Probationary Employment Periods May Do More Harm Than Good (12/29)

Probationary Employment Periods May Do More Harm Than Good

Probationary employment periods are popular in American businesses, allowing employers up to 90 days to assess a new hire's workplace performance. "A probationary period that allows the manager to let the new employee go or the employee to quit 'without hard feelings' could benefit a small business owner," says Anne M. Pauker, president of New Jersey-based Pauker Consulting Group.

However, she adds that this practice often sends an underlying message of doubt to a new employee, and legal experts say probationary periods may actually do more harm than good.

Most employers could easily do away with probationary periods for new employees, says Kevin Leblang, chair of the labor and employment practice group at Kramer Levin Naftalis & Frankel, LLP. He says employers in most states can legally release employees for any non-discriminatory reason without liability, so a probationary period is really unnecessary.

Fram Virjee, a partner in the labor and employment department of O'Melveny and Myers, agrees. "Probationary periods for new employees only make sense under very specific circumstances," says Virjee, who specializes in representing employers in all aspects of labor and employment law. "And except in some limited circumstances (especially in public employment) probationary periods are not required by law."

"Why make a distinction between probation and regular employment? You may find yourself in court later trying to explain the difference and giving ammunition to the ex-employee," says Leblang. The most common way a probationary period can backfire on an employer is when a business is attempting to be an "at-will" employer. "More specifically, if an employer already has the right to terminate an employee at will regardless of the employee's tenure on the job, but then institutes a probation period in which the employer really does nothing more than reserve the right to terminate a new employee at will, then there is an implied difference between an employee's rights pre- and post-completion of the probationary period," he explains. Experts say this practice may imply a promise or agreement that a successful completion of the probationary period increases the employee's security and establishes some "cause" requirement prior to termination.

Additionally, Virjee says probationary periods can create a false sense of security in the employer, causing him to think he can fire an employee for unlawful reasons or motives as long as the termination occurs during the employee's trial period. Improperly motivated terminations, including those based upon race, religion, gender, national origin, disability and those due to an employee exercising statutory rights, such as filing for worker's compensation, serving jury duty, or taking a family medical leave, are unlawful whether the employee is probationary or not. "Hence, in the end, an employer who is terminating a probationary employee should be able to articulate and demonstrate the legitimate non-discriminatory reason for that decision," explains Virjee. "If the employer cannot, then it will face the possibility of a discrimination claim by the employee regardless of the employee's status as regular or probationary."