Not so incredibly, courts are seeing a breach of an “implied contract” for failure to follow a progressive discipline policy in employee handbooks. This is consistent with the number of reported cases in the country in recent years in which employers have been found to have breached implied contracts with employees for failure to follow other personnel policies. To minimize exposure to liability with respect to progressive disciplinary action procedures, employers should consider the following:
Do not include the progressive disciplinary procedure in the employee handbook. The purpose of a progressive disciplinary policy is to provide guidelines to employees and supervisors in connection with the administration of discipline. The more widespread the dissemination of the policy, the more likely that employees will rely on the policy and will challenge the employer’s actions if not followed perfectly.
Employers should include a discipline statement in their handbook which states: “If your job performance, conduct or demeanor becomes unsatisfactory in the sole judgment of the company, based on violations of any of the company’s policies, procedures or rules, you may subject yourself to corrective action, up to and including dismissal.”
Employers who implement progressive disciplinary action procedures should include such procedures in their manuals: “The following is a list of steps that supervisors may follow in administering corrective action. However, these are guidelines only and any deviation from the ‘steps’ of this process may be initiated at the company’s sole discretion, dependent upon the nature or severity of the offense involved.”
Such rule of conduct should be disseminated to employees, with the caveat that they are guidelines for corrective action and do not imply any sort of contract/guarantee with the employee.
As a result of the numerous “at-will” decisions that have arisen in recent years, employers must avoid creating such warranties with their employees. Therefore, they must ensure that they sanitize the policies and procedures that appear in handbooks and manuals to preclude either (a) inadvertent creation of a promise, or (b) a restriction on their right to take action against an employer.