Navigating Employee Disciplinary Issues: Assess Your Discipline Policies to Avoid Unnecessary Headaches

Equipment Dealerships face a number of employee discipline issues throughout the year. Handling these matters effectively helps dealerships mitigate legal risks arising out of various state and federal laws which are designed to protect employees from unlawful discrimination. The first key to effective employee discipline is a well written discipline policy.

Equipment Dealerships face a number of employee discipline issues throughout the year. Handling these matters effectively helps dealerships mitigate legal risks arising out of various state and federal laws which are designed to protect employees from unlawful discrimination. The first key to effective employee discipline is a well written discipline policy. When constructing or updating an employee discipline policy, keep the following best practices in mind:

  1. The policy should be specifically tailored to your dealership. Use clear, plain language and make sure that there is a designated person who can answer questions about the policy. Employees cannot be expected to follow rules that they do not understand. Make sure that the policy includes language that states the employer retains the right to change the policy at any time based upon existing business needs.
  1. Make your dealership discipline policy accessible. Dealerships should make policies, including but not limited to a discipline policy, available to employees. When updates are made to policies, employees should be notified. Annual redistribution of all employee policies, whether in paper or electronic form, is recommended. Dealerships should obtain a signed acknowledgment that each employee has received the policy. The acknowledgement should be maintained annually within the employee’s personnel file to demonstrate that the employee was regularly notified of policy changes.
  1. Train employees regularly on key policies, including discipline. I recommend that businesses have annual training on key employer policies, including the discipline policy, so that the business has clear documentation that the employee was aware of the policy and had the opportunity to raise any questions about the implications of the policy. The employer should keep detailed records demonstrating which employees attended the training session as well as the materials that were covered and/or distributed to the employees. If a lawsuit is filed, this allows the employer to demonstrate that the claimant/employee was trained on the business policy and that they failed to follow it.
  1. Make your policy flexible but fair. Private employers generally do not have to provide any specific “due process” to their employees (absent contradictory terms in an employment contract or collective bargaining agreement). If a lawsuit is filed, however, juries and judges will look more favorably upon an employer who appeared to “do right” by their employees. Make sure your policy gives you the ultimate discretion to address unique situations but ensure that the policy is implemented in a way that is fair and uniform. Perceived favoritism and unfair treatment are often the basis for lawsuit.
  1. Ensure that you do not waive at-will employment by implementing an overly regimented discipline policy. Discipline policies which are overly restrictive as to the employer’s duty to provide “due process” or which only allow discipline in a progressive manner may constitute an inadvertent waiver of at-will employment status. For dealerships operating in at-will employment states, a progressive discipline policy is not generally recommended. Dealerships should include language which specifically states that the policy is not intended to waive at-will employment status.
  1. Ensure that your policy does not impose discipline for conduct that is protected by applicable laws. Discipline policies should be drafted so that they do not inadvertently violate state and federal employment statutes.

Please note that this article is a general summary only and does not attempt to cover your specific situation or detail the legal obligations you have under your state or provincial laws.  Before determining a course of action, we encourage you to review this with the attorney of your choice for a specific assessment of your situation. Natalie Higgins is General Counsel for the Equipment Dealers Associations. If you have any questions about this article and how you can improve your dealership’s discipline policy, you can reach Natalie at nhiggins@equipmentdealer.org.  Among other benefits, EDA members are eligible for 1- hour of free legal consultation with Natalie.