When facing a difficult termination decision, one of the key questions an employer must answer is whether it is making a “fair” decision. Fortunately for employers, there is a test used by union arbitrators that, even when applied by non-union employers, can help answer that question. For nearly fifty years, union arbitrators have evaluated termination decisions under “just cause” provisions of collective bargaining agreements by using the “Seven Tests” of “just cause” as described by Arbitrator Daugherty in Enterprise Wire Co., 66 LA 359 (1966). Although often criticized by management as an overly rigid test, Daugherty’s Seven Tests constitutes the most frequently cited standard in union arbitration proceedings for determining whether a particular discharge or disciplinary decision was proper. But, the usefulness of the Seven Tests is not limited to union arbitrations and union employers. Indeed, non-union employers can use the Seven Tests to significantly limit the risk of liability in litigation that may result from a termination.
The utility of the Seven Tests is patently obvious – they are designed to ensure fairness in disciplinary decisions. While “fairness” in the union context may be more than is required of non-union employers, ensuring such fairness in the non-union disciplinary process is a near foolproof way to avoid circumstances from which a discriminatory motive may be inferred. After all, if at the end of the day a jury views an employer’s treatment of an employee (discharge or otherwise) as “fair,” then that same jury is hard-pressed to also find that such treatment was discriminatorily based on a category protected by law.
To apply the Seven Tests, an employer need do no more than ask itself the following seven questions before issuing significant discipline like a discharge. If the answer to one or more of the questions is “no,” the employer might be well-served to reconsider its decision:
NOTICE: Did the employer give to the employee forewarning or foreknowledge of the possible or probable consequences of the employee’s disciplinary conduct? This notice may be given in the form of rules, policies, or procedures. In some circumstances, such as fighting, drug use, or insubordination, employees are deemed to be on notice even in the absence of a clear employer communication. Generally, it is best to maintain a yearly or periodically revised acknowledgment from employees indicating that they have received, and that they understand, the employer’s rules, policies, and procedures.
REASONABLE RULE OR ORDER: Was the employer’s rule or managerial order reasonably related to (a) the orderly, efficient, and safe operation of the employer’s business, and (b) the performance that the employer might properly expect of the employee? While no employer is in the business of “rules-for-the-sake-of-rules,” in cases where significant disciplinary action is proposed for a violation of a rule, the rule should be directly and unquestionably related to the employer’s business.
INVESTIGATION: Did the employer, before administering the discipline to an employee, make an effort to discover whether the employee did in fact violate or disobey a rule or order of management? Employers are not police, and they are not required to exhaust every investigatory lead. However, before taking significant disciplinary action, the employer should make an effort to obtain some competent evidence of guilt.
FAIR INVESTIGATION: Was the employer’s investigation conducted fairly and objectively? Generally, an investigation is “fair” when the employer provides an employee suspected of misconduct the opportunity to tell his or her side of the story, and to provide an explanation for the challenged conduct.
PROOF: At the investigation, did the “judge” obtain substantial evidence or proof that the employee was guilty as charged? Substantial evidence does not mean proof beyond a reasonable doubt. The workplace is not a courtroom. But decisions made in the workplace might later be questioned in court. If you were a neutral, how would you view the level of proof of the conduct upon which discipline is being contemplated?
EQUAL TREATMENT: Has the employer applied its rules, orders and penalties even-handedly and without discrimination to all employees? Look to past practice, and treatment of other employees in similar circumstances to ensure that the employee is not being “singled out.” An employee who appears to be singled out, for whatever reason, will often complain later that he or she was singled out for an impermissible reason (i.e., race, sex, color, religion, national origin, age, or disability).
PENALTY: Was the degree of discipline administered by the employer in a particular case reasonably related to: (a) the seriousness of the employee’s proven offense, and; (b) the record of the employee, in his service with the employer? Stated another way: does the punishment fit the crime, and; are there circumstances that warrant mitigation or a reduction in the penalty? Often, in the arbitration context, employees with long and unblemished service record are given a “second chance” based on their past record. While an employer should never ignore an employee’s past record when administering discipline, common sense demands that the more severe the conduct alleged, the less latitude is appropriate – even for the longest term employee.
Arbitrator Daugherty’s Seven Tests have, no doubt, already survived in the world of arbitration for far longer than he ever could have imagined. The Tests have survived for over 50 years because of their simplicity and effectiveness as a barometer for “fairness.” Since the concept of “fairness” is inherently opposed to the notion of “discrimination,” employers in union and non-union settings alike are well-served to evaluate their disciplinary decisions against the Tests themselves.