Swimming Naked: Disgruntled Employee Nightmares

Warren Buffet once said: “It’s only when the tide goes out, you find out who’s been swimming naked.” Once your business gets public attention, every wrong thing you’ve done will be scrutinized. If company human resource documentation is poor and inconsistent it’s possible that no one know until a disgruntled employee sues. Over the last 25 years I have seen the following scenario play out in a variety of unfortunate ways.

 Does this sound familiar?

You have a disagreeable hourly employee, Jane is 51. She’s technically competent but intimidates and verbally abuses both fellow employees and her supervisor, Tom. Tom does the best he can but when he attempts to confront Jane she cleverly manipulates him, exploiting his timid nature and lack of confidence. Over the last five years Jane’s performance evaluations have focused on her technical skills and have been fairly positive. About a year ago, Jane just began working more than 40 hours per week-even though company policy requires overtime be approved by the supervisor in advance. When confronted, she manipulates Tom into letting her to “volunteer” for a few hours each week without pay. Meanwhile, hardly a month goes by without a department employee in Tom’s office crying as a result of something Jane has said or done.

The situation changes

Unexpectedly, supervisor Tom gives his notice and leaves the company. New supervisor, Sally is hired and is immediately taken aback by Jane’s behavior. Jane’s peers sense the tide has turned against her so they begin disclosing Jane’s numerous offenses to Sally.  First, Sally meets with Jane and puts a stop to the extra weekly “volunteer” hours. Then she begins confronting Jane about negative employee relations with her coworkers as they occur. Jane is resentful and frustrated that her old tactics don’t work with Sally like they did with Tom. Her behavior escalates. Eventually Jane confronts her peers whom she assumes complained about her. These coworkers are unprepared and afraid of her verbal abuse.  Lacking the courage to confront her or support Sally so they back down. Seeing this accurately as retaliation, Sally documents Jane’s performance, her repeated performance counselings and about a month later, fires Jane. The office rejoices and even more horrifying stories surface when it’s clear Jane is gone for good. Sally used a good process and Jane is gone.

Legal action

About a week later a letter arrives from Jane’s attorney alleging wrongful discharge of a competent, long-service employee and failure to pay overtime earned every week for a year. Further, it is Jane’s position that Sally’s performance counselings in the last three months were conducted by an “abusive supervisor” who was not familiar with company routines and practices and who “targeted Jane unfairly.” The letter includes a settlement offer of $30,000 plus the overtime owed of $3,000 or Jane will file an age discrimination charge with the Maine Human Rights Commission and a Wage and Hour complaint with the Department of Labor. The letter also requests a copy of the personnel file.

Here’s the problem

There are several employer problems here. The employee is clearly owed overtime; supervisor Sally’s conduct while proper, represented a drastic shift from historical practice without any warning to staff of what was changing and why. This kind of culture shift tends to create disgruntlement. Though ineffectual, supervisor Tom was an agent of the company all those years. When Tom failed to confront Jane, he essentially sanctioned a company atmosphere where Jane’s behavior seemed acceptable. Further, it creates the impression that the new supervisor, Sally was mean or “too hard” on Jane. Jane’s peers, unprepared for her confrontation, seem to bolster the idea that Sally was in the wrong. Jane’s personnel file contains:

  • Five years of positive evaluations;
  • No documentation of the numerous, objectionable behaviors throughout the years;
  • No documentation about Tom’s confrontation regarding the extra hours;
  • Good documentation of the last 3 months of Sally’s performance counselings.

You’re busted!

The moment Jane’s personnel file is requested you can’t really go back and add newly created “historical” material. You may add a report dated in the present that contains  historical information but it  self-serving and will be viewed with suspicion, particularly if created after the file was requested.

There isn’t much of a viable defense here because your assertion that this employee has been disrupting the workplace for years is not backed up with documentation. This disagreeable person who disrupted the office and abused fellow staff can make a persuasive argument that Sally “had it in for” her and make it look like the company victimized her. Jane is likely to get some settlement and if that isn’t bad enough, her allegations may encourage other employees to scrutinize their over time – causing additional fallout.

Ten preventive strategies

These ten steps will protect your company from this outcome and create a healthier, more productive work atmosphere for your employees.

  1. Acknowledge when you are shifting the work policies and workplace culture, why the shift is happening and set specific behavioral standards with examples.
  2. Whenever employee behavior standards are discussed with staff, document the date and content of the meeting and who attended.
  3. Monitor supervisor competencies, evaluating them objectively and gathering periodic confidential input from their supervisees.
  4. Evaluate employee technical results; work approaches and the effect of their behavior on the productivity of fellow employees.
  5. Promptly intervene during and after disruptive employee incidents. Be sure to include clear warnings that consequences for anti-social behavior may include termination.
  6. Respond to employee complaints about a coworker. When more than one employee complains it’s a sign that action may be warranted.
  7. Document all performance counselings, patterns of behavior and employee complaints.
  8. Never allow an hourly employee to “volunteer” their time.
  9. Make sure company HR policies are complete, sound and followed consistently by every supervisor in every division.
  10. Audit employee files periodically, keep them up to date, chronologically ordered and make sure the story they tell reflects the actual situation with each employee.

Documentation can save the day

I have worked on over 30 serious terminations where employee performance clearly warranted dismissal. The worst seven cases involved poor performance, bad attitude or ethical violations and resulted in threats of legal action. Four of these resulted in legal settlements of between $10,000 and $40,000:

  •  Two were settled for back overtime payments owed because of uninformed supervision and insufficient documentation;
  • Two were settled purely due to poor management practices and insufficient documentation.

The three employees who sued but did not get settlements were unsuccessful because of consistent management practice and excellent, chronological performance documentation.

Avoid successful employee lawsuits and keep your “house” in order. A good personnel file is a very strong, affirmative defense.

Contact the author with questions or comments.
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