Discipline and Discharge 09-27-2005

INTRODUCTION

Employment at will is still technically the rule for private employers in Minnesota and Wisconsin. But in reality, employers today must negotiate a confusing maze of contractual and statutory land mines before arriving unscathed from the discipline and discharge process. One misstep and an employer can suffer significant liability, especially since many employment-related claims remain outside the scope of typical insurance coverage.

This article seeks to provide information on applicable law and a format for analysis that can assist a private employer in minimizing its legal exposure for discipline and discharge decisions. Specific issues relating to public employment are not addressed.

Legal exposure can arise in a variety of ways, but normally is the product of one of three employer shortcomings:

The failure to recognize limits on a company's right to discipline or discharge;
The failure to have operated in a manner that will allow a company to prove that it acted within allowable limits; and
Implementing the discipline or discharge in a manner that violates an employee's rights.

A prudent employer should, therefore, ask three questions before proceeding with any disciplinary or discharge action:

Are there any contractual or legal limitations on its right to act?
If it does act, does it have the evidence to prove it acted within allowable limits? and
Has it planned to discipline or discharge in a manner that protects the employee's rights?

The time to address problems is before they occur.

The outline below serves as a checklist for use when confronting the question of whether to proceed with a discharge or discipline action. The remainder of this article expands on the outline points.

1. Are There Any Limits On The Company's Right To Act?

A. Do any contractual limits exist?
1) Individual written contracts
2) Oral promises
3) Collective bargaining agreements

B. Do any legal limits exist?
1) Anti-discrimination statutes
2) Anti-retaliation statutes
3) Off premise use of lawful substances
4) Drug and alcohol testing
5) Garnishment
6) Jury duty
7) Pension rights
8) Veteran protection laws
9) Polygraph testing
10) Union and concerted activity
11) Leave laws
12) Refusal to work based on a belief of imminent danger or death or serious physical harm
13) Prior conviction
14) Plant closing laws

2. Do The Facts Support The Contemplated Action?

A. Does evidence exist to prove the company's position?

B. Is the planned action within contractual and legal limits?

C. Is the contemplated action supported by principles of basic fairness?
1) Did the employee have notice of the disciplinary consequences of his actions?
2) Is the standard of conduct reasonably related to the safe and efficient operations of the company?
3) Has the company undertaken an objective and thorough investigation?
4) Does the evidence support a reasonable belief that the standard of conduct was violated?
5) In taking the adverse action selected, will the company be applying its standards without discrimination?
6) Is the discipline chosen reasonably related to the seriousness of the offense and the employee's past work record?

3. Can The Discipline Or Discharge Be Implemented Without Violating The Employee's Rights?

A. Can the action be taken without:
1) Telling untruths
2) Invading privacy
3) Denying due process
4) Unlawfully withholding wages
5) Failing to timely pay wages and benefits
6) Failing to provide COBRA notices
7) Failing to timely provide a written reason for termination upon request
8) Failing to timely provide a copy of a requested personnel file

B. Have appropriate plans been made to carry out the action?
1) Has the reason for the adverse employment action been clearly identified?
2) Has the company prepared for the discharge meeting?
3) Has the company set up a system to assure that post-termination issues are timely handled?

I. LIMITS ON THE RIGHT TO DISCIPLINE AND DISCHARGE.
An employer can be limited in its right to discipline or discharge in one of two ways. It can agree to limit its rights or it can have limits imposed on it by law in the form of statutes, regulations or judicial decisions. An employer should determine whether such limits exist prior to taking adverse personnel action.

A. VOLUNTARY LIMITS ON THE RIGHT TO DISCIPLINE AND DISCHARGE.

An employer can voluntarily agree to limit its authority to discipline or discharge. This may occur by way of individual written employment agreements, oral promises, personnel policies or collective bargaining agreements. The agreed upon limitations can be diverse in nature. They can include limits on the timing of discharge in the form of a guaranteed term of employment. They may include limits on the reason an employee may be disciplined or discharged, such as an agreement that discharge occur only upon a showing of just cause or other similar standard. And they sometimes include limits on the manner in which an employer may decide upon or implement discipline or discharge, such as agreements requiring such action to be taken only after receiving employee input.

1. Individual Written Employment Agreements.
a. Individual written employment agreements can be enforceable just as any other contract under Minnesota and Wisconsin law.
b. To be enforceable, there must have been an offer, an acceptance and consideration.
c. An employer's employment confirmation letter, if appropriately drafted, should not qualify as an enforceable written contract. To avoid contract status:

(i) State clearly that employment is at will;
(ii) Avoid reference to any length of employment; and
(iii) When confirming a wage rate, refer to pay period amounts, not solely to annual salary.

2. Oral Promises.
a. Oral agreements can be enforced against employers, but courts rarely do so.
b. To be enforceable, there must be a specific and definite offer which is communicated to and accepted by the employee for which consideration is provided.
c. Courts closely scrutinize alleged oral agreements for permanent employment due to the potential for abuse. For example, Minnesota courts have held the following statements not to constitute enforceable promises of employment:

(i) "Consider your job a career situation;"
(ii) "We will retire together."

d. But an oral promise coupled with an employee's reliance and resulting prejudice can create an enforceable contract through the application of the doctrine of promissory estoppel.

e. In both Minnesota and Wisconsin, to hold an employer to an oral promise based on promissory estoppel, an employee must show that:

(i) An employer made a promise;
(ii) The employer should have reasonably expected the promise to induce definite and substantial action by the potential employee;
(iii) The promise induced such action; and
(iv) The promise must be enforced to avoid injustice.

f. Promissory estoppel typically arises in situations where an employer makes an offer, an employee quits an existing position to accept, and the employer revokes the offer prior to or soon after the employee starts employment.

3. Personnel Policies and Handbooks.
a. Minnesota and Wisconsin courts can hold personnel policies and employee handbooks to be contracts enforceable by employees.

b. To be enforceable, a policy or handbook provision must:

(i) Constitute an offer that is "sufficiently definite and specific" and not merely a general statement of policy;
(ii) Be communicated to the employee;
(iii) Be accepted by the employee; and
(iv) The employer must receive consideration.

Acceptance and consideration exist if an employee continues to work for an employer after receipt of the policy.

c. Employers can minimize the chance of having their policies deemed an enforceable contract by taking simple actions:

(i) Include a disclaimer in capital letters and bold text in both the introduction and on the acknowledgement page to be signed by the employee. The disclaimer should explain that:

(a) The policies are intended as guidelines and a statement of general policy only;
(b) The policies present information about what the company generally does but is subject to exceptions at the discretion of the company;
(c) The employees serve at will and can be terminated at any time for any lawful reason;
(d) The policies do not constitute a contract of employment (either implied or expressed);
(e) The employer may modify, suspend or revoke the policies at any time and, although employees will be notified of changed policies as soon as is practical, any change becomes effective immediately without regard to notice; and
(f) The policies supercede and replace all prior policies and all prior handbooks and policies are revoked.

(ii) Separate any sections on "standards of conduct" from any sections on "progressive discipline." Tying the two together, i.e., identifying specific conduct for which certain progressive discipline will or will not be utilized is the type of "definite and specific" offer deemed to constitute an enforceable contract.

(iii) Repeat disclaimers within any disciplinary or discharge section.

(iv) Notwithstanding disclaimers, employers should strive to comply with policies in existence.

(a) Compliance works to maintain employee morale and trust.
(b) Without voluntary compliance, employees may perceive a need to seek outside assistance in the form of a union.

4. Collective Bargaining Agreements.

a. Collective bargaining agreements are enforceable on behalf of any employee included in the unit represented by the union.

b. Contracts typically include substantive and procedural restriction on employers' rights, including:

(i) Just cause requirements for discipline and discharge;
(ii) Progressive discipline for all transgressions except serious misconduct; and
(iii) Right to representation in the investigatory process.

B. IMPOSED LIMITS ON THE RIGHT TO DISCIPLE AND
DISCHARGE.

Employers are subject to numerous prohibitions and limitations on their ability to discharge and discipline as imposed by law.

1. Anti-discrimination Statutes.
Federal, state and local anti-discrimination laws and regulations prohibit employers from taking adverse employment action against an employee based on certain unlawful bases. For Minnesota employers, those unlawful grounds are:

Race
Color
Religion
Sex
National origin
Creed
Marital status
Status with regard to public assistance
Membership or activity in a local commission
Disability
Age
Sexual orientation

For Wisconsin employers, those unlawful grounds are:

Race
Color
Religion
Sex
National origin
Age
Creed (religion)
Handicap
Marital status
Ancestry
Arrest record
Conviction record
Membership in the National Guard, state defense force, or any military reserve unit
Use or non-use of lawful products off the employer's premises during non-work hours

2. Anti-retaliation Statutes.
In an effort to protect employees from unfair reprisals, numerous laws render it unlawful for an employer to take adverse employment action against an employee in retaliation for that employee exercising his or her protected rights.

a. Whistleblower laws.¹

Minnesota's Whistleblower Law prohibits an employer from taking adverse employment action against an employee:

(i) Who refuses to follow an order that the employee objectively believes violates state or federal law if the employee informs the employer that the refusal is for that reason; and

(ii) Who makes a good faith report of a violation or suspected violation of a federal or state law to an employer or to a government entity or who is requested to participate in a hearing or inquiry.

Wisconsin places similar prohibitions on an employer's right to discipline or discharge through a judicially created cause of action referred to as the public policy exception to employment at will.

b. Workers' Compensation Act.²

The Minnesota Workers' Compensation Act prohibits adverse employment action in retaliation for seeking or receiving workers' compensation benefits.

c. Reports Under the Anti-Discrimination Laws.³

State and federal law prohibit employers from retaliating against employees for exercising rights under anti-discrimination statutes such as Title VII, the Age Discrimination in Employment Act, the Minnesota Human Rights Act and the Wisconsin Fair Employment Act.

d. Reports Under the Fair Labor Standards Act.⁴

The Fair Labor Standards Act makes it unlawful for an employer to take adverse action against an employee for exercising rights under that statute. For example, an employer may not lawfully discipline or terminate an employee for making a complaint to the Labor Department about minimum wage or overtime payment violations.

e. Reports Under the Occupational Safety and Health Act.⁵

The Occupational Safety and Health Act ("OSHA") prohibits adverse employment action for exercising rights under OSHA, such as filing a complaint, causing an inspection to be instituted, complaining to the employer or union of an unsafe condition or requesting information from OSHA.

f. Vulnerable Adult Act.⁶

Minnesota's Vulnerable Adult Act prohibits retaliatory action against an employee for reports made under the Vulnerable Adult Act.

3. Off Premise Use of Lawful Substances Laws.⁷
Minnesota and Wisconsin employers may not refuse to hire an applicant or discipline or discharge an employee for using lawful consumable products (including food, alcohol or tobacco) off the work premises and during non-working hours.

However, a Minnesota employer may restrict an employee's off-premises use of lawful consumable products during non-working hours if the restriction:

a. Relates to a bona fide occupational requirement and is reasonably related to employment activities or responsibilities of a particular employee or group of employees; or
b. Is necessary to avoid a conflict of interest or the appearance of a conflict of interest with any responsibilities owed by the employee to the employer.

Wisconsin law provides similar exceptions.

4. Drug and Alcohol Testing.⁸
In the event a Minnesota employer subject to the Minnesota Drug and Alcohol Testing Statute chooses to use test results to discipline an employee, its response to an employee's use of drugs or alcohol is limited by law. That is, if it chooses to rely on the results of the drug or alcohol test to discipline or discharge an employee, it must do so within the constraints of that statute. The statute does not allow an employer to discharge an employee based on an initial test failure. Rather, it requires an employer to provide that employee an opportunity to participate in a rehabilitation program. An employee's refusal to participate in such a program or subsequent test failures do justify discharge under the statute.

A drug and alcohol policy can be drafted to preserve to an employer the right to investigate and discipline for drug and alcohol violations through the use of either direct observation or drug and alcohol testing. If the policy is drafted in that manner, then if a situation should arise in which management observations of an employee make clear that a violation of the drug and alcohol policy has occurred, the employer would have the ability to refrain from relying on test results and proceed to discipline a drug and alcohol policy offender without regard to statutory limits. In that situation, the employer could terminate an employee based on a first time offense.

Wisconsin does not have a statute specifically regulating drug and alcohol testing. However, its discrimination statute treats alcohol addiction as a disability and may treat drug addiction as a disability, thereby potentially limiting an employer's allowed response to a positive test.

5. Garnishment.⁹
Minnesota and Wisconsin law prohibit termination of an employee because his or her wages have been garnished.

6. Jury Duty.¹⁰
Minnesota and Wisconsin law prohibit termination of an employee for serving on jury duty.

7. Pension Rights.¹¹
Federal law prohibits termination of employees to avoid their attainment of vested pension rights.

8. Veteran Protection Laws.¹²
The Uniformed Services Employment and Reemployment Rights Act ("USERRA") imposes discharge and discipline restrictions on all private (and public) employers regardless of size. USERRA applies to all employees absent from work due to service in the "uniformed services." The uniformed services include the Armed Forces (Army, Navy, Air Force, Marines); the Army National Guard; the Air National Guard; full-time National Guard duty; the Commissioned Corps of the Public Health Service; and any other category of persons designated by the President in time of war or national emergency. Service in the uniformed services includes performance of active duty, active duty for training, initial active duty for training, inactive duty training, fulltime National Guard duty, and absence from work for an examination to determine an individual's fitness for any of the above types of duty, whether the duty is on a voluntary or involuntary basis. The specific limitations on an employer's ability to discharge and discipline a person in the uniformed services are as follows:

a. A person reemployed after military leave of 181 days or more may be discharged only for cause within one year of his or her reemployment date.

b. A person reemployed after a military leave of between 31 and 181 days may be discharged only for cause for a period of six months from his or her reemployment date.

c. Employers are prohibited from discriminating or retaliating against any employee because of any past, present or future military obligations.

d. Employers are also prohibited from retaliating against any person who files a complaint under USERRA, who testifies, or assists or otherwise participates in any investigations or proceedings under USERRA, or who exercises any right provided USERRA. This includes witnesses who do not have any military service.

e. An employer violates USERRA if an employee's past, present or future military obligations are a "motivating factor" in any adverse action taken against the employee unless the employer can prove that it would have taken the action regardless of the employee's military obligations.

9. Polygraph Testing.¹³
In Minnesota, employers are barred from asking applicants or employees to take a polygraph test under any circumstance and, therefore, cannot refuse to hire an applicant or discharge an employee for their refusal to submit to a polygraph test.

Wisconsin law and the Federal Employee Polygraph Protection Act also prohibit such testing and make unlawful any adverse personal action based on a refusal to test, but also contain certain exceptions under which testing may be permitted.

10. Union and Concerted Activity.
It is unlawful under the National Labor Relations Act ("NLRA") for an employer to discriminate to encourage or discourage membership in any labor organization.¹⁴ Therefore, an employer is prohibited from discharging or disciplining an employee based on his or her union activism or perceived union sympathies.

Even when a union is not involved, the NLRA imposes limits on an employer's ability to discipline or discharge by affording protection to employees who "engage in other concerted activity [non-union related] for the purpose of … other mutual aid or protection."¹⁵ To be protected, an employee's action must be concerted (involving more than one employee), must be directed toward mutual aid and protection, and must be an appropriate means of action. Thus, for example, the NLRA would prohibit an employer from disciplining or discharging an employee based on the fact that the employee:

a. With another employee complains of long hours;
b. With another employee complains of low wages or requests increased wages;
c. Makes a request that a fellow employee be present during an investigative (fact finding) interview; or
d. Refuses to participate in an investigative interview without the presence of a requested coworker.

11. Family and Medical Leave Act.
An employer must reinstate an employee who has taken Family and Medical Leave Act leave to the position he or she held before taking the leave or to a position with equivalent benefits, pay and other terms and conditions of employment.¹⁶ Therefore, during the leave an employer is prohibited from discharging an employee unless an exception applies. Exceptions include the following:

a. If the employee is a "key" employee, the employee need not be reinstated if such action is necessary to prevent substantial and grievous economic injury to the employer's operations. A key employee is a salaried employee who is among the highest paid 10% of employees within 75 miles of the employee's work site.¹⁷

b. If an employee has taken leave due to his own serious health condition, he may be required to provide medical certification before returning to work if it is the employer's practice or policy to require this certification of all such employees. An employee who fails to do so may be denied reinstatement except where required by state or local law, or collective bargaining agreement.¹⁸

12. Refusal to Work Based on a Belief of Imminent Danger or Death or Serious Physical Harm. ¹⁹
A Minnesota or Wisconsin employee acting in good faith has the right to refuse to work under conditions which the employee reasonably believes present an imminent danger of death or serious physical harm to the employee. This includes an assignment to work in an unhealthful manner with a hazardous substance, harmful physical agent or infectious agent. The right arises under Minnesota law, OSHA regulations and the National Labor Relations Act and bars an employer from taking adverse action against an employee for refusing to work.

Minnesota employers may assign complaining employees to alternative tasks and need not pay them if they refuse the alternative assignments. However, in the event the employer does not reassign an employee and the employee requests that the agency inspect, the agency inspects and determines that the employee would have been placed in imminent danger of death or physical harm if he had continued to work, then the employer must pay the employee for time missed.

13. Prior Conviction.²⁰
In Minnesota, an employer cannot use a prior conviction to discharge or disqualify a person from any position for which a license is required (or from public employment), unless the conviction directly relates to the position sought. Even if the position and the crime are directly related to each other, a convicted individual must be permitted to show evidence of rehabilitation and present fitness for the job. No such limitations exist for jobs that do not require licenses. In Wisconsin, an employer may not discharge or disqualify a person for any position based on a conviction record unless the conviction is substantially related to the circumstances of the job.

14. Plant Closing Laws.²¹
An employer is prohibited from terminating employees protected by the Worker Adjustment and Retraining Notification Act ("WARN") without first providing the employees and certain governmental bodies 60-day advance written notice.

a. WARN requires that covered employers provide a 60-day advance written notice to affected employees before implementing a plant closing or mass layoff.

b. Employers subject to WARN are any business enterprises that employ 100 or more employees other than part-time employees or alternatively 100 or more employees of any type who, in the aggregate, work a minimum of 4,000 hours per week exclusive of overtime.

c. The notice requirements are triggered only with respect to a "plant closing" which is defined as a permanent or temporary shutdown of a single site of employment that results in an employment loss during any 30-day period for 50 or more employees excluding part-time employees, or a "mass layoff" which is defined as a reduction in force at a single site of employment that results in an employment loss during any 30-day period for either at least 33% of the non-part-time employees at that site (must be a minimum of 50 employees) or at least 500 non-part-time employees without regard to the percentage affected.

d. The Act applies to employees who may reasonably be expected to experience an employment loss. The Act, therefore, does not apply to employees if the closing or layoff results from the relocation or consolidation of the employer's business and the employees are offered viable transfer rights to another employment site prior to the closing or layoff or where a seller terminates employees who are hired back by the buyer after the sale of a plant.

e. The Act relieves employers from the notice requirement for job losses resulting from strikes, bona fide lockouts and completion of temporary projects, and provides for a reduced notice requirement when a closing or layoff is caused by unforeseen business or act of nature circumstances, or where an employer is actively seeking capital or business which, if obtained, would have allowed the employer to avoid or postpone the employment loss.

f. Violation of WARN subjects an employer to liability for back pay, lost benefits and a penalty of up to $500 for each day it failed to provide the required notice to a local unit of government.

II. CONFIRM YOUR ABILITY TO PROVE FAIR AND LAWFUL ACTION.
Prior to disciplining or discharging an employee, an employer should objectively review the facts to confirm that its intended action is both fair and lawful. That analysis requires an employer to confirm that its proposed action is within contractual and legal limits and to confirm that its actions will be viewed as fair by an objective fact finder.

A. CONFIRM THAT THE ACTION IS WITHIN CONTRACTUAL AND LEGAL LIMITS.
As discussed in the previous section, an employer needs to be aware of the contractual and legal limits to its right to act and to operate within those limits. The assessment of whether an employer would be acting within allowable limits is often aided by asking and responding to the simple question of whether the employer has a non-discriminatory business reason for its intended action. If it does and its intended action does not clearly violate any contractual or legal restriction, then the employer is likely to prevail against a great many types of employee claims.

Most discrimination and retaliation claims are subject to a shifting burden of proof. It is this shifting evidentiary burden that creates the necessity for an employer to prove the reason it discharged an employee, even where the employment is "at will."

For claims governed by the shifting burden, an employee can initiate a claim by merely proving he is within a protected class, is qualified for the position, and had an adverse employment action taken against him. For example, that he is over 40 years old, had done the job in the past and was terminated, or that he made a complaint under OSHA, had done the job in the past and was disciplined. If the employee establishes those basic facts, then the burden shifts to the employer to prove that it had a nondiscriminatory business reason for taking the adverse action. If able to do so, the burden then shifts back to the employee to prove that the asserted non-discriminatory business reason was merely a pretext, fabricated to disguise discriminatory action.

An employer can and should adopt practices that will improve its ability to prove a non-discriminatory business reason for its actions. Those general practices include:

1. Publishing standards of conduct;
2. Utilizing some form of progressive discipline;
3. Documenting infractions; and
4. Striving for uniformity in treatment of employees who violate standards or who fail to meet performance expectations.

For non-performance based discharges arising from business reorganizations or changed market conditions, an employer can improve its ability to establish a viable defense to discrimination and retaliation claims by documenting its business decisions in the normal course of operations prior to taking any specific adverse personnel action.

An employer without documentation of the reason for and timing of its actions will not necessarily lose in its defense of an employee claim. However, its proof will be limited to oral testimony alone which is typically perceived by juries, judges and arbitrators as less accurate and less trustworthy than oral testimony supported by historical documentation.

B. CONFIRM THAT THE INTENDED ACTION IS FAIR.
An employer should confirm that its intended action is not only legal, but also fair. Fairness will foster employee loyalty and maximize a company's chances of prevailing against an employee challenge to the adverse action.

A time worn series of questions are used by many labor arbitrators to assess overall fairness in grievance arbitrations. An employer able to respond affirmatively to those questions can be confident that it has treated its employee fairly in any discipline or discharge situation.

1. Did the employee have notice of the disciplinary consequences of his actions?
2. Is the standard of conduct reasonably related to the safe and efficient operations of the company?
3. Has the company undertaken an objective and thorough investigation?
4. Does the evidence support a reasonable belief that the standard of conduct was violated?
5. In taking the adverse action selected, will the company be applying its standards without discrimination?
6. Is the discipline chosen reasonably related to the seriousness of the offense and the employee's past work record?

III. MINIMIZING RISKS IN THE DISCIPLINE AND DISCHARGE PROCESS.
Even if an employer has a lawful right to discharge an employee, it may expose itself to liability by violating employee rights in its investigation leading up to discharge or in the discharge process itself. A company can work to minimize those potential exposures by being aware of employee rights and claims and by planning the discharge process with an objective of protecting those employee rights.

A. POTENTIAL EXPOSURES.

1. Telling Untruths.
An employer who defames an employee in the process of disciplining or discharging that employee is exposed to liability for compensatory and punitive damages. An employer defames an employee by making a statement that:

a. Is false;
b. Is communicated to a third person;
c. Tends to harm the employee's reputation and lower him or her in the estimation of the community; and
d. Is not made with a proper motive or with reasonable or probable cause.

The element of communication can be met by oral or written statements made to anyone other than the employee and, in a narrow circumstance referred to as "self-publication," can be satisfied even if the false statement is made only to the employee.

Self-publication occurs where an employee who is told a false statement by his employer is compelled to repeat that defamatory statement to a third person and the compulsion is, or should have been, foreseeable to the employer. Self-publication has been found to exist where an employee is told a defamatory reason for discharge and, in responding to a prospective employer's inquiry into the reason for the prior termination, repeats the defamatory statement.

2. Invading Privacy.
An employer can be exposed to compensatory and punitive damages if it improperly invades the privacy of an employee in the process of investigating or implementing discipline or a discharge. Minnesota and Wisconsin recognize three privacy causes of action: (1) intrusion on seclusion; (2) publication of private facts; and (3) appropriation. Typically, only the first two are of concern to employers in the discipline and discharge arena.

a. Intrusion on Seclusion.
An employer invades the privacy of an employee by intrusion upon seclusion when:

(i) The employer intentionally interferes, physically or otherwise, with the solitude, seclusion or private concerns or affairs of the employee; and
(ii) That employee has a reasonable expectation of privacy in his or her solitude, seclusion or private concerns or affairs; and
(iii) The intrusion occurs in a way that would be highly offensive to a reasonable person in that position.

b. Publication of private facts.
An employer invades an employee's privacy by public disclosure of private facts when:
(i) An employer discloses facts about the private life of an employee;
(ii) The matter is communicated to the public at large, or to so many people it is substantially certain to become public knowledge;
(iii) The matter would be highly offensive to a reasonable person; and
(iv) The matter is not of legitimate concern to the public.

3. Denying Due Process.
The fundamental requisites of due process as used in a generic, nonconstitutional sense, are notice, opportunity to be heard and fundamental fairness. In contrast to public employers, employers in the private sector do not, by law, owe their employees the constitutional due process protections found in the Fifth and Fourteenth Amendments. However, private sector employers should strive to provide their employees as much due process as practically possible. Collective bargaining agreements usually incorporate procedural due process protections. Arbitrators deciding discipline and discharge grievances typically require an employer to demonstrate compliance with basic principles of due process. And principles of equity and fairness render it advantageous for an employer to comply with basic due process principles to maintain employee trust and loyalty and to assure that any reviewing court does not perceive it as acting unjustly.

4. Unlawful Wage Withholding.²²
Minnesota and Wisconsin law prohibit an employer from deducting the value of lost, stolen or damaged property or any debt owed to the employer from an employee's wages. An employer may make deductions for repayment of a debt only where the employee has authorized the deduction in writing after the loss has occurred or the debt has arisen.

5. Failing to Timely Pay Wages and Benefits.²³
Minnesota employers must pay a discharged employee all wages due but unpaid within 24 hours of the employee's demand. A Minnesota employer failing to timely make payment may be liable for a penalty of up to 15 days of additional wages.

A Wisconsin employer must pay a discharged employee by the earlier of the date on which the employee regularly would have been paid under the employer's established payroll schedule or 31 days after termination.

6. Failure to Provide COBRA Notices.
Under the Consolidated Omnibus Budget Reconciliation Act of 1985 ("COBRA"), covered employers (private employers with 20 or more employees) are required to offer continuing group health coverage for terminating employees, to provide its employees with notice of the availability of such coverage, and to provide timely notice to its plan administrator upon an employee's termination of employment.²⁴ The notice must be provided within 30 days of the termination.²⁵

Failure to offer the continued coverage or to provide the required notices can expose an employer to liability for medical costs incurred by a terminated employee.

7. Failure to Timely Provide a Written Reason for Termination Upon Request.²⁶
A Minnesota employee who has been involuntary terminated may, within fifteen (15) working days following such termination, request in writing that the employer inform the employee of the reason for the termination. Within ten (10) working days following receipt of such request, an employer must inform the terminated employee in writing of the truthful reason for the termination. An employer who fails to timely notify an employee as requested is subject to a civil penalty of $25 per day not to exceed $750.
An employer does receive protection from certain defamation claims by responding to an employee's request. No communication of the statement furnished by the employer to the employee under the statute may be made the subject of any action for defamation by the employee against the employer.

8. Failure to Timely Provide a Copy of a Requested Personnel File.
A Minnesota employee who has been involuntarily terminated may, within one year following such termination, request in writing to review the employee's personnel record. Within seven working days after receipt of the written request (or 14 working days if the personnel record is located outside the state) the employer shall comply with the request by providing a copy of the personnel record to the employee at no charge.²⁷

An employer who fails to timely produce a requested personnel record is liable to the employee for any actual damages incurred plus costs and is exposed to a civil fine of up to $5,000 plus attorneys' fees through an action brought by or on behalf of the Department of Labor and Industry. ²⁸

Wisconsin employers are obligated to produce to employees a copy of their personnel documents within seven working days of a request or face fines of not less than $10 nor more than $100 per day.

B. TIPS TO MINIMIZE TERMINATION PROCESS EXPOSURE.

1. Conduct an Objective, Thorough Investigation.
a. Limit duties to those with personnel responsibilities.
b. Remove investigatory and decision-making responsibilities from biased personnel.
c. Do not prejudge.
d. Provide the employee with notice of the accusations.
e. Provide the employee with an opportunity to explain.
f. Interview all individuals with relevant knowledge.
g. Document investigation results.
h. Maintain confidentiality to the degree reasonably possible.

2. Clearly Identify the Reason for the Adverse Employment Action.
a. Know why you are acting before you act.
b. Obtain consensus on the reason for action among all decision makers prior to acting.
c. Confirm that facts exist to support the reason for acting.

3. Prepare for Discharge Meeting.
a. Outline meeting topics to include but not be limited to:

(i) Reason for discharge (brief/general).
(ii) Timing of discharge.
(iii) Return of company property.
(iv) Final pay.
(v) Severance (if applicable).
(vi) COBRA.
(vii) References.
(viii) Opportunity to resign.

b. Schedule meeting (usually on short notice).
c. Determine and prepare explanation for co-employees, if any.

4. Control the Discharge Meeting.
a. Limit participants to those who have personnel responsibilities.
b. Control the meeting by keeping to prepared outline (but do not read prepared statements).
c. Do not enter into detailed discussion of the factual basis for termination; if asked, reply that it would not be productive.
d. Upon completion, document the meeting.

5. Assure That Post Termination Obligations Are Met.
a. Send COBRA notices.
b. Timely respond to requests for termination reason.
c. Timely respond to requests for personnel file.

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1 Minn. Stat. § 181.932; Brockmeyer v. Dun & Bradstreet, 113 Wis. 2d 561, 335 N.W.2d 834 (1983).
2 Minn. Stat. § 176.82.
3 Minn. Stat. § 363.03; Wis. Stat. §§ 111.31 - .395; Title VII 42 U.S.C. § 2000E-2, 2000E-3(a); ADEA 29
U.S.C. §§ 623, 631, 633(a); and ADA 42 U.S.C. §§ 12112, 12203.
4 29 U.S.C. § 215(a)(3), § 216(b).
5 29 U.S.C. § 660(c); Minn. Stat. § 182.654.
6 Minn. Stat. § 626.557.
7 Minn. Stat. § 181.938; Wis. Stat. § 111.321 and § 111.335.
8 Minn. Stat. § 181.94.
9 Minn. Stat. § 571.51, subd. 1; Wis. Stat. § 812.43; 15 U.S.C. § 1674(a).
10 Minn. Stat. § 593.50; Wis. Stat. § 756.255.
11 29 U.S.C. § 1140, § 1141.
12 38 U.S.C. §§ 4301-4333.
13 29 U.S.C. § 2001-2009; Minn. Stat. § 181.75; Wis. Stat. § 111.37.
14 29 U.S.C. § 158(a)(3).
15 29 U.S.C. § 157.
16 29 U.S.C. § 2614; 29 C.F.R. §§ 825.214, 825.215.
17 29 U.S.C. § 2614(b)(2); 29 C.F.R. § 825.217.
18 29 U.S.C. § 2714(a)(4); 29 C.F.R. § 825.310; 29 C.F.R. § 825.216.
19 Minn. Stat. § 182.654, subd. 11; 29 C.F.R. § 1977.12(b).
20 Minn. Stat. § 364.03; Wis. Stat. § 111.321 and § 111.335.
21 29 U.S.C. §§ 2101-2109.
22 Minn. Stat. § 181.79; Wis. Stat. § 103.455.
23 Minn. Stat. § 181.10; Wis. Stat. § 109.03(2).
24 29 U.S.C. § 1161, et seq.
25 29 U.S.C. § 1166(a)(2).
26 Minn. Stat. § 181.933.
27 Minn. Stat. § 181.961.
28 Minn. Stat. §§ 181.9641 and 181.965.

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The information provided in this article is general in nature and should not be used as a substitute for professional services and advice. The communication and receipt of this information is not intended to create an attorney-client relationship. Readers should consult with their legal counsel before taking any action on matters covered in this article.

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Copyright 2004 by Hanft Fride, P.A. All rights reserved. Hanft Fride, A Professional Association, 1000 U.S. Bank Place, 130 W. Superior Street, Duluth, MN 55802. Phone 218-722-4766; fax 218-529-2401.