Written By: Scott R. Thomas

Dean Wormer thought probation made sense for the Delta Tau Chi fraternity.  Many companies think a probationary period also makes sense in the employment context.  Employers who share that philosophy will create a probationary period—30 days, 6 months or a year, depending on the kind of business, the employer’s needs, etc.  During that period, a new employee is “on probation.”  Some employers will also create a probationary period in a special instance later in the employment.  This special period might arise, for example, as part of a disciplinary process, allowing the company to send a message that the employee is on thin ice.  In other circumstances, an employer might establish a probationary period when an employee embarks on a new career path, perhaps shifting from the engineering department to marketing, or being assigned supervisory responsibilities.

For all the good you can say about probationary periods, I don’t like ’em.

When you ask an employer why they like a probationary period, the typical response you get is along the lines of: “Well, if the employee is not working out or is just not a good fit for us, we can just let the employee go and there’s no big headache about it because it’s done during the probationary period.”  There’s two big problems with this, right off the bat.

First, the odds are the employer and employee may have opposite impressions of the probationary period.  The employer thinks he can fire the employee with no questions asked.  The employee, on the other hand, is apt to think “Hey, I’m a probationary employee because I’m new.  I’m going to be getting lots of coaching and training in this six month period.  Because the company knows I’m new, they know I’m going to make some mistakes in the beginning as I learn the ropes.  I’m not going to be punished for making mistakes, as long as I learn from them and improve.”

Both points of view are reasonable.  Hopefully, the company has set out its probation program in detail in the Employee Handbook or some other formal, written policy.  Frequently, the necessary guidance is not there in black and white.

Second, and perhaps more important, the company that uses a probationary period puts its “at-will” employment policy at risk.  The “at-will” employment doctrine reflects the concept prevailing in Ohio and Kentucky that an employee can be discharged—or quit—for any legally permissible reason without liability.  When a company makes an implied promise that is inconsistent with the “at-will” concept, that defense may be lost.  Here, the argument is “I could be fired during the probationary period without any cause.  Therefore, once I complete the probationary period, the employer can only fire me ‘for cause.’”

With that in mind, the employer who wants to discharge an employee with “no big headache” simply needs to understand that she can do that right now!  Naturally, we’re not talking about discharging someone for an impermissible reason, e.g., race, creed, etc.  But if John is a slow learner, or Mary is not a self-starter, the company is not legally obliged to carry them on the payroll.

When a company has a 90-day probationary period and discharges an employee on Day 145, the employee may argue: “There was no basis for firing me.  If the company wanted to fire me without cause, they should have done it while I was on probation.  Since they didn’t, and they have no reason now, I can only infer that my employment was terminated because of my [insert your favorite constitutionally-protected class here].”  If you want to know if your company is vulnerable to this kind of attack, ask yourself “What is the difference between an employee on Day 89 and Day 91?”  If you don’t know the answer—and the answer isn’t clearly written down somewhere—you may be at the mercy of an employee claiming their discharge was pretextual.  At a minimum, you may have to spend a lot of money convincing someone that the discharge was lawful.

On the flip side, a company that discharges an employee during a probationary period is not immune from claims that the discharge was discriminatory.   The fact that the discharge occurred during probation is no shield against claims of unlawful discrimination or retaliation for the exercise of a statutory right.  Given that there is no real “he-was-on-probation” defense, the value of having a class of probationary employees in the workforce is dubious.

Some employers will object to these ideas.  These folks will say: “You need to see how a person performs in the workplace before you can make a judgment as to whether they can be a valuable, long-term employee.”  To them, I say that your probationary employee is on his best behavior.  That behavior is going to change on Day 91.  Once probation is over, the employee will feel “Im in!”  That’s when some employees will start to let things slide.  Probation doesn’t help you identify undesirable employees, it merely postpones the date when that behavior will become manifest.

Instead of establishing a probationary period, take more time in the hiring process.  If a reference doesn’t return your five phone calls, there’s a message there.  If you can’t verify key facts on a resume, take it as a sign.  If the applicant leaves important questions blank, consider it an omen.  Instead of putting the company’s at-will shield at risk, invest some more time in screening the applicants up front.

The probationary period’s utility in a disciplinary context does not justify the risks.  Consider the employer who says: “Pete, you’ve been late four times in the last two weeks.  I’m not going to stand for it anymore.  You’re on probation for 30 days.  If you’re late again, you’re out the door.”  Of course, Pete shows up on time every day during the probation period.  And just as predictably, Pete shows up half an hour late on Day 35.  You drop the boom.  What does Pete say?  “Oh, no you don’t.  I completed my probation.  That wiped the slate clean.  You have to start over again and put me on probation again or give me some kind of progressive discipline.”

I’m not saying Pete will win that argument but who wants to waste the time and money fighting about it?  The sad part is that probation is not a required part of the solution.  No employment law anywhere requires any employer to put someone on probation.  The empowered employer need merely tell Pete “You’ve been late four times in the last two weeks.  You’re on notice, buddy.  Be late again at your peril.”  Then, if Pete is late seven days later—or 37 days later—the employer can make a decision without worrying about whether it’s a probation violation.  Besides, who wants to create the paperwork to establish a probation calendar, and then monitor that calendar?

If despite these points, you feel that a probationary employment period meets your organizational needs, take precautions to ensure it can be defended.  Carefully review your Employee Handbook to confirm that it spells out the details of your program with precision.  Underscore that the existence of the probationary period does not alter the at-will character of the post-probation employment.  You may also want to create a form for your supervisors to use when imposing probation so that your process will be consistently applied.  Periodic supervisor training will also enable you to set consistent ground rules, e.g., the duration of probation, the frequency of probation, the kinds of undesired behaviors suitable for correction through probation, etc.

If you would like more information about these issues, please contact Scott Thomas.   He welcomes the opportunity to help you navigate these and other employment law waters.  Scott’s direct line is 859.578.3862.  You can email him at [email protected].  If there is a particular topic you would like to see addressed in a blog, please send Scott an email with your ideas.

Hemmer DeFrank (1)