female business owner in room with colleagues
ComplianceLegalSeptember 17, 2020

Employer control of employee off-duty conduct is limited

Generally, an employee's off-duty conduct is off-limits as far as employers are concerned. Exceptions do exist if there is some relationship between the off-duty conduct and your business and if misconduct outside of the workplace poses a risk for your business.

While you can regulate your employees' behavior at work, your employees' off-duty conduct is a different story. When it comes to activities or behavior employees are engaged while not at work, employers have very limited say. In order for you to do anything about an employee's off-duty conduct, there should be some relationship between the conduct and the employee's job or your business.

To determine whether there is any action that you can take regarding an employee's lawful off-duty conduct, ask yourself the following questions:

  • Is there a relationship between the off-duty conduct of the employee and the performance of the employee's job?
  • Does the employee's off-duty conduct put your business in an unfavorable light with the public?
  • Does the employee's conduct have a potential for harming the business?

When faced with off-duty conduct situations, it's important to make the distinction between lawful and unlawful off-duty conduct. If the conduct in question is lawful, you may not be able to do anything about it, and some laws expressly prohibit employers from discriminating against employees for engaging in lawful off-duty conduct. Examples of such conduct would be smoking and participating in demonstrations.

However, if you can show that the employee's off-duty conduct hurts the way the employee does the job or reflects negatively on the business, you may be able to address it.

In handling off-duty misconduct, you need to examine the relationship between the person's job and the misconduct — is it something that is likely to affect business?

To find out how much of a connection there is between the misconduct and the business, consider the following:

  • the employee's specific job duties and responsibilities
  • the employee's history with the company
  • the nature of your business
  • the effect on the customers, the coworkers, and the business's reputation and sales
  • the seriousness and notoriety of the allegations

If there is a sufficient connection between the job and the allegations, taking some sort of action may be justified.

Handling off-duty misconduct affecting your business

You need to decide what you will do in the event that issues of misconduct outside of the workplace are raised concerning information that, if true, could pose a risk for your business.

  • If an employee comes to you with a report of off-duty misconduct, instruct the employee not to discuss the information with anyone else, including other employees.
  • Before you do anything about the misconduct, verify the accuracy of the information to the extent possible. Make sure you're not operating under information that is a rumor or an erroneous news report. If law enforcement records can be checked, do so. If you don't, you could be sued for defamation, among other things. Defamation is spreading orally or in writing information about someone that is not true and that harms their reputation. Both criminal and civil penalties may apply.
  • If it's an alleged crime, call the law enforcement authorities. Be sure that you:
    • confirm the identity of the person
    • understand the nature of and basis for the charges
    • inquire as to the current status of the case
    • ask for an estimate of how long it will be before the allegations are resolved
  • Do not automatically ask the employee for his or her side of the story. Whether you ask depends on what the allegations are. Recognize the employee's privacy and try to minimize any intrusion upon it. If the situation has no impact on the employee's job, you don't need to ask about it, and if it is of an extremely personal nature, the employee may not want to talk about it.

Tip: If an employee has retained an attorney because of the incident or conduct in question, the attorney may advise the employee to say nothing. If you find yourself in this situation, respect the employee's right not to speak with you.

At some point in the procedure you must make an independent assessment of the facts of each individual case. Whatever course of action you decide to take must be based on your individual assessment of the situation, not on an arrest or report of misconduct alone.

Action you can take regarding off-duty misconduct

If you decide that an employee's off-duty misconduct could put your business at risk, basically you have three choices to choose from to deal with the matter (note that these options tend to address situations where an employee is in trouble with the law):

  • You can keep the employee. Sometimes, the employee may be a long-standing, hard-working employee with a good performance record and minor allegations against him. After investigating, you may decide that the business's exposure to liability will be minimal, even if you take no action.
  • Suspend the person without pay until the charges are resolved. Here, at least you're not still paying for someone who isn't working. You may still incur costs to hire a temporary employee to fill in while the employee is away.

Warning: If you choose to suspend the employee, be careful of the suspension's wording. Make sure that you reserve the flexibility to determine whether to reinstate based on your review of the underlying facts, no matter what the outcome of the criminal case is.

  • Terminate the employee. Termination may be warranted in some cases, but you should be certain that the employee's misconduct affects the business. Otherwise, you could be subject to lawsuits for wrongful discharge, defamation (if the charges turn out to be unfounded or the accounts of the misconduct otherwise untrue), or invasion of privacy (if the derogatory information is given out to people who do not need access to it).

Tip: If you decide to terminate an employee, you may be exposed to an unemployment compensation claim by the discharged employee. Misconduct outside the job may not be sufficient to disqualify the employee from receiving unemployment benefits.

If an employee engages in illegal off-duty behavior, what should you communicate to customers and other employees regarding the situation? In most cases, you should avoid saying anything. Spreading information increases your risk of saying something that can get you sued. But if a case has gained notoriety and employees or clients are demanding to know what the company is going to do about a situation, you may feel compelled to make a statement.

If anything is said, it should be a carefully worded statement that is written or at least approved by an attorney. It should state only undisputed facts (for example, Joe Jones has been charged with manslaughter) and that your business plans to take appropriate action within the law. It should not state or imply any conclusions to be drawn from those facts.

Back To Top