Employee Misconduct: Common Types & How to Address It (2024)

It’s difficult to imagine that there are some employees who are willfully creating havoc in their own workplaces. Unfortunately, it’s true. Each year, companies suffer the consequences of employees who throw caution to the wind and put their employers at risk. Theft, fraud, harassment, crude behavior, and other problems can happen to the best employers. Addressing employee misconduct effectively is essential to building a safe, inclusive workplace and creating an ethical organizational culture.

In this article, we’ll examine the types of employee misconduct there are and how you can handle misconduct effectively at your workplace. You’ll also find tips for tightening up your current disciplinary process, including when it’s time to terminate an employee. Find out what steps you need to take if an incident of employee misconduct occurs and how to protect your business from wrongful termination lawsuits.

What is employee misconduct?

In the simplest definition, what is employee misconduct but an intentional disregard for corporate rules and expectations? An employee misbehaves or makes a bad decision. This negative behavior jeopardizes any trust the employer may have in the employee. Employee misconduct is a deliberate violation of a written or implied employee policy. This misconduct can bring with it inevitable consequences, from basic verbal and written disciplinary action to suspension and employment termination (and possible legal action depending on the severity).

No employer wants to face this kind of scenario, but it happens too often when employees go unchecked and become disengaged from their employer over time.

Read on to learn about how to handle employee misconduct in more detail.

What are the types of misconduct?

There are two types of misconduct: general and gross. One is not as serious as the other, but both require managers to take action when it comes to negative employee behavior.

General (simple) misconduct

The first type, general (or simple) misconduct, involves behavior that doesn’t intend to harm others or the company. It usually does not require immediate termination of any employee. But it does mean that the employee’s immediate supervisor and HR need to document and carry out any disciplinary action to correct it. An example of general employee misconduct may be an employee who is chronically late to work or one who has made an off-color remark to a co-worker. Their actions are undesirable but not intentionally out to sabotage the company.

Additional examples of general misconduct may include:

• Inaccurately reporting information on a job application – discovered after the employee has been hired
• Not following the orders of a direct supervisor
• Getting caught smoking in a non-smoking area of the property.

These are offenses, but they can be corrected and do not require termination on the spot. First-time issues may require nothing more than a written warning for employee misconduct and monitoring of the employee for a period of time. Or it may require more decisive action such as suspension.

Gross misconduct

In the case of gross employee misconduct, an employee has acted in a way that warrants immediate termination — the legal term being “summarily dismissed”. This kind of behavior is egregious in nature, meant to cause the company and other co-workers harm.

Usually, the actions of the employee are enough to cause the company to have no choice but to terminate their employment and escort them off-premises immediately. This includes a first offense if it is severe. Employees may be fired with no notice, and their final pay may be withheld if it is due to financial or property damage to the company.

Examples of gross misconduct may include but are not limited to:

• Theft of property or finances from the company (including co-workers, customers, and vendors) or by way of fraudulent transactions
• Property damage or negligence caused intentionally by an employee
• Failure to follow safety protocols that put the employee and co-workers at risk
• Serious insubordination.

Other employee misconduct examples are highly offensive behaviors, like making verbal and physical threats of violence, bullying, sexual harassment, and stalking. These all warrant immediate dismissal from employment. Organizations in many industries consider intentional breaches of confidentiality gross misconduct. In workplaces with drug and alcohol policies, being under the influence of these substances on the job can be grounds for immediate termination.

It’s important to note that employee misconduct can occur both on a brick-and-mortar location as well as virtually on a remote team. An example of this could be an employee who leaves their camera and microphone up while talking badly about the company CEO during a virtual team meeting. Or an employee who sends an offensive group email — like the GoHealth employee terminated for sending a racially offensive image.

Consider also that an employee may be intentionally violating the terms of their employment by maintaining a side-job with a competing firm or running a business that directly conflicts with their main employer.

How to address and handle employee misconduct

You should never ignore employee misconduct. Handling incidents of employee misconduct ineffectively can lead not only to decreased employee morale but also to costly lawsuits. For instance, a 2019 wrongful termination lawsuit cost one company more than $1.1 million when it failed to provide enough evidence that it had fired an employee for violating a work policy.

There are several things your organization can do to address and handle cases of employee misconduct effectively.

1. Get an effective disciplinary policy in place

Your employees need to understand what the consequences for misconduct are.

Your disciplinary policy should explain disciplinary action for employee misconduct, what progressive steps will be taken in the process and what the grounds for immediate termination are. Be sure that your employees are aware of this and sign off on this in the employment agreement. Also, make this policy easily accessible, for instance, by including it in your employee handbook or company wiki.

2. Outline a process of reporting employee misconduct

Indicate how employees can report a misconduct incident and to whom? Can they do it anonymously? It’s essential to protect all parties involved in a complaint, whether in the reporting phase or the investigation process.

In fact, in some organizations, the gap between people who’ve observed unethical behavior or misconduct and those who report it exceeds 30%. Employees might fear retaliation and feel that the organization won’t take any action. For this reason, it is essential that your team members understand how they can report employee misconduct safely and how your company will process these reports.

3. Investigate any and all claims of employee misconduct

It’s your responsibility to ensure nothing is left out. Define how you are going to investigate misconduct, who is going to be involved, who will be interviewed or observed, and other aspects of the investigation plan.

Bear in mind that your employee misconduct investigation and handling process needs to be in line with the local legislation.

4. Gather information and document everything related to the incident

You’ll need this information for investigating employee misconduct so that you can handle it in an effective way. Document exact dates, times, places, and conversations related to the employee misconduct incident. You need to document your investigation to have defensible proof if your employee decides to take legal action. Also, in cases of safety misconduct, OSHA requires thorough documentation.

5. React swiftly but carefully to worker misconduct

If employee misconduct happens at your workplace, you need to be quick to take action and start handling the situation to maintain the safety and security of the workplace. Be careful and take an active stance. This may also help you prevent further misconduct such as retaliation.

6. Communicate the company policy on employee misconduct

If an incident occurs, it is critical to use this moment to remind all other employees that this kind of behavior will not be tolerated. Promote an ethical workplace culture and empower employees to report misconduct if and when they witness it.

7. Decide on an external communication plan

Misconduct by an employee can be embarrassing and disruptive to any business. Often, the press gets involved, and people post on their social networks. For this reason, you need to have a plan for communicating the incident to the necessary sources and to internal employee teams to protect the company.

8. Consider getting external investigative support

If an impartial internal investigation isn’t possible, you should get a third party to conduct a fair and unbiased employee misconduct investigation. This is also important if you don’t have a trained workplace investigator on board. Furthermore, if you’re dealing with a complex, potentially time-consuming complaint, it might also be a good idea to consider an external investigator.

9. Review the documentation with an employment attorney

In any employee misconduct case, it’s critical to have legal representation. Employees often sure for wrongful termination or discrimination; therefore, having the expertise of an attorney on-call can protect your business from the aftermath.

10. Train employees from day one on your misconduct and disciplinary policies

Make sure employees know what your organization expects from them and what support they have if they become frustrated or angry, or otherwise unproductive. Require all managers to model the appropriate behaviors.

11. Maintain consistency

Have a set of employee misconduct forms so that you handle and investigate every case in the same way. Use the same terminology, so there is no confusion. This also goes for any disciplinary actions taken, such as verbal and written warnings, demotions, and other elements that come with the territory.

12. Continue to review your employee misconduct policies

Ask if your existing policies still reflect the company’s reality. For example, how are you going to investigate harassment and discrimination in a remote setting? Your policy might need an update.

Over to you

Handling employee misconduct is unpleasant for anyone involved. However, having a solid process on addressing it will help you make your organization a better, safer, and more inclusive place to work. Use the above tips to create an employee misconduct plan for managing any events from disrupting your organization.

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