How Accurate Records Can Protect Employers Against Employment Claims

In today’s litigious environment, well-maintained records can serve as a strong defense against employment claims.

Extensive case law tells employers what evidence is used to prove what happened during the life-cycle of the employment relationship. Even though California is an at-will employment state, employers are still subject to claims of wrongful termination, retaliation, harassment, discrimination, and wage and hour violations. Proper record keeping and documentation, consistent with good employment policies, is the key to protection. To realize the benefit of consistent record keeping, employers should establish and maintain strict routine practices for documenting and confirming with each employee, each event related to the employer-employee relationship.

Good Cause

When deciding whether an employee’s separation was lawful, the Court will receive evidence from the parties. When there is an agreement, express or implied, for termination for good cause, the Court will consider evidence of “fair and honest reasons, regulated by good faith on the part of the employer, that are not trivial, arbitrary or capricious, unrelated to business needs or goals, or pretextual. A reasoned conclusion, in short, supported by substantial evidence gathered through an adequate investigation that includes notice of the claimed misconduct and a chance for the employee to respond.” [1] The substantial evidence mentioned by the Court can be created by the employer as part of its regular policies, procedures, and record-keeping practices.

The employer should be able to show that it acted for a purpose relating to its business needs or goals, and not for wrongful reasons or motives. As stated by the Supreme Court of California in Cotran, “[t]he proper inquiry for the jury, in other words, is not, ‘Did the employee in fact commit the act leading to dismissal?’ It is ‘Was the factual basis on which the employer concluded a dischargeable act had been committed reached honestly, after an appropriate investigation and for reasons that . . . are not arbitrary or pretextual?’”[2]  When an employer has a record, it has more protection. Proof of facts exist in the documented policies and routine procedures. This means that, to create useful and protective evidence, employers must have good policies and practices and must document their training, communications of rules, expectations and duties, write-ups, notices, performance improvement plans and actions, and termination process extensively, transparently, and in tandem with the employee’s participation.

Exceptions to At-Will Employment

An employer may change the status of its intended at-will employment arrangement by using contradictory employment contracts or employee handbooks and policies. Evidence of an implied agreement to terminate only for cause, such as language in the employee handbook limiting the employer’s termination rights, can result in a change to the at-will status. This is true even when there is express language in the handbook stating the employment is at-will. For example, an employer’s policy to follow a certain write-up procedure, or give the employee a certain number of write-ups or warnings before a termination can occur, can change the at-will status to that of an implied agreement to only terminate for good cause.  An employer may also remain subject to a wrongful termination claim by an at-will employee if the termination violates a fundamental public policy. In these circumstances, too, following good policies with consistent, routine documentation and record keeping will be key to a solid defense against a wrongful termination claim.

Protecting Against Discrimination and Harassment Claims

Discrimination and harassment claims can damage an employer’s reputation, leading to negative financial impact on the business. Thorough documentation of hiring practices, promotions, disciplinary actions, and terminations can help demonstrate that decisions were based on merit and not influenced by race, gender, age, or other protected characteristics. In cases of alleged harassment, detailed documentation of complaints, investigations, and resolutions is vital. Employers must be able to show that, upon written notice by an employee, prompt and appropriate action to address the issue was taken by the employer. These records can serve as evidence that the employer fulfilled their duty to provide a safe work environment.

Promoting Organizational Consistency

Consistency in handling personnel matters is key to preventing claims of favoritism or bias. Proper and routine documentation can help to ensure that all employees are subject to the same standards and procedures, fostering a sense of fairness and equity. This can enhance employee morale and reduce the likelihood of grievances.

For example, if a company has a policy of documenting and addressing all instances of tardiness or absenteeism, maintaining these records uniformly, as a routine, across all employees can help to prevent accusations of selective enforcement. Consistency not only protects the employer, it also fosters a culture of accountability and trust within the organization.

Conclusion

The importance of routine, consistent documentation cannot be overstated. Personnel records are essentially the written transcript of an employee’s history with a company. By establishing a clear record of employment, an employer can significantly mitigate the risks associated with employment disputes.

Prioritizing accurate and consistent documentation will reap benefits beyond protection in the Court room because a transparent environment of clear communication is fostered. When employers closely follow well established and communicated policies, their employees are better prepared to succeed and attain the goals of the business. In the end, the diligence in record-keeping pays dividends, safeguarding the interests of both the employer and the employee.

[1] Cotran v. Rollins Hudig Hall Int’l, Inc. (1998) 17 Cal.4th 93, 108, 69 CR2d 900, 910.

[2] Id.