Is Your Company Handbook Current?

My friend Bob called me today with what he called a predicament. Bob said he did not know whether or not he should fire Jim, who has been with Bob’s company for nearly 15 years. Jim fills a critical role in Bob’s company because of his experience and he is one of Bob’s most dependable and reliable foremen. Jim, however, has issues.

Seven years ago, Jim was drunk on a job and passed out in the company pickup. Although he was warned and promised not to repeat this behavior, the workers on his crew have reported periodically that he smells of alcohol. Bob suspects that Jim is drinking during lunch breaks.

Three months ago, Jim got into a shouting match with another foreman over some equipment issue. The argument led to a shoving match. No one was seriously hurt but Jim was warned again about his behavior.

Yesterday, Jim was caught in his truck using his company laptop to surf for porn on the Internet. Jim acknowledged he was not supposed to be doing that and agreed it was a violation of company policy. 

Bob is torn between firing Jim and giving him another chance. My recommendation: the “cons” outweigh the “pros” and it is time for Jim to go.

Although firing Jim will be a setback for Bob’s company because of Jim’s experience, the company will recover fairly quickly. In contrast, if Jim screws up again and the company is sued, the outcome could mean the end of the business. Right now, Jim is a huge risk to the company.

The consequences of risky behavior

If Jim is drinking and gets involved in an accident in his company truck, the company’s exposure will be substantial. Worse, the company would almost certainly face a sizeable punitive damages award because Bob knew or suspected that Jim was drinking on the job and did not stop it.

Jim’s aggressive behavior also creates significant risk. The company will not be able to fall back on the “boys will be boys” sort of defense to a first-time offense. Instead, Jim’s prior aggressive conduct will be used as proof that the company knew or should have known he might injure or attack someone else. If a co-worker is injured by Jim, there likely will be no worker compensation insurance because the insurance carrier will argue he was acting outside the scope of his duties and engaged in willful violent behavior. This means the company could be liable for any injuries Jim causes.

The biggest exposure comes from Jim’s surfing the Internet. If a customer or co-worker saw what was on Jim’s laptop, the company could be sued for harassment. Again, punitive damages would probably be awarded. The plaintiff’s attorney would argue to a jury the company deserved to be punished because it let Jim keep working after he had committed the same offense earlier. There really is no defense to this argument that will persuade a jury.

Yes, it is true you might avoid a jury trial by means of an arbitration agreement or jury waiver provision if employees sign one, but that will not protect you from a lawsuit by a customer or vendor. For all of your employees, however, you can and should implement at least a jury waiver provisions if not an arbitration agreement. This will prevent a “runaway jury”.

The company handbook

This is also a good opportunity to review your company handbook — you do have a handbook right? A company handbook will confirm the policies in place and will protect you and cover these situations. Many harassment policies do not forbid surfing the Internet, but they should. That prohibition should also be set forth in the policy discussing use of company equipment.

Finally, the substance abuse policy needs to set out clear guidance and steps for “reasonable suspicion” testing for drugs and alcohol. Once the rules are written down, it would be a good idea to have a safety consultant give a presentation to all employees about the signs of substance abuse.

Ultimately Bob terminated Jim for misuse of company equipment. We chose not to bring up the aggressive behavior and prior substance abuse problem so as not to complicate the termination. We agreed to give only a neutral reference regarding Jim and not disclose the real reason he was let go. Bob is now training Jim’s replacement, but he tells me he sleeps better at night.

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