CAREFULLY CONSIDER WHETHER SPECIFIED DISCIPLINARY STEPS SHOULD BE PUBLISHED IN HANDBOOKS OR POLICY MANUALS

In Stagg v. Vintage Place, Inc., Stagg challenged an unemployment-law judge’s (ULJ) decision that he was ineligible for unemployment benefits because he was discharged for employment misconduct. Stagg argued that the ULJ erred in concluding that he engaged in employment misconduct because his employer, Vintage, did not follow the progressive-discipline steps mandated by the terms contained in the employee handbook when he was terminated.

The policy stated that Vintage employees may be disciplined according to five steps: 1) an oral warning for the first unexcused absence, 2) a written warning for the second, 3) a three-day suspension for the third, 4) a ten-day suspension for the fourth and 5) termination for the fifth. Although Stagg struggled with tardiness and absenteeism over the course of his employment with Vintage, he was terminated before he received a ten-day suspension.

Using the Hoemberg rule (handbook discipline provisions must be followed before finding misconduct precludes eligibility for unemployment benefits), the Minnesota Court of Appeals reversed the ULJ’s decision and found that because Vintage skipped the fourth step of their five-step discipline policy, as contained in the employee handbook, Staggs was eligible for unemployment benefits.

The implication for employers appears to be that while specific steps utilized in imposing discipline for attendance or punctuality issues need not be specified in personnel policy or company handbooks; where such steps are identified, they must be followed. Once published, an employer’s deviation from specified progressive discipline may undermine the ‘misconduct’ defense to unemployment benefit claims.