necessarily with the action taken, but with the way the action was documented. With proper documentation, many of these issues could have been avoided.

Five Top Issues

Forewarned is forearmed. Here are the five biggest issues with personnel documentation that trip up employers:

  1. Lack of documentation

    If you have to discipline or terminate an employee, it’s important to fairly and impartially document the reasons for that action. If the employee files a complaint or lawsuit, this documentation can serve as proof of your lawful reasons for the action taken.

    Without documentation, it becomes your word against your employee’s and the outcome will hinge on which of you presents a more appealing and credible case.

  2. Careless communications

    Even worse than no documentation is bad documentation. Especially in cases involving discrimination or retaliation, poorly-worded emails, memos or notes can be used to show discriminatory intent on the part of the employer.

    Your supervisors and managers should write every email, every memo, every document, as though it is going to show up in court some day. (Because it just might!)

  3. Overdocumentation

    Knowing that lack of documentation can be a problem, sometimes managers who are preparing to discipline or terminate an employee go too far in the other direction. This is sometimes called “papering” the employee’s file — loading the file up with every minor infraction in the weeks leading up to the adverse action as a way of “proving” the action was justified.

    It’s important to be consistent in documenting employee performance, both good and bad, and to give employees regular performance feedback.

    Speaking of performance feedback, this leads us to another common problem:

  4. Being “too nice”

    It’s hard to give negative feedback. But employees can’t improve if they don’t know their performance is sub-par.

    Unfortunately, I see stories all the time about workers who received good (or even excellent) ratings on their formal performance reviews — only to find themselves the subject of disciplinary action and termination for “poor performance” shortly afterward.

    Often this is because the supervisor simply wanted to avoid a possible confrontation with the employee. Sadly, in these cases the situation is allowed to fester until it progresses beyond the point of no return.

    Employees who feel they’ve been blindsided are more likely to complain or file a lawsuit. And when the stated reason for an adverse action is contradicted by the employer’s own records, courts often interpret the stated reason as concealing another (possibly illegal) reason for the adverse action.

    A better idea: be honest (but not mean!) with employees. If they’re doing something well, they need to know about it — and if there’s room for improvement, they need to know that, as well. Be clear about your expectations. Ask plenty of questions and follow up to make sure your employees understand what they need to do, and that they have the resources they need to do their jobs well.

  5. Inconsistency

    Taking an adverse action for “poor performance” against an employee who has received consistently good performance reviews is bad. Changing your story after you’ve disciplined or terminated an employee might be even worse.

    In a 1996 court case (Thurman v. Yellow Freight Systems, Inc.), the judge stated, “An employer’s changing rationale for making an adverse employment decision can be evidence of pretext.”

    Right here in our home state of North Carolina, the case of Roberson v. Smith, et. al. illustrates what this means. Tricia Roberson worked as a mobile X-ray technician. She began to refuse calls that occurred at the end of her work day to avoid working overtime, and refused a call she received on Christmas Day, stating she wanted to spend time with her family.

    Unfortunately, none of these incidents were noted in Roberson’s personnel file.

    Some time later, she was injured while re-loading equipment into her van after finishing an assignment. She filed a worker’s compensation claim and took several days off work. Soon after that, she was fired. Her employer cited all the assignments she had refused as the reason for termination.

    Roberson sued, alleging (among other things) the company was actually retaliating against her for filing a worker’s compensation claim. At trial, the company came up with several additional reasons for her termination. It’s possible management thought adding more reasons for the termination would make it sound more justifiable — but in fact the opposite was true. As their story changed, it looked as though the company was trying to cover up illegal retaliation by throwing whatever they could think of into the pot.

    On the other hand, there’s the case of Asmo v. Keane, Inc. In this case, Susan Asmo was laid off two months after she announced she was pregnant with twins. At the time of the layoff, her manager gave her five reasons for the termination.

    She sued, claiming the employer actually terminated her because she was pregnant. At trial, her manager testified there were only three reasons she was laid off — omitting two of the reasons that had been given to Ms. Asmo at the time of her termination. It turned out the two reasons he left out at trial were, in fact, false. Here’s what the court had to say about that:

    “It appears that

    [the manager] offered any and all reasons he could think of to justify his decision to Asmo, whether or not they were true. Once a lawsuit was filed and Keane knew the reasons would be subject to scrutiny, it changed the justifications offered for Asmo’s termination to include only those that were either circumstantially true or could not be as easily penetrated as false. This change in rationale is suspicious and is evidence of pretext.”

    In other words, it doesn’t matter if the story changes to add more reasons for an adverse employment action, or if it changes to eliminate previously stated reasons. A story that changes, at all, can serve as evidence of pretext.

Help is Available

AcroTime® HR is a cloud-based service that can help you avoid these and other personnel documentation issues — reducing your potential legal liability and improving worker morale. AcroTime HR offers many useful features:

  • Onboarding — Make sure you set proper expectations with your new hires.
  • Performance Management — Standardized performance appraisal definitions, measurement of competencies, goals, and core values, and employee self-assessment options help ensure complete and consistent performance documentation.
  • Incident/Discipline Tracking — Centralized case tracking and reporting, email notifications, and optional storage of supporting documents mean everyone stays on the same page. No changing stories, no missing documentation!
  • And more…

To request a free demo of the complete AcroTime workforce management suite, including AcroTime HR, visit our website.

[social_share/]

Did you find this article useful? Subscribe to our free email newsletter and enjoy informative articles like this every month!