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Beware warnings that could limit future pay

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in Discrimination and Harassment,Human Resources,Leaders & Managers,Performance Reviews

Most HR professionals assume that a warning letter isn’t an adverse employment action and there­­fore can’t be the basis for a lawsuit. And that’s largely true.

But if the warning letter also mentions restrictions on how well the employee will be rated at evaluation time, there may be trouble. That’s particularly true if a bonus depends on the rating.

Recent case: Susan worked for Wyeth Laboratories as a district manager, supervising 10 psychiatry specialty managers who promoted pharmaceuticals to doctors.

The drug company has strict ­ethics rules that forbid any salesperson from pushing unapproved uses for drugs. Essentially, salespersons and ­managers may only discuss government-approved pharmaceutical uses. They are not supposed to tell doctors about other potential uses or ongoing studies that tested the drugs.

Susan reported to her manager that a subordinate had discussed a study with a doctor. Wyeth investigated and discovered that Susan had also vio­­lated the same rule as her subordinate.

Management wanted to fire Susan, but her supervisor talked them into giving her a warning letter. The letter informed Susan that in six months, when her evaluation was due and bonuses would be paid, she would automatically earn a 3 on a 5-point assessment scale.

A few weeks later, Susan accepted an offer from a competing drug company and quit. Then she sued Wyeth, alleging sex discrimination.

Wyeth argued that she couldn’t sue because she hadn’t been subjected to an adverse action.

The court disagreed, concluding that because the warning letter set her evaluation score and might have affected her bonus, it was an adverse action on which she could base a lawsuit. (Gold­­faden v. Wyeth Laboratories, No. 10-1799, 6th Cir., 2012)

Final note: Wyeth won in the end because it showed it had good reason to discipline Susan and her subordinate.

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