HOMEU.S. Laws Pertaining To Performance Reviews (At Will, Employment Relationships
It's useful for companies to design and evaluate their performance management systems in light of legal concerns, and protection from law suits. Below are some of the laws that may be relevant, that exist in the USA related to the employment relationship, at will employment and similar legal areas:
Summary of Selected Laws and Legal Principles That Relate to Performance Appraisals and the Nature of the Employment Relationship
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Law or Legal Principle |
Summary of Law or Legal Principle |
Relationship to Performance Appraisals and the Nature of the Employment Relationship |
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Employment 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 |
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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) |
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Violation of 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) |
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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 |
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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 |
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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 |
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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 |
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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 |
(From Current Legal Issues in Performance Appraisal Stanley B. Malos, J.D., Ph.D. https://www.cob.sjsu.edu/facstaff/malos_s/bookchap.htm)