How financial leaders react to unacceptable employee behavior that occurs off duty must be largely determined by your employee discipline policy.

What do you do when your employees engage in behavior prohibited by your organization when they are not at work? Given the recent uptick of discriminatory behavior and increasing ease for individuals to voice divisive opinions on social media, which can capture employees at their worst, this issue is rapidly becoming a serious concern.

Because it's necessary to respect the legal rights of American citizens, any decision regarding disciplinary actions or even termination must be made on a case-by-case basis. An employee discipline policy is therefore critical to assist in the assessment.

Laws Vary by State

According to LinkedIn, to avoid legal issues, how financial leaders react must take into account federal and, importantly, state laws applicable to your workforce, the behavior the employee engaged in and your organization's employee discipline policy. Your organization should make your employees aware of its current policy or any recent policy changes regarding certain types of behavior. Furthermore, finance and HR leadership need to fully understand what legal restrictions, if any, the state in which you operate has regarding specific employee behaviors.

Arrests, Political Activities and Social Media

According to ADP, many states have laws that impact whether an employer can fire an employee based solely on an employee being arrested or having an arrest record. However, most of these laws do not address employment actions based on investigations into whether the employee actually engaged in the conduct that forms the basis of the arrest. Thus, employers should craft their discipline policy carefully and in consultation with legal counsel to address these requirements.

Some states expressly prohibit the termination of employees because they may express certain political affiliations or who engage in political activities outside of work. According to Newsday, these protected activities include running for political office, being active in fundraising activities and working on political campaigns. The law ensures that employers do not attempt to influence employees' voting behavior or retaliate based on that behavior.

Furthermore, as the use of social media continues to proliferate, so does the tendency of certain individuals to freely express their views on race or religion. Some individuals have been fired for these types of postings. This is a complicated area, though state laws generally contemplate that employers need to address situations where an employee's conduct, even if offsite, impacts the workplace or the employer's business.

Policy as Protection

Therefore, your organization should protect itself by implementing an employee discipline policy that explicitly outlines the behaviors that are unacceptable and subject to termination. According to the an industry association, the North American Wholesale Lumber Association, tying these into your existing policies regarding harassment, discrimination or the creation of an environment in which either appears to be acceptable is highly recommended. You can establish a stand-alone policy for off-duty behavior that references your existing policy or make changes to your current employee handbook.

Because these negative behaviors can impact co-workers and other employees and cause issues in the workplace, as long as an organization has an internal policy addressing this behavior, financial leaders will have more flexibility to address unique situations that arise in the workplace in a way that protects the best interests of the business. Thus, having a strong policy in effect — in any state — can aid you in preventing or successfully defending against a wrongful termination suit. However, you must ensure that you and your organization complied with state laws and followed all internal protocols. In addition, the disciplinary actions you levy must be consistent and nondiscriminatory for all employees.

Although it's standard practice for high-level employees to enter into employment contracts or to sign additional documentation stating that they will refrain from certain behaviors as representatives of the business, this is not always standard inclusion in the typical employee discipline policy. If your organization wants more control over the behaviors of its employees outside the office, it must be mindful to do so within full compliance of the applicable state laws.

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Tags: talent Culture engagement