Laws In The USA That Have Potential Impact on Performance Evaluations

Legal Principle

Legal Principle

Relationship to Performance Appraisals and the Nature of the Employment Relationship

at Will

Status under which the employer or employee may end an employment relationship at any time

Allows the employer considerable latitude in determining whether, when, and how to appraise performance

Implied Contract

Nonexplicit agreement that impacts some aspect of the employment relationship

May restrict manner in which employer can use appraisal results (e.g., may prevent termination unless for cause)

Public Policy

Determination that given action is adverse to the public welfare and is therefore prohibited

May restrict manner in which employer can use appraisal results (e.g., may prevent retaliation for reporting illegal conduct by employer)

Negligence

Breach of duty to conduct performance appraisals with due care

Potential liability may require employer to inform employee of poor performance and provide opportunity to improve

Defamation

Disclosure of untrue unfavorable performance information that damages an employee’s reputation

Potential liability may restrict manner in which negative performance information can be communicated to others

Misrepresentation

Disclosure of untrue favorable performance information that causes risk of harm to others

Potential liability may restrict willingness of employer to provide references altogether, even for good former employees

Fair Labor Standards Act (FLSA)

Imposes (among other things) obligation to pay overtime to nonexempt (supervisory or managerial) employees

Fact that employee conducts appraisals may influence determination that employee functions as supervisor or manager and is therefore exempt

Family and Medical Leave Act (FMLA)

Imposes (among other things) obligation to reinstate employee returning from leave to similar position

Subjecting employee to new or tougher appraisal procedures upon return may suggest that employee has not been given similar position of employment