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Employers often ask, “If at-will employment is the law of my state, why do I need documentation for a termination?” It’s a fair question. Intuitively, documentation does not seem to be necessary under the law of at-will employment. The truth is, however, that although at-will jurisdictions generally do not require documentation to support a termination, documentation is nonetheless critical to mitigating potential legal liability and effectively managing an organization. 

In the broadest terms, at-will employment is a legal doctrine that means an employer or employee may end the employment relationship at any time for any reason, so long as it is not an illegal reason. The importance of performance documentation relates to that caveat. Historically, there were few limitations on the employment relationship. But over time, legislatures and courts have created many exceptions to the at-will employment rule, and failure to comply with those exceptions results in liability for employers. 

There are numerous exceptions to the at-will employment rule. For example, Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act (ADA) of 1990, and the Age Discrimination in Employment Act (ADEA) of 1967, among others, each protect employees against adverse employment actions based on various protected classes. If an employee is terminated and claims the termination violated one of these laws, documentation is critical for the employer to establish that the termination was in fact based on a legitimate, non-discriminatory reason. States and municipalities often have similar or greater protections for employees; documentation is just as important for defending against claims under these laws. 

Moreover, employment statutes generally also contain anti-retaliation provisions. Anti-retaliation provisions protect against adverse employment actions based on an employee engaging in protected activity, such as making a request for reasonable accommodation or participating in a harassment investigation. Because virtually every employment statute contains an anti-retaliation provision, these claims are even more common than discrimination claims. In 2022, retaliation charges made up more than half of the charges filed with the Equal Employment Opportunity Commission (EEOC), the federal agency that enforces the laws discussed above.  

To understand the importance of documentation to retaliation claims, consider the following scenario:  

An employee is having repeated performance issues. The employer meets with the employee to address the issues, at which time the employee makes an accommodation request. The employee has now engaged in protected activity under the ADA and is protected against adverse employment actions based on that activity. If the employer has strong performance documentation predating the meeting, the risk associated with continuing to discipline the employee will be mitigated.  

Statutes passed by legislatures are not the only exceptions to the at-will employment rule. Through judicial decisions, courts have also recognized reasons for termination that are illegal. For example, many states’ courts recognize wrongful discharge claims. This cause of action involves an employee alleging that they were terminated because of a reason that is contrary to public policy. Again, strong documentation can help an employer establish that the termination was based on a legitimate business reason. 

Apart from the doom and gloom of potential legal liability, performance documentation is also important to effective organizational management. Effective and consistent documentation can help managers complete performance appraisals, while serving as a strong communication tool with employees.  

Given the importance of performance documentation, the question becomes, “How can I write documentation in a way that best serves my organization?” That’s where Employers Council can help. We have many resources to help you create effective documentation, from whitepapers to trainings (including our newly updated Performance Documentation 101 class) to consultations with our HR consultants or employment law attorneys. If you have any specific questions, please reach out to our Member Experience team.