DISCIPLINIG AND FIRING EMPLOYEES

John R. Panico, Esq.    

PANICO LAW LLC

 

 

1. INTRODUCTION AND GENERAL CONCEPTS

 

1. Introduction

 

The Goal in ending any employment relationship should be termination without litigation. However, terminating the employment relationship is often akin to walking a minefield full of litigation traps. It is of the utmost importance that those responsible for making the termination decision are keenly aware of what the traps look like. The purpose of this section is to provide a ‘road map’ of the litigation minefield so terminations can indeed occur without a lawsuit.

 

This section addresses important pre-termination considerations and then goes through the mechanics of the termination process focusing on the most common pitfalls.

 

Before we dive into this head-on, regarding discipline and discharge, some simple key concepts are listed below.

 

1. Employment-at-Will

 

Absent contractual, statutory, or other limitations, an employer has the right to terminate the employment relation with or without cause, at any time, with or without notice.[1] This concept is known as the employment-at-will doctrine. Notwithstanding this doctrine, an employer who terminates the employment relationship for an impermissible reason (e.g., sex, race, age [2]) may be held liable for back pay, front pay, compensatory and punitive/liquidated damages, attorney and expert fees, as well as possible reinstatement of employment (The “R” word).[3]

 

 

1. Constructive Discharge

 

Somewhere between a quit and a discharge lies the concept of ‘constructive discharge’. An employer can be said to have constructively discharged an employee “only if it ‘makes an employee’s working conditions so intolerable that the employee is forced into an involuntary resignation’”[4]. For example, a manager who says, "I'm going to make your life here so miserable you'll quit," then proceeds to do just that, has probably constructively discharged the employee. Sometimes, constructive discharge takes place because of unsafe working conditions, constant harassment or a hostile work environment based on race, sex, age, etc. At some point, the employee can't take any more and quits.

 

1. Layoffs

 

An employee who is laid off may be recalled to employment. Layoffs carry with them the possibility, although not necessarily the promise, of recall to employment, With the passage of time, a layoff may ripen into a de facto termination, particularly if, under the terms of an applicable contract, the employee loses seniority rights due to the length of the layoff.

 

Collective bargaining agreements, personnel policies, and employee handbooks can govern selection for employee layoffs. Absent such express commitments, employers have discretion in selecting employees for layoff and establishing layoff criteria (e.g., length of service, performance, skill level, etc.).

 

1. Individual Liability.

 

1. Title VII/ADA

 

Individual decision makers are not liable under these federal laws, [5]

 

1. FMLA

 

Under the Family and Medical Leave Act an individual decision maker have been held personally liable for terminations which violate the FMLA. This same rational could apply to age [6] under the ADEA since its language, like that of the FMLA, borrows from federal wage and hour law (i.e., FLSA).  

1. PRE-TERMINATION CONSIDERATIONS

 

1. Contractual Limitations on an Employer’s Right to Lawfully Terminate

 

1. Contracts

 

1. Collective Bargaining Agreements

 

1. Just Cause Requirements [7]

 

[I]t is common to include the right to suspend and discharge for ‘just cause’, ‘justifiable cause’ ‘proper cause’. There is no difference between these phrases. These exclude discharge for a mere whim. They are, obviously, intended to include those things for which employees have been traditionally fired. They include the traditional causes of discharge in the particular trade or industry, the practices developed in day-to-day relations of management and labor, and most recently decisions of courts and arbitrators. They represent a growing body of ‘common law’ that may be regarded either as the latest development of the law of ‘master and servant’ or, perhaps, more properly as part of a new body of common law of management and labor under collective bargaining agreements. They constitute the duties owed by employees to management and, in their correlative aspect, are part of the rights of management.

 

1. Two Classes of Offenses: “Cardinal” vs. “Other”.

 

Offenses are of two general classes: (1) those extremely serious offenses such as stealing, striking a supervisor, insubordination, falsification of documents, etc., which usually justify summary discharge without the necessity of prior warnings or attempts at corrective discipline; (2) those less serious infractions of rules or policies such as absenteeism, poor job performance, minor safety rule infractions, etc., which usually don’t call for a discharge on the first offense (and usually not even on the second or third) but at some lesser penalty aimed at correcting behavior.

 

1. Individual Written Employment Agreements

 

Absent a specified term, employment agreements are terminable at will. A contract that refers to an employee’s compensation as an amount per day, week month or year remains terminable at will, absent a separate statement specifying the contract’s duration. Termination of an employment agreement in violation of its terms and conditions creates potential damage liability, generally for wages and benefits due under the contract and the employees job search and relocation expenses.

 

1. Oral Agreements

 

Oral employment agreements for an indefinite term are valid contracts. Oral agreements for a specified term exceeding (1) year, however, fail to comply with the Statute of Frauds and are unenforceable.

 

1. Written Polices and Employee Handbooks

 

1. An employer’s written personnel policies, handbooks and manual may create enforceable contracts.

 

• Use Contract Disclaimers
• Prominent in Bold Type
• For informational Purposes Only/Not a contract
• Employment-at-Will
• Limited Effect of Oral Modifications
• Beware of mandatory language, e.g., “May” vs. “Will”
• Avoid promises
• Beware of “permanent” employment concept; implications from use of terms such as “probationary period” or “permanent/temporary” employee.
• Give right to modify
• If your handbook is in need of revision, be careful. (New handbooks with disclaimers cannot stop contract claims by a number of employees downsized in a RIF based upon a prior handbook that was in effect at the time of hire. To be effective, new handbooks have to satisfy contract law on modifications of an existing contract, i.e., valid modifications would require (1) offer, (2) acceptance and (3) consideration.

 

1. Statutory Limitations on An Employer’s Right to Lawfully Terminate

 

1. Equal Employment Laws

 

1. Federal and State law, and in some municipalities, ordinances prohibit employers from terminating the employment relationship based on certain protected characteristics (i.e., race, color, sex, age, sexual orientation, disability, ancestry, criminal history, military duty.

 

1. Whistleblower/Anti-Retaliation Laws.

 

1. A variety of state and federal law protects an employee who opposes an illegal act, files a complaint with a governmental agency, cooperates in government investigations, or testifies in legal proceedings. Referred to as whistleblower statutes, these statutes prohibit employers from discharging or otherwise discriminating against an employee who takes such protected activity.

 

1. Examples of Laws Protecting Conduct.

 

1. Family and Medical Leave Act (FMLA);
2. Title VII of the Civil Rights Act;
3. Occupational Safety & Health Act (OSHA);
4. Employee Polygraph Protection Act;
5. National Labor Relations Act (NLRA);
6. Americans with Disabilities Act (ADA);
7. Veterans Reemployment Act;
8. Workers Compensation Act.

 

 

 

1. DISCIPLINE

 

1. Goals to Be Achieved by Effective Disciplinary Procedures.

 

1. To eliminate disciplinary problems in advance as mush as possible by letting employees know what offenses will be punished and what steps will be taken.

 

1. To increase employees’ sense of job security by reassuring them that discipline will be applied only for cause and, even then, only according to accepted industry practices within the limitations of the law.

 

1. To protect employees from unsafe actions of co-workers.

 

1. To assure all employees that basic disciplinary procedures will be applied uniformly;

 

1. To provide employees with an opportunity who violate the rules to improve by letting them know what specific actions they should need to take to meet behavioral and performance standards;

 

1. To assure the vast majority of employees who have no disciplinary problems are dealt with fairly.

 

1. Discipline Checklist.

 

1. Does management know all of the facts?

 

1. Is the rule that has been violated a reasonable one?

 

1. Did the employee have knowledge of the rule, or should s/he reasonably should have known it?

 

1. Has the rule been strictly enforced in the past (i.e., ‘laxed enforcement)? If not, what recent notice to employees warned of a crackdown on violation of certain rules?

 

1. In this instance, is it a reasonable rule that is being applied?

 

1. Is the employee guilty of the violation or only guilty by association with another?

 

1. Can the employee’s guilt be proven by direct, objective evidence, or is the evidence circumstantial or hearsay?

 

1. Does the employee have a reasonable excuse for the infraction of the rule?

 

1. What is the employee’s record of past violations, warnings, discipline, etc.?

 

1. Is the employee receiving the same treatment as others received for the same offense?

 

1. Does the punishment fit the crime?

 

1. If a supervisor is pressing the disciplinary action, is s/he level-headed, fair and impartial, and without malice toward the employee involved?

 

1. Has an impartial management representative reviewed the facts and approved the discharge?

 

IV        TERMINATION

 

1. The Method of Termination

 

1. Publish a non-exclusive set of standards of conduct and performance expectations which places all covered employees on notice that they may be subject to discipline and/or dismissal for violation of such standards.

 

1. Do not allow employees to be ‘discharged on the spot’. All terminations should be reviewed by a member of management at least one level above the direct supervisor. If it is necessary to remove the employee from the workplace, allow the supervisors to immediately suspend the employee pending a review of the matter. If it is determined that discharge is warranted, convert the suspension into a termination. If it is determined that dismissal is not appropriate, notify the employee to return to work, with or without pay as the situation requires.

 

1. There should be an independent review of the proposed dismissal. In this regard, the employer may consider designating one specific member of management at each work location to make an independent review of each proposed dismissal before it is implemented.

 

1. To be effective, the person conducting the independent review should be well-versed in both HR law and the employer’s policies and procedures. Ordinarily, an HR or employee relations professional would be best suited for this role.

 

1. The procedure should require a thorough investigation of the facts relating to the dismissal. A termination should not be premised upon supposition and inference.

 

1. Allow the employee an opportunity to present their side of the story before making a final decision, or in the alternative, allow the employee to present a written statement. Careful notes should be taken by management. The employer should carefully consider the employee’s position and, if further investigation is warranted, such investigation should take place prior to making a final decision.

 

1. An employee’s length of service with the employer and prior record should be reviewed and considered as part of the termination process. The better work record and longer the employee’s service with the company, the more reluctant the company should be to dismiss the employee. However, certain serious rule violations warrant immediate discharge regardless of prior history with the employer.

 

1. Consideration should be given to alternatives to dismissal, such as transfer, suspension, demotion, warnings, or resignation in lieu of termination.

 

1. Employers should provide for some internal system to ensure consistent treatment of employees under similar circumstances. Like cases should be treated alike.

 

1. Be sensitive to public issues. If, for example, an employee who is recommended for termination has some form of pending charge or claim against the company, such as an EEOC charge of discrimination or workers compensation claim, the employer should review the situation carefully to assure both (a) the termination is unrelated to the filing of the charge, and (b) under all circumstances the proposed termination however well-intended, does not appear to be retaliation.

 

1. Inquiry should be made as to whether all company policies and procedures have been followed, including the employer’s progressive disciplinary procedure, if one exists.

 

1. Documentation

 

1. No documentation is better than poor documentation

 

1. Just the facts

 

1. Witness Statements -not opinions. WHO, WHAT, WHERE, & WHEN

 

1. Always focus on legitimate business reasons for the employment action

 

1. Focus on legitimate business reasons for any discipline

 

⇒   Note specific, verified facts

 

⇒   Tell the whole story – get employee’s side, too

 

⇒   Identify the rule violated

 

⇒   Note previous incidents

 

⇒   Describe the effects of the misconduct on the business

 

⇒   State future expectations

 

⇒   State what the consequences of future violations will be

 

⇒   Be careful to date the document and identify yourself as the author

 

⇒   Have the employee sign and date the document or note that the employee refused to sign. (Practice tip: Place at bottom of document the following language: “The employee’s signature below indicates that the employee has received a copy of this notice; and the employee’s signature below does not constitute an admission of wrongdoing”

 

⇒   Treat the document as confidential and make sure it is legible

 

⇒   Have a third party review the document

 

⇒   Interview and obtain signed statements from witnesses

 

⇒   Obtain a signed employee statement

 

1. Severance Pay, Separation Agreements and Releases

 

1. Severance pay without a release – BAD IDEA

 

1. Because of the explosion in discrimination and wrongful termination claims, many employers require an employee to sign a release and waiver as a condition of receiving a severance to settle an asserted claim growing out of the employment termination.

 

1. There are situations where it is well-advised to obtain a settlement agreement and a release from an employee who has been terminated. This is especially true where there is reason to believe that the terminated employee may challenge the dismissal. In such a situation, the payment of additional benefits may be merited to avoid the cost and inconvenience of litigation, as well as the potential risk of loss should the employee prevail

 

1. In many situations the employer wants to provide some assistance to employees who are being terminated, especially when the person is a long-term employee who is being discharged not for misconduct, but for deteriorating job performance or when termination is the result of a restructuring or downsizing. In those situations, employers often provide continuation of salary and benefits for a period of time.

 

1. It is a good idea to formalize agreements between the discharged employee and the employer in a separation agreement. In return for granting benefits to the employee, the employer should obtain a full release from the employee of any and all claims the employee may have against the company. Often employers are reluctant to formalize these agreements in a separation agreement, especially one which contains a release, because there is concern that by presenting such a document to the employee it might suggest that the employee has a potential claim against the company. Although this is a possibility, there is data to show that this is the case. On the other hand, there are many cases in which employers have provided benefits to employees without a separation agreement and release, and commenced litigation challenging the termination, and the severance payment you made may well have been the lawyer’s retainer. Even if the employer ultimately prevails, they will have expended substantial sums defending these lawsuits.

 

1. Another advantage to the employer attempting to obtain a formalized separation agreement is that the employer will become aware of those dismissals that will be a problem right when the termination occurs. Lawsuits can take a long time to get to trail. It can be very difficult to reconstruct the facts, gather evidence, and locate witnesses to an event several years after the fact. In most situations, it is to the benefit of all parties to have a complete resolution of all issues at the time of dismissal. Should an employee refuse to sign the separation agreement and release, at least the employer can prepare for the very real possibility of a lawsuit at the time when the facts are fresh and the evidence and witnesses are available.

 

1. Sample Release

 

NOTICE

 

THE SAMPLE AGREEMENT SET FORTH BELOW IS FOR PURPOSES OF DISCUSSION ONLY. YOU SHOULD CONSULT WITH COMPETENT LEGAL COUNSEL PRIOR TO USING ANY SEVERANCE AGREEMENT OR OTHER RELEASE.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sample Employee Separation Agreement

 

            This Agreement, made and entered into between JOHN DOE, employee (hereinafter ‘Employee”), and ABC COMPANY, (hereinafter “Company”).

1. Employee is employed at Company;

 

1. Employee is willing to tender his voluntary resignation from employment with Company and to waive all rights with respect to any matter arising out of, or in connection with his employment with Company;

 

1. Company is willing to accept such resignation, and will provide Employee with additional compensation to employee as set forth below:

 

NOW THERFORE, in consideration of the mutual covenants of the parties hereto, IT IS AGREED:

1. Employee herewith voluntarily resigns from employment with the Company effective ______________, 20____.

 

1. Employee expressly waives any and all rights with respect to any and all matters relating to or in connection with his employment with Company which he now or hereafter may acquire and agrees not to initiate any action, legal or otherwise, against the Company or any successor or assign or any other employee, agent or representative of the Company.

 

1. Company agrees not to contest or object to any claim for unemployment compensation benefits by employee based on his employment with the Company so long as Employee is out of work and otherwise eligible for such unemployment benefits.

 

1. Company agrees to pay to Employee _____________________, minus all applicable tax withholdings, and Employee hereby acknowledges receipt of same.

 

1. Relative to any reference for future employment, Company agrees to provide Employee with a neutral reference (i.e., dates of employment and position(s) held).

 

Executed this __________day of __________________, 20________

 

 

 

__________________________                          _____________________________

Employee                                                              Company                                 Title

 

 

 

1. Common Pitfalls When Terminating Employees

 

1. Discharging with conducting a proper investigation

 

1. Failure to follow company policies and procedures

 

1. Terminating an employee without a witness present

 

1. Failure to properly document events

 

1. Failure to obtain proper medical documentation

 

1.  Failure to consider reasonable accommodations

 

1. Failure to communicate with employees out on leave

 

1. Failure to have a union representative present (Union facility only)

 

1. Unnecessary publication of the reason for discharge

 

1. Not calling a termination a termination (Use of the term layoff)

 

1. Failure to properly investigate claims of sexual harassment and failure to take prompt remedial action

 

1. Poor documentation

 

1. Ineffective release/severance pay without release

 

1. Termination Checklist

 

1. Are reasons for termination established               ___Yes            ___No

 

1. Did I gather enough facts                               ___Yes            ___No

 

1. Did I perform a full investigation                   ___Yes            ___No

 

1. Did I have performance evaluations to

support my decision                                        ___Yes            ___No

 

1. Has the employee been given a chance to

Explain his/her conduct                                  ___Yes            ___No

 

1. Is the file documented                                    ___Yes            ___No

 

 

 

1. Did I give the employee prior warning

of disciplinary action                                      ___Yes            ___ No

 

1. Have other employees been disciplined

similarly in the past                                              ___ Yes           ___ No

 

1. 1. Is there a business reason if others

have not been treated the same in

The past                                                          ___ Yes           ___ No

 

1. 1. Have other employees with similar

problems been treated less severely                ___ Yes           ___ No

 

1. Have I followed the Company’s procedure

For termination                                                     ___ Yes           ___ No

 

1. 1. Have I followed the company handbook        ___ Yes           ___ No

 

1. 1. Have I discussed the decision with HR          ___ Yes           ___ No

 

1. Have I made the decision to terminate                 ___ Yes           ___ No

 

1. 1. Can I communicate the decision

tactfully                                                           ___ Yes           ___ No

 

1. 1. Do I know all the facts                                   ___ Yes           ___ No

 

1. 1. Have I kept the incident confidential             ___ Yes           ___ No

 

1. 1. Have I prepared the final paycheck                ___ Yes           ___ No

 

1. 1. Have I prepared a COBRA notice                  ___ Yes           ___ No

 

1. 1. References                                                      ___ Yes           ___ No

 

1. Within the first 30 seconds of the meeting tell the employee that s/he is being terminated. Don’t drag out the announcement

 

1. Explain the reason briefly and clearly

 

1. Avoid counseling at this point – you’re way past that

 

1. Do not complement the employee in an effort to soften the blow

 

1. Don’t fail to give a reason for the termination consistent with the truth. In some cases, failing to state the reason that are inconsistent with those stated later have been held to be evidence of discrimination

 

1. The decision to termination SHOULD NOT be based on a discriminatory reason. There should be business related reason for the termination. When an employer is firing an employee - who has filed a claim; a pregnant woman; an older employee; a minority employee; or some other employee where the potential problem of a subsequent claim or lawsuit is obvious, it is essential that the person conducting the conference do not make any reference to anything which could be construed as discriminatory towards the employee.

 

1. During the termination conference never make any reference to any prior claim, sex, age, race, disability, religion, ancestry, FMLA leave, workers comp claim

 

1. Be organized and prepared

 

1. Take brief notes. After the meeting make detailed notes to the file.

 

1. Establish a procedure to retrieve company property, and the same for the employee to recover their property. Plan ahead if security measures are needed.

 

1. If the termination is voluntary try to obtain a signed resignation letter from the employee which states the reason(s) for leaving. This later prevents the ‘change of heart’

 

1. Do this with dignity and respect

 

1. Be sure the procedure employed is consistent with that which is generally used.

 

1. Top 10 Reasons Why Employers Are Sued

 

1. Disparate Treatment – terminating an employee over conduct for which other employees are not terminated

 

1. Misinformation – Termination based on a poor investigation, insufficient or inaccurate facts

 

1. Insensitivity – Termination that humiliates the employee into seeking revenge through lawsuit

 

1. Poor Documentation – termination where little or no documentation exists or where documentation is not shared with the employee, particularly with poor job evaluations or instances of cumulative reasons

 

1. Unilateral “Crack Down” – termination after the employer decides, unilaterally, to get tough on misconduct or unsatisfactory performance that has been tolerated in the past.

 

1. No Warning – termination for things the employee did not know would cost him/her their job

 

1. Poor Timing – termination well after the misconduct has occurred, or terminating (even for legitimate reasons) shortly after an employee engages in some form of protected activity

 

1. Miscommunication -- failing to tell the employee why they were discharged, or calling the termination something else i.e., “layoff”

 

1. Wrongful Termination – a termination so blatantly unlawful  

 

1. The Litigious Employee – some people simply will not accept responsibility for their actions and blames the employer.

 

V         ALTERNATIVE DISPUTE RESOLUTION (“ADR”)

 

1. Common Types of ADR

 

1. Arbitration

 

1. Mediation

 

1. Law Regarding Arbitration

 

1. Individual agreements to arbitrate statutory claims are enforceable if “knowing and voluntary. [8]

 

1. Benefits of ADR

 

1. Quicker

 

1. Cheaper

 

1. Confidential

 

1. Affords the parties the same statutory protections as in a court of law

 

 

 

Dispute Resolution Policy

 

            Differences occasionally arise between employees and the Company. Most of these differences are resolved through the Company’s ‘Open Door Policy’ or informal discussions. In rare instances where informal discussions and the Company’s internal procedures do not produce a mutually satisfactory result, litigation has been the only recourse to resolve these differences. Unfortunately, litigation is expensive and time consuming for all parties. We believe there is a better way of resolving such disputes: a two-step dispute resolution process utilizing mediation and arbitration which is independent, fair and equitable for all parties.

 

            This policy, which is a condition of the application process and continued employment with the Company, is binding on the Employee and the Company. Under this policy, all covered claims and disputes between the Company and the Employee which are not resolved through the Company’s internal procedures, shall be resolved through mediation and, if necessary, binding arbitration. The mediation and arbitration will be conducted by an independent, respected, and neutral third party, The American Arbitration Association (“AAA”).

 

Claims and Disputes Covered by This Policy

 

            The disputes covered by this Policy include any claim under applicable state or federal statutory law the Company might have against the employee, (e.g., theft of company property, misuse of company information and fraud). Also included in any claim under applicable state or federal statutory law the Employee might have against the Company, including but not limited to: wage claims, breach of any contract, violation of public policy, negligence, intentional torts, any alleged exception to Workers Compensation law, defamation, all forms of unlawful discrimination and retaliation (including but not limited to, race, color, sex, religion, national origin, disability or age); denial of fringe benefits, violation of any state or federal law, statute, regulation, or ordinance; and, any other matters arising under common or statutory law. Disputes cover by the Policy shall also include any claim an employee might have against any officer, director, manager, employee or agent of the Company, or any of the Company’s subsidiaries, divisions or affiliates, if that claim in any way arises out of or relates to the application process, the employment relationship, or the termination of the employment relationship.  It is the intent of all parties to submit to mediation and arbitration, to the fullest extent permitted by law, all covered disputes and claims the Company might have against the employee and all covered disputes the Employee might have against the Company. Because this Policy promotes mediation and arbitration as the exclusive remedy for claims and disputes covered by this policy, the Company and the Employee agree to be bound by those laws best promoting the enforceability of mediation and arbitration agreements, including the Federal Arbitration Act, federal common law, and any applicable state laws promoting arbitration.

 

Claims and Disputes Not Covered by This Policy

 

            Claims and disputes not covered by this Policy include:

 

• Claim(s) for Workers Compensation Benefits pursued through a State Administrative Agency;
• Unemployment Compensation Benefits
• Retaliation under 18 U.S.C § 1514A (Sarbanes-Oxley Act)
• Claims under the Company’s Employee Welfare and Benefit Plans which provide for their own dispute resolution procedures

 

Except as otherwise required under applicable law, the Employee and the Company agree that: class action, collective action and representation action procedures shall not be asserted, nor will they apply in any proceeding under this Policy. Neither the Company nor the Employee will assert class action or representative action claims under this Policy; each shall only submit their own, individual claims under this Policy and will not seek to represent the interest of any other person or entity.

 

Unless prohibited by law, both the Company and the Employee retain the right to file, in a court of competent jurisdiction, an application for provisional or preliminary injunction. The filing of such application shall not operate as a waiver of the right or obligation to mediate and arbitrate claims and disputes covered by this Policy, including any claims relevant to the application for preliminary injunctive relief. Although a court may grant or deny provisional or preliminary equitable relief, only the Arbitrator shall have the sole authority to grant final damages, including monetary damages, declaratory relief, permanent injunctive relief, and any other final equitable remedy permitted by law.

 

Also exempt will be any dispute, governed by an express written agreement between the Company and the employee, which specifically provides for judicial or other form of dispute resolution.

 

Applicable Mediation and Arbitration Rules

 

            The American Arbitration Association (AAA) is a world-wide, public service, non-profit organization which offers a wide-range of unbiased dispute resolution services. Because of the AAA’s experience in mediating and arbitrating employment and labor disputes, the Company and the Employee shall be subject to the AAA’s Employment Dispute Resolution Rules. Copies of these rules may be obtained from the Human Resources Department or from the AAA at www.adr.org.

 

Mediation

 

            If a dispute arises between the Company and the Employee, the parties must first attempt to resolve the dispute through mediation by the AAA. In the event the mediation results in a resolution of the dispute, the parties will reduce their agreement to writing at the conclusion of the mediation. Such a written settlement shall be enforceable as a stipulated judgment in any related and subsequent arbitration proceeding subject to the confidential terms noted below.

 

            All statutory and common law provisions which protect the confidentiality of the mediation process will be honored by the parties, the mediator, and parties representatives. Absent a court order to the contrary, no party, their representatives or the Mediator, will violate the confidentiality afforded to the mediation process.

Arbitration

 

            If the dispute is not resolved through mediation, the dispute shall be resolved by exclusive, final and binding arbitration by the AAA before a single neutral Arbitrator, who is a member of the Indiana Bar, who is knowledgeable in employment law, who shall follow applicable state and federal law, and whose decision shall be final and binding on the Employee and the Company. Judgment of the award rendered by the Arbitrator may be entered in any court of competent jurisdiction.

 

Fees and Expenses

 

            As a benefit to employees, the Company will pay all of the expenses and fees of the Mediator, as well as AAA’s administrative fees. The Company will pay all of the expenses and fees of the Arbitrator, including AAA’s administrative fees.

 

Right to Legal Representation

 

            The Employee and the Company have the right to be represented by legal counsel during any phase of the mediation/arbitration process. The expense of such representation shall be the sole responsibility of the party retaining legal counsel. This provision does not limit the right of either party to recovery attorney fees and costs under applicable law.

 

Time Limits

 

            To ensure the timely resolution of disputes, the Company and the Employee are encouraged to file a Request for Mediation as soon as possible. In the case of a claimed statutory violation, the time limits imposed by statute will govern. If a statutory violation is not claimed, then the Request for Mediation must be filed within 90 calendar days after the claim accrued unless a different period is specified in a written agreement between the Company and the Employee. The failure of either the Company or the Employee to file a Request for Mediation within these time limits will forever bar any claim involving that dispute.  Should mediation not resolve the dispute, the party who desires to go to arbitration is required to file a Request for Arbitration within 90 calendar days after the termination of the mediation process. The failure to file of either the Company or the Employee to file a Request for Arbitration within these time limits will forever bar any claim involving that dispute. The Arbitrator shall have to sole authority to decide whether or not a Request for Mediation and/or Arbitration has been timely filed.

 

Arbitrator

 

            The Arbitrator will be independent and impartial, and no person shall serve as an Arbitrator who has any financial interest in the result of the proceeding. The Arbitrator shall immediately disclose and potential conflict of interest. Either party may request disqualification of the Arbitrator for the same reasons as a federal judge is subject to disqualification. When an arbitrator has been challenged, the other party may agree to the challenge, or the Arbitrator may voluntarily withdraw. If neither agreed disqualification, nor voluntary withdrawal occurs, the challenge shall be decided by the AAA, and their decision shall be final and binding.

            In selecting an Arbitrator, the AAA shall be required to send to each party an initial list of five (5) potential arbitrators. If for any reason an appointment cannot be made from this list, the AAA shall send the parties a second list of five (5) potential arbitrators. If for any reason an appointment cannot be made from the second list, the AAA shall have the power to make an appointment from among other members of the panel without submission of an additional list. If for any reason an Arbitrator is unable to serve, the AAA may declare the office vacant and the vacancy will be filled according to the procedures set forth above.

 

Discovery

 

            The scope of discovery shall be governed by the AAA’s rules for the Resolution of Employment Disputes. Any disputes regarding discovery shall be decided by the Arbitrator and the Arbitrator may grant, upon a showing of good cause, either party’s request for discovery in addition to or limiting that provided for in this policy.

 

Record

 

            To ensure that both parties have the opportunity to review a record of the arbitration, the Arbitrator will maintain, in cooperation with the parties, a record of the arbitration proceeding for a period of one (1) year after the arbitration award is issued. The record shall include all documents and exhibits produced in connection with the hearing, all briefs submitted by the parties, the award of the Arbitrator, a record of the arbitration hearing, and the written decision of the Arbitrator. A record of the arbitration shall be made by verbatim transcript, at the election of either party and expense of the Company. All aspects of the arbitration, including the record, are confidential and not open to the public unless both parties might otherwise agree in writing. The record is necessary for any subsequent proceeding between the parties, or the record is necessary to respond to an order of a governmental agency or the Court.

 

            In conducting an arbitration hearing, technical compliance with the rules of evidence shall not be necessary. However, applicable law with respect to privilege, including attorney-client privilege, work product, and offers of settlement shall be followed.

 

Damages and Relief

 

            Upon a finding that either the Employee or the Company has sustained the burden of persuasion as to the legally cognizable claim, the Arbitrator shall have the same power and authority (and no more) as would a judge in a court of law to grant monetary damages or other such relief (including attorney fees and costs) as may be in conformance with applicable principles of common, decisional, and statutory law. The Arbitrator has the same power and authority to grant summary judgment as would a judge in a court of law. The Arbitrator is empowered to enforce offers of judgment and similar statutory mechanisms. Both parties have a duty to miti9gate damages that might have been sustained. 

 

 

 

 

Employment Status

 

            This Policy shall in no way alter the “at-will” status of an employee’s employment. Nothing in this Policy will limit an employee’s right to resign employment with the Company, or the Company’s right to terminate the Employee’s employment for any reason.

 

Location

 

            Unless otherwise agreed to by the parties, any mediation and/or arbitration will take place in the county and State in which the dispute arose.

 

Non-Retaliation

 

            The Company strictly prohibits any form of retaliation against any employee who in good faith pursues a dispute under this Policy.

 

Change, Modification or Discontinuance

           

The terms of this Policy in effect at the time the dispute arose shall be binding on the parties. Otherwise, the Company reserves the right to change, modify or discontinue this Policy at any time upon prior written notice to the employee.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ACKNOWLEDGEMENT & RECEIPT OF

EMPLOYEE HANDBOOK

 

 

I hereby acknowledge receipt of XYZ Company Employee Handbook (Revised 00/00/0000). I further agree to comply with those policies and procedures found therein as a condition of my employment.

 

Date ________________                   ________________________________

                                                          Employee Signature

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LAST CHANCE AGREEMENT

 

            This Agreement made between _____________ (“Company”), ________________(“Employee”) on this __________ day of ___________ 20___.

            WHEREAS, ______________employment with the Company was terminated on ___________ because of Employee’s violation of the Company’s Work Rule __________, “Intentionally falsifying a company document when back-dating a production record.”

            WHEREAS, in consideration of Employee’s overall service with the Company, the Company is prepared to hold this termination of employment in abeyance subject to the following terms and conditions:

1. Employee will serve a disciplinary suspension without pay for the period of _____, from ___________ through and including ___________.
2. Employee will be place on probation for a period of ______ months; and should Employee violate any work rule (other than attendance) during this probationary period, Employee will be discharged from employment.
3. This Last Chance Agreement shall not establish a precedent. The Company reserves the right to use this LAST CHANCE AGREEMNT in any arbitration, administrative or quasi-judicial proceeding or in a court of competent jurisdiction in order to enforce the terms and conditions hereof.
4. Employee agrees that all known and unknown claims that s/he may  have against Company under the Age Discrimination in Employment Act (“ADEA”), National Labor Relations Act (“NLRA”), Title VII of the Civil Rights Act of 1964, American’s With Disabilities Act (“ADA”), Family and Medical Leave Act (“FMLA”), and/or any other federal, state or local law dealing with employment discrimination in connection with the instant matter, shall be settled and/or withdrawn with prejudice on the basis of the consideration enumerated herein.
5. Employee agrees to keep the terms and conditions of this LAST CHANCE AGREEMENT strictly confidential.
6.  Provisions of this LAST CHANCE AGREEMENT are severable, and if any part of it is found to be unenforceable, the other paragraphs shall remain fully valid and enforceable.
7. Any controversy or claim arising out of or relating to this LAST CHANCE AGREEMENT, or the breach thereof, shall be settled by Arbitration in accordance with the Employment Rules of the American Arbitration Association and judgment upon the award rendered by the Arbitrator may be entered into in any court of competent jurisdiction.

This Letter of Understanding and Agreement sets forth the entire agreement between the parties hereto and fully supersedes any and all prior agreements or understandings between the parties hereto pertaining to the subject hereof.

 

_____________________________                          ____________________________

Employee                                                                    Company

 

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