The Employment Paper Trail: Using Documentation and Performance Appraisals to Avoid the Potholes

By Mark R. Hornak of Buchanan Ingersoll & Rooney PC

INTRODUCTION

Employment documentation begins well before an individual comes to work for you, and it continues after he or she leaves your employ. Documentation can be useful if it:

  • chronicles events of an individual's employment, such as production awards or violations of work rules;
  • memorializes various procedures implemented by your organization (e.g., the steps taken during a recent hiring effort);
  • demonstrates patterns of individual, departmental, or organizational conduct (e.g., a department's long-running practice for requesting time off);
  • helps you make informed business decisions;
  • supports your company's defense (or in some cases, its prosecution) of a grievance, administrative charge, or lawsuit; and
  • complies with government regulations and recordkeeping requirements.

The problem most employers face is not knowing what to document, how to prepare proper documentation, or what to do with it once we have it. In short, what can an employer do to make those reams of paper into something useful and keep them from becoming "hazardous materials"? This chapter is designed to help you answer that question.

One area of employment documentation in which employers spend a great deal of time is evaluating their employees' job performance. The importance of evaluations cannot be overstated. No other form of documentation covers so many aspects of an employee's workplace behavior over such a long period of time. A performance appraisal should be, and often is, a valuable document for employers. However, improperly conducted evaluations can prove to be ineffective or even harmful, especially in litigation. This chapter will suggest some ways to make performance appraisals work for you.

Another area in which documentation is crucial is the termination of an employee's employment, whether voluntary or involuntary.

This chapter will first address documentation during the period of employment (i.e., employee job performance). It will then discuss documentation at the termination of employment.

  1. Documentation Basics

Successful documentation requires that employers follow 10 key rules:

  1. Maintain a contemporaneous record.
  2. Define the problem or issue.
  3. Explain the effect of the problem or issue on your organization.
  4. Be accurate in your accounts.
  5. Use explicit time frames.
  6. Refer to specific instances or a pattern of conduct.
  7. Be fair to the employee.
  8. Explain your position clearly.
  9. Know the facts.
  10. Spell out the consequences.
  1. Documentation of an Employee's Job Performance

Once an employer hires an individual, a variety of documents relate that employee's history with the employer. Depending on who prepares the documents and the types of documents used, this written account may bear strong or very little resemblance to the reality of the situation. Among the types of documentation that an employee's job history may include are:

  • employment handbooks, manuals, and policies
  • collective bargaining agreements
  • disciplinary notices
  • grievances
  • incident reports
  • records of investigations
  • records of leaves
  • pay and attendance records
  • awards or commendations
  • changes in status
  • benefits
  • post offer, pre-employment medical examination
  • medical records
  • job descriptions
  • performance appraisals

Selected types of documentation will be discussed below.

  1. Employment Handbooks, Manuals, and Policies.

Employers, in an effort to establish and to explain policies governing the workplace, should be careful in doing so not to create other problems for themselves.

Generally, a handbook is not a contract of employment unless a reasonable person would believe that it is.

Here are 10 general guidelines to follow when developing a handbook or other employment policy:

  1. Affirmatively state that policies are not a contract.
  2. Be aware of your audience:
  • current and prospective employees
  • governmental agencies
  • courts
  • lawyers
  1. Make sure what looks good on paper is workable in practice.
  2. Don't box in supervisors.
  3. Understand the legal, business, and economic consequences of your policy decisions.
  4. Don't try to duplicate what is written elsewhere.
  5. Where appropriate, use general statements and qualifiers to afford your organization maximum protection, discretion, and flexibility.
  6. Make sure your supervisors are trained and know of changes in your personnel policies.
  7. Stay current and update your handbook as needed, dating the policies to indicate the most recent updating.
  8. Distribute and review the handbook or policies with all covered employees.

There are several statements, disclaimers, and qualifiers that you should include in any handbook. Here are examples:

  1. Receipt of Employment Handbook.

  2. I, [name of Employee] , acknowledge receipt of my copy of the [name of Employer] Employment Handbook. I will carefully read it over, and will keep it available for future reference.

    I understand that this Handbook is intended as a guide to policies, practices, benefits, and general information that should assist me during my employment. I understand that [name of Employer] reserves the right to amend, modify, or terminate in whole or in part any benefit, policy, or practice described in this Handbook as well as all other benefits and conditions of employment at any time at its sole discretion.

    I also understand that the contents of this manual, my employment application, and any other [name of Employer] documents are not intended to be a promise of future or continued employment and do not constitute a contract of employment. I understand that I am an at-will employee and may terminate my employment at any time. [name of Employer] may terminate the employment relationship at any time, with or without cause. In accepting employment at [name of Employer] , I have not relied upon any oral or written statement to the contrary by any employee, manager, board member, or officer of the organization.

    Date: Signature of Employee

  3. Employment-At-Will Disclaimer.

  4. This Handbook contains general information about [Employer] , its policies and procedures. If questions or problems arise in the course of your work, you should consult this Handbook. If the question is not resolved by your review of the Handbook, you should direct your question to [name or position] .

    The policies, procedures, benefits, and information described in this manual do not constitute, and are not intended to be, a promise of future or continued employment with [Employer] . This Handbook is not an employment contract and the policies, procedures, benefits, and information described herein in no way affect the status of any individual employee as an employee at will. As an employee at will, an employee may terminate his/her employment at any time, with or without cause. No manager, supervisor, or representative of [Employer] , other than [title], has the authority to enter into any agreement for employment for any specific period of time, or to make any agreement contrary to the foregoing.

    [Employer] also reserves the right to amend, modify, or terminate in whole or in part, any information, benefit, policy, or practice described in this document, as well as all other information, benefits, and conditions of employment, at any time at its sole discretion.

  5. Hiring and Citizenship Requirements.

  6. [Employer] hires only individuals lawfully authorized to work in the United States. In compliance with federal immigration laws, we will require all new employees to complete the Employment Eligibility Verification Form I-9 adopted by the Immigration and Naturalization Service and to provide legally sufficient documentation of identity and employment eligibility.

  7. Equal Employment Opportunity Policy.

  8. [Employer] is an Equal Opportunity Employer. We do not discriminate in recruiting, interviewing, hiring, training, length of service, compensation, benefits, promotion, demotion, transfer, layoff, discipline, discharge, or other terms, conditions, or privileges of employment because of an individual's race, color, age (40 and over), sex (except where age or sex is a bona fide occupational qualification), religion, national origin, disability, veteran or current military status, [sexual preference]*, or [ancestry].* It is our policy to employ and promote those applicants and employees who are best suited for the position and possess the necessary skills, education, experience, and qualifications.

    No employee shall discriminate against another employee in any terms or conditions of employment because of race, color, age (40 and over), or sex (except where age or sex is a bona fide occupational qualification), religion, national origin, disability, veteran or current military status, [sexual preference]*, or [ancestry].*

    Discrimination, coercion, intimidation, or interference in any form, including racial or ethnic slurs or jokes, shall be promptly reported to [title]. Any person who feels he/she has not received fair treatment in accordance with these policies and procedures should report that to his/her supervisor or [identify a third person]. All complaints will be promptly investigated by [title] or his/her designee. Any employee who is found to be in violation of this policy shall be subject to disciplinary action, which can result in discharge.


    President

  9. Sexual Harassment Policy.

  10. [Employer] will not tolerate harassment of any type, including sexual harassment, in the workplace. It is the responsibility of every employee and supervisor to ensure that any instance of sexual harassment is dealt with swiftly and fairly and to promote a climate within the company that will not tolerate such conduct.

    Sexual harassment includes, but is not limited to, UNWELCOME sexual advances, requests for sexual favors, or sexually related, suggestive, or degrading language, gestures, coercion, humiliation, embarrassment, physical contact, or display in the workplace of sexually related, suggestive, or degrading objects or pictures. (NOTE: A key point is that the term "UNWELCOME" is determined by the recipient of the harassment. It is not at the discretion of the person who makes the comments or gestures to decide whether that behavior is welcome or not.)

    Each supervisor has a responsibility to maintain the workplace free of any form of sexual harassment. No supervisor shall threaten or insinuate, either explicitly or implicitly, that an employee's refusal to submit to sexual advances will adversely affect the employee's employment, evaluation, salary, wages, benefits, advancement, assigned duties, or any other condition of employment or career development. No supervisor shall favor in any way an applicant or employee because that person has performed or shown a willingness to perform sexual favors for the supervisor.

    Any person who believes that he or she has witnessed or is a victim of sexual harassment should report the incident immediately to his/her supervisor or [title] . Allegations of sexual harassment will be treated seriously and will be promptly investigated by [title] or his/her designee.

    [If the complaining person or the person against whom the complaint is lodged is dissatisfied with [Employer's] response to the complaint, either person can request a review by the [Employer] if the request is made within ten (10) days of receipt of [Employers] response.]

    Any employee who is found to be in violation of this policy shall be subject to disciplinary action which can result in discharge.

  11. Family and Medical Leave Act Policy.

  12. Section 825.301 of the federal Department of Labor's Final Rules Implementing the Family and Medical Leave Act requires an FMLA-covered employer that provides "written guidance," such as a handbook, concerning employee benefits or leave rights to include information about an employee's FMLA entitlements and obligations. If an employer does not have a handbook, it is still obligated to provide written notice to the employees of their entitlements and obligations.

  13. Disciplinary Policy/Work Rules.

Any policy setting out types of disciplinary action and improper conduct should preserve (1)the employer's discretion to take whatever disciplinary action is appropriate, and (2)the employer's flexibility to discipline for misconduct not specifically set out in the handbook. An example of this type of introductory language is as follows:

To ensure that quality services are provided by [Employer] , certain standards of conduct and levels of performance are expected of our employees. There occasionally is the need, however, for corrective or disciplinary action when an employee does not meet the organization's standards. [Employer] retains the discretion to determine when and what type of disciplinary action is appropriate in each particular instance. Disciplinary measures may include counseling or verbal warning, written warning, time off or suspension without pay, and termination of employment.

Rules regarding common courtesy and decency are not set down as written work rules, but are expected of all employees. Further, an employee involved in any of the following acts will be subject to disciplinary action. Such conduct can result in discharge. This list is not intended to be all-inclusive. [Provide list of specific types of misconduct.]

  1. Disciplinary Notices.

Often in employment litigation an employer's witnesses are asked to recall instances when the employee who has sued the employer was warned, reprimanded, counseled, or disciplined for his or her conduct or performance. Memories fade over time and often personnel files offer little supporting documentation to help the witness' recollection. One way to avoid this problem is by preparing disciplinary notices. If properly drafted, disciplinary notices can become more valuable over time. They provide a contemporaneous record of events, fill in stretches of employment, and tie together the employee's history and the employer's defense. Disciplinary notices need not be complex, long-winded documents. Keep them simple. They should:

  • be consistent
  • be completed timely
  • be factually descriptive
  • if possible, include the names of witnesses
  • state the action taken
  • be objective
  • provide consequences
  • provide future expectations
  • discuss prior disciplinary actions
  • be dated and signed

Remember that disciplinary actions should be taken after the supervisor has had time to coolly and rationally think about the situation. Disciplining an employee in anger will likely be ineffective and detrimental.

  1. Investigations.

Employers are conducting more investigations than ever before. Typically, these investigations concern complaints of harassment. Once again, documentation of the steps taken, procedures followed, facts discovered, conclusions reached, and actions taken is an important part of any investigation. Documentation begins in advance of an investigation. Employers should have published to all employees a harassment policy and procedure outlining what constitutes harassment, the organization's intolerance of such behavior, the procedure for reporting and investigating harassment, and the consequences to harassers. Additionally, the employer should document any and all training efforts, and who attended these sessions.

Once an employee makes a complaint, the employer's objective is to develop a complete picture of the circumstances so that it can fairly resolve the complaint and take appropriate action. An employer should make sure it documents the following steps:

  1. Person(s) assigned to conduct the investigation
  2. Interview with the individual making the complaint
  • the date and location of the interview
  • who was present
  • disclaimers by the organization, including no retaliation
  • statement regarding confidentiality
  • questions to the complainant
  • complainant's responses
  • additional documentary or other tangible evidence, including any written statements
  • identification of the harasser(s)
  • identification of witnesses
  • identification of others who may have similar complaints
  • what the complainant is seeking
  • that you had the individual review, correct, and sign the statement, acknowledging that it is truthful and accurate.
  1. Interview with the alleged harasser(s)
  • follow the documentation steps set forth above
  • include a statement informing the alleged harasser of the particulars of the complaint
  • review and record the alleged harasser's response to each allegation
  • gather documentary and other tangible evidence, including any written statements
  • have the individual review, correct, and sign the statement, acknowledging that it is truthful and accurate.
  1. Interview with witnesses
  • again, follow the documentation steps outlined above
  • document whether the witness can recall the events, the complainant's reaction, and who was involved
  • have the witness review, correct, and sign the statement, acknowledging that it is truthful and accurate.
  1. Prepare written analysis and tentative conclusions solely for legal counsel's review.
  2. Prepare analysis and conclusions. If the conclusion is that the allegations have been verified, meet and fully explain those conclusions to the alleged harasser, and give that individual a last chance to be heard. This meeting should be written up in narrative form.
  3. Draft document concerning disciplinary action.
  4. Document meeting with complainant, including his or her reaction to the results of the investigation and any remedial action taken.
  1. Performance Appraisals.
    1. The Role of Performance Appraisals.

At rock bottom, a performance appraisal takes the job description and evaluates and measures an employee's performance against it. A performance appraisal also creates expectations of future performance and rewards. It provides a base of information about the employee from which an employer can make business decisions. Finally, an employee's performance appraisal provides a documented job history for that individual.

Employers have become increasingly aware of claims for negligent supervision, training, and retention. Performance appraisals can either help or greatly hurt an employer's defense to such claims.

Accurate performance appraisals, by themselves, would not have shielded employers from liability in the cases below. However, accurate appraisals and subsequent action by the employer could have corrected or eliminated the problem that led to these lawsuits:

  • Yunker v. Honeywell, Inc., 496 N.W.2d 419 (Minn. App. 1993). Honeywell had employed a violent employee for two years, and then re-employed him. Upon his release from prison for the strangulation death of a co-employee, the employee was rehired by Honeywell. He was subsequently transferred twice because of workplace confrontations.

    The employee then killed a co-worker in her driveway with a close-range shotgun blast when she rebuffed his romantic advances. He was later convicted of first-degree murder and sentenced to life imprisonment.

    The court concluded that Honeywell could not be held liable for negligent hiring because it did not owe a duty to the murdered co-worker at the time of the violent employee's hire. The court stated that the scope of the employer's duty of reasonable care in hiring is largely dependent upon the type of responsibilities associated with the particular job. Id. at 423. The violent employee's position as a custodian did not expose him to the general public and required only limited contact with co-workers. His duties did not involve inherent danger to others and the co-worker's death was not reasonably foreseeable at the time he was hired. The court also commented that holding Honeywell liable would say that ex-felons are inherently dangerous and harmful acts they commit would automatically be considered foreseeable to an employer. The court opined that such a holding would deter employers from ever hiring employees who had criminal records.

    Nevertheless, the court found a cause of action for negligent retention. Based on several violent, hostile episodes that occurred during the violent employee's post-imprisonment employment, the court concluded that Honeywell became aware or reasonably should have become aware that he would act violently towards co-workers. As the risk was foreseeable, Honeywell had a duty of care to its employees, and particularly to the murdered co-worker. Id. at 424.
  • County of Riverside v. Loma Linda University, 118 Cal. App. 3d 300, 173 Cal. Rptr. 371 (1981). The court found Loma Linda University owed to its patients, who were under its care, a duty to ensure that the residents received appropriate instruction and were properly trained.
  • Smith v Bethany, 48 D. & C.3d 359 (Court of Common Pleas of Delaware County, Pa. 1988), aff'd in unpublished opinion, 392 Pa. Super, 661, 564 A.2d 268 (1989). The employer was liable for negligent supervision because he failed to supervise or control his employee, and failed to take steps to test, evaluate, or observe the employee before requiring the employee to drive a delivery truck.
  1. Situations Where Performance Appraisals Are Often Used.
  • professional development
  • promotion
  • compensation
  • downsizing and restructuring
  • performance-based warnings
  • discharge
  • lawsuits
    • reflection of performance
    • justification for action taken
    • pretext
    • credibility
  1. Types of Performance Appraisals.

  2. There are a variety of appraisal techniques and methods. Four of the most commonly used methods are Weighted Responsibility Rating, Weighted Trait Checklist, Management by Objectives, and Narrative Evaluation.

    1. Weighted Responsibility Rating.
  • Key elements: Position descriptions for each position to include all major responsibilities. Supervisors review position descriptions with employees annually and set performance standards as needed. Expectations, milestones, and results are reviewed regularly throughout the year. Rating forms consist of responsibilities from position description, anticipated achievement levels, a rating scale, and space for comments. Factors are weighted to accurately reflect realities of the job.
  • Advantages: Rating weighted factors are specific to each job. Rating scales are the same for all employees. Position descriptions are reviewed annually and updated. This method is useful for merit-based compensation decisions and for development within a given position. Employees' milestones and goals are reviewed throughout the year.
  • Disadvantages: This method may alter position descriptions to fit an individual instead of the needs of the job. It requires time to develop specific position descriptions and communicate objectives to employees at the start of the review period. The focus on current position does not assess certain factors for promotion or development considerations.
  1. Weighted Trait Checklist.
  • Key elements: This method uses standardized rating forms and lists qualities or "traits" of employee performance. Each trait is rated using a predetermined scale. Narrative support for ratings may or may not be required.
  • Advantages: This method is generally easy to train for, use, and administer. There are many standard forms available. All employees are rated on the same scale. It allows a wide latitude for the supervisor's interpretation. Finally, it is suited to anniversary date or calendar or fiscal year review periods.
  • Disadvantages: Traits are general and may not be related to job performance. Individuals using this method tend to focus on personalities instead of job performance results. Ratings tend to reflect the halo effect. The method may confirm employees' suspicions that the system promotes favoritism. Unfortunately, this method may not provide employees with useful development feedback and may frustrate employees who are looking to improve.
  1. Management by Objectives.
  • Key elements: Employee and supervisor agree on employee's performance objectives for coming year. Those agreed-upon objectives are stated primarily in terms of achieving results. Both the employee and the supervisor monitor progress throughout the appraisal period. An employee's performance is assessed against each objective at the end of the period. If carried out properly, there are no surprises.
  • Advantages: Focuses directly on achievement of results rather than personal characteristics. The employee and supervisor annually establish agreed-upon business and personal objectives that adjust to changing business needs and personal development.
  • Disadvantages: Employees are rated on different factors and scales, which can result in employees perceiving inequity in the system. This method is susceptible to varying standards among appraisers. It is difficult to implement, hard to administer, requires extensive training in goal setting, and is subject to all the difficulties of forecasting.
  1. Narrative Evaluation.
  • Key elements: There is little or no prescribed format. Supervisors prepare written narratives of an employee's overall performance.
  • Advantages: Supervisors are not forced to rate traits or normal responsibilities. It emphasizes and demonstrates when/how employees performed, excelled, or fell short, and is useful for employee development.
  • Disadvantages: This method is susceptible to varying standards of comparison since there are no common ratings or factors. Generally, it is not reliable for overall ratings needed for salary purposes. It encourages the halo effect and depends heavily on the writing ability and the interest of the supervisor.
  1. Writing Performance Appraisals You Can Live With.
  • Put narrative comments in the context of the organization and the events affecting the job performance

Example: "During the past year, the company has downsized Smith's department. The company will install new computer maintenance systems during the next two years. As a result, Smith has had to take on additional responsibilities and attend training on new systems which are planned for installation."

  • Be descriptive and specific

Example: "Smith's lack of organization has had a detrimental effect on the department. For example, he was assigned the responsibility for analyzing the draft budget for the division, but failed to meet any of the projected deadlines and did not prepare a report in time for the scheduled budget meeting."

  • Relate the employee's performance to standards, goals, and objectives

Example: "All account executives are to provide weekly reports of contacts, results, and future action plans. Doe completed only 50 percent of her reports in the past six months."

  • Begin preparing for the next appraisal shortly after you complete the current one
  • Record events at or close to the time they occur
  • Accurately record events and evaluate performance
  • Be fair
  • Articulate expectations going forward

Example: "During the next six months, we expect Smith to attend training and to perform her shipping and packing responsibilities listed in the job description without assistance of a part-time employee."

  • Define problems

Example: "Smith's performance is unsatisfactory because he doesn't complete work in a timely manner, work has to be done over because of errors, and work was not completed or ever turned in, despite repeated requests."

  • Suggest solutions

Example: "For Smith to improve his performance to an acceptable level, he must improve his personal computer skills by attending company training classes, recheck all calculations and proofread reports, organize his workload, and request assistance in advance of deadlines."

  • Establish a time frame within which the employee must act/improve.
  1. Traps to Avoid.
  • Anger and emotion

Example: "In all my years, I have never had such an obnoxious employee. He'd better learn who the boss is."

  • Halo effect

Example: "She is a great person and an asset to the department. She is dedicated and volunteers for extra work. Her skill level and job knowledge are well above average."

  • Centralized ratings

Example:

  • Skill

  • Effort

  • Knowledge

  • AB

  • 4

  • 5

  • 4

  • CD

  • 5

  • 4

  • 4

  • EF

  • 5

  • 5

  • 4

  • GH

  • 4

  • 5

  • 5

  • IJ

  • 5

  • 4

  • 5



  • Recency effect

Example: "In the past month, she was late four times and has been unwilling to stay late to help others."

  • Grade inflation

Example: See chart under "Centralized ratings."

  • Non-behaviorally based comments

Example: "His hair color changes more often than the lights on Grant Street."

  • Personal comments

Example: See comment above

  • Generalized, subjective descriptions

Example: "He is not a team player"; "She just doesn't have it anymore."

  • Good/Bad/Good

Example: "He has a positive attitude, but has some difficulty getting to work on time. He is generally 15-20 minutes late, three times a week. I hope he will get better about it once he settles into his position."

  • Clouding the issue

Example: "She is a good worker, but could be great if she put her heart and mind into it."

  1. Documentation of the Termination of Employment

Termination of employment, regardless of the reason, generally causes an employer to generate more documents to "paper the file." Those documents are often critical to the disposition of charges, complaints, and lawsuits. Documentation of this stage may include:

  • final warnings
  • supervisor and/or witness statements about the precipitating event
  • statements of the reasons for termination
  • notice of termination
  • exit interview
  • layoff notice
  • WARN notice
  • COBRA notice
  • separation agreement and release
  • responses to government inquiries
  1. Documentation in Preparation of Termination.
  1. Employers must define the reasons for termination, keeping in mind that arbitrators, administrative agencies and their investigators, judges, juries, and lawyers will be reviewing those reasons,
  • Timing is critical. Define our reasons prior to termination, not afterwards. Employers that "go back" and write up their reasons are wide open to challenges that those reasons are post hoc rationalizations.
  • Specificity is just as important. Often employers will generalize their reasons for termination and examples of the conduct that led to termination, so as not to leave anything out. Unfortunately, these generalizations tend to be descriptive instead of being factually specific. If an employee is a "poor performer" or "not a team player," then provide the factual bases for that description, e.g.: "She does not complete her work in a timely fashion"; "His work was discarded and started over due to the number of errors"; "He did not offer to help his co-workers who were busy while he had no pressing matters." Make certain that you compile a list of specific situations that support your reasons.
  • Procedures and practices must be followed and documented.
  1. Employers must put the precipitating event in a historical context:
  • Define the precipitating event resulting in your decision that it is now time to discharge an employee.
  • Develop the employee's history of problems, if appropriate, and especially if other documentation of that history exists.
  • Document the triggering event with witness statements, when appropriate.
  1. Prepare and review an outline for the discharge meeting.
  1. Documentation at the Time of Discharge.
  1. The spokesperson should prepare an outline for the separation meeting. The outline should include:
  • background information regarding what brought the parties to this point -- for example, an investigation prompted by a complaint from an employee or customer, or a downturn in business
  • the factual basis for the decision
  • a clear statement that the time for discussion has passed
  • if appropriate and available, the employee's options
  • the employee's benefits and any entitlements
  • whether severance is available, and whether the employer is offering a separation package in exchange for a release.
  1. The note taker should record the discussion and have the notes confidentially typed and preserved.
  2. Separation agreements should include:
  • a statement that the consideration is beyond what the employee would normally receive at the time of separation and is in return for a release of any and all claims arising up until the time the agreement is executed
  • the terms of the enhanced benefits
  • no admission of liability
  • no application for re-employment
  • confidentiality (consider an automatic payment of damages to the employer in case of breach)
  • tax treatment of the settlement and indemnification
  • a statement advising the employee to consult with an attorney
  • if appropriate, specific reference to rights or claims arising under the federal Age Discrimination in Employment Act (ADEA)
  • if ADEA claims are released, a period of 21 days to consider the release
  • if ADEA claims are released, a period of 7 days for the employee to revoke the release once it is signed
  • if appropriate, the information and rules required under the Older Workers' Benefit Protection Act for "exit incentive or other employment termination programs."
  1. Exit Interviews.

Exit interviews for voluntary quits can provide important information for the employer. In addition to helping an employer track and understand why employees leave, an exit interview may reveal existing or potential trouble spots, identify possible causes of action, and possibly provide information that will help the employer in any subsequent administrative or judicial action brought by the employee. At the exit interview, employers should:

  • keep notes of who attended, what was said, and the time and location of the interview
  • have documents regarding final pay, vacation pay entitlement, and any unfinished business -- e.g., 401(k), pension, COBRA, references, outstanding expense account or commissions
  • document the return and receipt of all company property
  • document covenants not to compete and confidentiality agreements
  1. Post-Termination Notifications.

Assure required notices are given:

  • COBRA -- Group Medical Insurance
  • Worker Adjustment and Retraining Notification Act (WARN) (employees' local government and labor unions must be notified 60 days prior to employment loss in defined circumstances)
  • life insurance conversion -- governed by state law
  • pension and 401(k) plan -- Notice to plan administrators; roll-over" rights
  • 401(k) plan
  1. Retention.

Human resource professionals are often asked how long employment records should be retained. Employers should maintain some records in case they face an audit or litigation involving present employees, past employees, or applicants for employment.

As a general rule, employment application information should be kept for at least one year, and other employee records should be kept for three years. Specific rules regarding the retention of records are enumerated below.

Attendance records. Almost all employers maintain attendance records for their employees. Likewise, a uniformly enforced attendance policy is an integral part of most employers' policies and procedures. However, employers may not be aware of the numerous statutory considerations that affect the maintenance of attendance records.

Title VII of the federal Civil Rights Act of 1964 requires the maintenance of attendance records for a period of one year after preparation. If a discrimination charge is filed, these reports must be maintained for the charging party until the final disposition of the charge. Both the Age Discrimination in Employment Act (ADEA) and the Fair Labor Standards Act (FLSA) require the maintenance of attendance records for a period of three years after preparation. If a discrimination charge is filed, the ADEA requires these records to be maintained for the charging party until the final disposition of the charge.

The Americans with Disabilities Act (ADA) requires employers to maintain records concerning disabilities for a period of one year. The ADA also requires employers to maintain records concerning requests for reasonable accommodations for one year from the date of the request. Executive Order 11246, which applies to employers with federal government contracts of at least $10,000, imposes recordkeeping obligations on employers with at least 50 employees and $50,000 in federal government contracts. These employers must keep information on all applicants for employment indicating their disability status and requested position for one year after a hiring decision based on the particular application.

Employee history records. Employee history information, such as previous employment experience, should be maintained by employers. Title VII, the ADA, and the ADEA require that employee history records be maintained until one year after creation. If a discrimination charge or lawsuit is filed, these records should be maintained until resolution of the charge or suit. These retention periods will allow the employer the opportunity to use any false or misleading information as "after-acquired evidence" in any discrimination or wrongful discharge case. Further, employee history records may be relevant to the issue of damages in a lawsuit by a former or current employee.

Conclusion

Documents created in the employment relationship will often govern the ability of the employer to defend employment decisions. Accuracy, completeness, and timeliness will be critical to the employer's ability to communicate effectively and successfully as it makes, and defends, those decisions.

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