When an employment relationship sours, the company’s performance management process can be a dangerous smoking gun—or its best defense.

The thin line between unfairness and discrimination

Employees do not have a statutory right to “fairness” in their performance reviews, workplace expectations, or discipline. If two employees violate the same policy, it is not automatically illegal to fire one and give the other a second chance.

Yet unfairness is risky. Even when a company has a legitimate reason to take action, discrimination and retaliation must not influence the decision. If two employees consume alcohol at work, and the 30-year-old is given a second chance, but the 60-year-old is terminated, that employee may have a claim for age discrimination. If a retail company fires an employee for not making her sales goal, but there are other employees with worse numbers and the fired employee recently reported sexual harassment, the fired employee may have a claim for retaliation.

One option is to maintain strict, clear rules. This can be a workable option for certain issues, such as illegal drug use at the workplace.

But many performance issues require case-by-case decisions based on the full context. In those situations, a company can still reduce its legal risk by maintaining consistency where appropriate; thoughtfully deliberating about the legitimate business issues relevant to the situation; and committing itself to reaching decisions that reflect neutral business reasons alone. A solid approach from the very beginning helps to rebut allegations that the company acted because of bias or retaliation. Legal counsel can help guide an appropriate process.

Respect for legal rights

Employers should make sure that employees are judged for their performance, not their protected attributes or their protected actions. For example, an employee must not be criticized for working remotely if their employer previously approved that as a reasonable accommodation for their disability. An employee who took parental leave must not be criticized for taking that leave.

Sometimes, an employee’s legal rights and their genuine performance issues intersect, such as when an employee has a disability that affects their work. Neither cancels the other, and legal counsel can help navigate these situations.

Clarity and miscommunication

Even when employers know they are providing neutral feedback, vague statements can be taken out of context and become legally dangerous. For example, a particular department might have one older worker within a younger team. A statement that the older worker should try to fit in better with the team culture could sound ageist. If there is a real, non-discriminatory problem—such as that the older worker is the only person on the team who does not answer questions from colleagues—the specific problem should be clearly identified.

Supervisors and managers should be thoughtful whenever they are communicating with their team, whether in a verbal conversation, a formal performance review, or the many steps in between. When an employment relationship breaks down, even casual remarks are scrutinized, and vague or off-hand remarks can be taken as evidence of bias even if none was intended. For example, a statement that “Anne complains too much” might be referencing Anne’s whining about the slow printer, but if Anne has made a complaint of race discrimination, that statement could be understood another way. That casual comment could ultimately be presented to a jury, which will decide whose interpretation it believes.

The flip side is that sometimes, managers use overly generous language (or give inflated numerical scores on performance reviews). The manager might be trying to be nice or simply trying to avoid confrontation. This is dangerous because it gives an employee false information about how the organization sees them. If that employee’s performance remains stable, and the employee is fired for underperformance before the next review cycle, the employee will understandably feel blindsided. The employee will also have evidence—created by the company itself—that directly undermines the company’s version of events. This could make the company vulnerable to an argument that it acted for a different, illegal reason. A truthful performance review gives an employee the opportunity to improve performance while avoiding a credibility crisis.

If a tree falls in the forest, and no one sends a contemporaneous email, did it even happen?

Annual performance reviews are important, but documenting performance issues should not be a once-a-year event. Emails, Teams messages, and Slack messages are all legitimate ways to discuss expectations and performance throughout the year. Verbal communications are also important, but they are vulnerable to different recollections. When a live conversation is preferred, consider a follow-up email to memorialize the substance.

If an employee is terminated because of performance problems that arose between review cycles, but the performance issues were never documented in an email or other written message, the company could have a hard time proving that they were real. If an employee alleges that her firing was discriminatory, and the employer claims it was for legitimate reasons, the employee may argue that the so-called legitimate reasons are “pretextual.” If a judge or jury ultimately agrees that the employer’s stated reasons are pretextual, then an employee may win even without independent evidence of discrimination.[1]

Similarly, an employee might take medical leave, support unionization, or take any other step that triggers anti-retaliation protections. Once those protections apply, an employee may argue that subsequent performance criticisms were not sincere, but retaliatory. In fact, in Massachusetts, when an employee takes paid family and medical leave, there is a presumption of retaliation for negative employment actions that happen during and even for 6 months after leave. Concerns that are documented before the employee announced an upcoming leave can be crucial in showing that the employer acted for legitimate reasons. By giving employees timely feedback as a standard practice, managers can reduce the risk that legitimate, performance-based decisions will be seen as retaliation.  

Mid-year performance check-ins can involve a delicate balance between (1) providing necessary feedback so that the employee can understand expectations for success and (2) protecting the company in case the situation deteriorates. These two goals are compatible, but not identical. For example, a manager trying to be diplomatic might write: “I’d like you to take the lead in setting a collegial tone for the next meeting.” But if the backstory is that this very employee instigated a screaming match at the last meeting, that won’t be a very helpful piece of evidence.

Conclusion

Strong performance management limits legal risk while guiding employees toward success for themselves and for the organization. Legal counsel can help identify vulnerabilities and navigate any tension between risk exposure and business needs. Finally, employers should make sure that any discipline is consistent with any applicable employment contract or union agreement.

This article is not legal advice. If you are interested in discussing any of these topics further, please contact a member of the Employment & Benefits Practice Group.