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Everything You Ever Wanted To Know About Employee Personnel Files

Clients often ask us what types of documents should, or should not, be kept in employees’ personnel files, and who should be given access to such files.  Below are some general guidelines on these issues.

What types of records should be kept in employee personnel files?
The following types of records should be maintained by the employer in employee personnel files:  applications; offer letters; records of salary changes; forms signed by the employee to secure or change benefits; attendance records; performance evaluations; forms signed by the employee acknowledging his or her understanding of, and agreement to abide by, the employer’s policies; employee awards and commendations; records regarding disciplinary actions; records of employer property issued to the employee; training records, including injury and illness prevention program training records; verification of references; verification of employment provided to subsequent prospective employers; transfer requests; records of leaves of absence; wage attachments/garnishment notices; notice of union membership and dues check-off; and records of termination and reasons therefor.

What kinds of records should not be kept in employee personnel files?
Not all employee records should be kept in personnel files.  Certain records should be segregated because of privacy and confidentiality concerns, and to prevent claims that others’ access to certain information exposed an employee to retaliation.  The following kinds of records should be kept separate from an employee’s personnel file:  verification of the right to work in the United States (Form I-9); EEOC charges and related documents; DFEH charges and related documents; employee grievances and complaints and related documents; workers’ compensation claims and related documents; medical information (discussed in more detail below); any information that may be defamatory; and any information that is not job-related.

What about payroll records? 
Payroll records (i.e., records of hours worked, wages paid and date of payment, amounts earned as straight-time pay and overtime, and deductions) are generally kept separate from personnel files.

What about a supervisor’s notes regarding an employee’s performance or disciplinary issues?
A supervisor’s notes regarding an employee’s performance or disciplinary issues should generally not be kept in an employee’s personnel file.  Instead, a supervisor’s notes regarding these issues should be kept in a separate file maintained by the supervisor.  However, if the supervisor actually gives the employee a performance evaluation, counseling memo, disciplinary memo, or other similar document, these documents should be kept in the employee’s personnel file.

What about records that contain medical information about an employee?
Medical information about an employee is considered extremely confidential, and the Confidentiality of Medical Records Act significantly restricts an employer’s use and disclosure of such information.  Medical information includes any individually identifiable information in possession of or derived from a health care provider or health care service plan regarding a patient’s medical history, mental or physical condition, or treatment.  Any employer who receives medical information regarding an employee must establish appropriate procedures to ensure its confidentiality and protection from unauthorized use and disclosure.  These procedures may include, but are not limited to, instructions regarding confidentiality to employees and agents handling files containing medical information and security systems restricting access to files containing medical information.  Employers should restrict access to employee medical information to supervisors, managers, and others with clear business reasons for the information.  Employers are also advised to keep employee medical information separate from other personnel records, under lock and key if possible.  If the information is stored electronically, special access codes should be required.  A complete discussion of an employer’s obligations under the Confidentiality of Medical Records Act is beyond the scope of this article; please contact us for additional information.

Who should have access to employee personnel files?
Because of concerns about employee privacy and confidentiality, access to employee personnel files should be restricted to those persons with clear business reasons for the information. Employee personnel files should also be stored in a secure place.

Do employees have access to their own personnel files?
Yes; employees (and, in some instances, former employees) have the right to inspect all personnel records that relate to their performance or to any grievance that concerns them.  This inspection right extends to records that contain information on the employee’s qualifications for employment, promotion, additional compensation, termination or other disciplinary action.  It does not, however, extend to the following:  (1) records relating to the investigation of a possible criminal offense; (2) letters of reference; or (3) ratings, reports, or records that were obtained prior to the employee’s employment, prepared by identifiable examination committee members, or obtained in connection with a promotional examination.

Employment Agreements

In several prior issues of California Veterinarian, we provided information regarding an assortment of legal issues, running the gamut from a veterinarian’s duty of care with respect to dangerous animals to responding to a subpoena to insurance-related matters.  In this issue, we switch gears in order to analyze another issue of interest to California veterinarians—the use of employment agreements between veterinarian employers and their employees (including veterinarian employees).

While veterinary practitioners are not legally required to maintain formal employment agreements with their employees, such agreements can be a useful way to clearly specify pertinent terms of employment and avoid disputes regarding such terms.  As we will detail, employment agreements may include terms relating to such items as terminability, compensation, dispute resolution processes, and many other items.  Employment agreements may contain as little or as much as the parties wish.  Therefore, if an employment agreement is used, it is not necessary that the agreement contain language relating to every single term or condition of employment.  In this regard, employers who are generally comfortable operating without a detailed employment agreement, but want to reduce certain specific items to writing, may do so.  The following is a list of several topics that an employment agreement may address.

Status of Employment
Unless otherwise specified, employment in California is presumed to be “at-will”; that is, either party may terminate the employment relationship at any time, provided that the termination is not in violation of law or public policy (e.g., an employee may not be terminated simply because of the employee’s race).  Where the parties seek to transform the normal at-will relationship into one under which an employee may only be terminated “for cause,” it is important to have a written document memorializing the particular items that may justify termination.  If the employer also has in place an incremental discipline system with steps such as a warning, followed by probation, followed by termination, it is very important to clearly describe this system in writing so that there will be no confusion over whether the designated steps were properly followed.

By the same token, even if the parties wish to maintain the at-will presumption normally attendant to employment, they may still want to reduce this arrangement to writing in order to minimize the chances of there later arising a dispute in which it is contended that the employment relationship was one that was terminable only for cause.  In this vein, certain dealings between the parties during the employment relationship can sometimes serve to alter “at-will” employment to “for cause” employment.  One such example is where the employer, after hiring the employee on an “at-will” basis, is understood to tell the employee that the latter would not be terminated unless he/she engaged in some form of misconduct.  In such a case, while the original understanding may have been that employment was “at-will,” this classification is not etched in stone if the subsequent course of dealing shows an intention to change the classification.

Of course, a written employment agreement memorializing at-will employment status does not act as an absolute insurance policy against future disputes.  However, such an agreement definitely does make it less likely that a dispute will arise, and the burden of establishing a transformation of employment to “for cause” status is more significantly more difficult to meet in the face of a written agreement.  In fact, California courts have held that an implied agreement of “for cause” employment may not exist where there is an express contract to the contrary.  For this reason, an employment agreement setting forth the nature of a particular employee’s employment can be useful in forestalling future disputes about the circumstances under which the employee can be terminated.

Although not legally required, a written employment agreement may also be useful for purposes of setting forth an employee’s compensation.  This may be the case even when an employee’s actual compensation may vary from period to period (i.e., when the employee is paid on a commission or piece rate).  For example, it is important to compensate your exempt employees at a rate of no less than two times the state minimum wage for full-time employment.  The current minimum wage in California is $6.75 per hour.  Thus, in order to qualify for exempt status under California wage and hour law, an employee must earn the equivalent of $13.50 per hour based on a 40-hour work week, or $28,080.00 per year ($2,340.00 per month and $540.00 per week).  If the parties wish to ensure that a particular employee’s compensation meets the exemption criteria, it would be best to include a provision in a written employment agreement indicating that the employee will receive a monthly salary equivalent to no less than $540.00 per week (the California Division of Labor Standards Enforcement indicates this figure is derived by multiplying the required monthly salary—at least $2,340.00—by twelve, then dividing by 52).  In this manner, even if this minimum standard never actually comes into play as a factual matter, the parties will have clear documentation indicating that the employee will always be sufficiently compensated to meet the requisite standard.  This, in turn, will ensure that, at least insofar as compensation is concerned, the employee will meet the requirements for exemption.  In order to take into account future increases in the minimum salary required for exemption, you may also put in a “floating” standard in the agreement which indicates that, should the state minimum wage increase, that the employee will always be compensated at a monthly rate equivalent to at least two times the state minimum wage for full time employment (computed on a weekly basis).

Obviously, an employment agreement also may contain provisions regarding other aspects of salary, including time of payment and the like, as well as language regarding additional benefits attendant to the employment.

Arbitration Provisions
Although a thorough discussion of arbitration provisions in employment agreements is well beyond the scope of this article, some employers prefer to include arbitration clauses or other dispute resolution processes in employment agreements. There are a myriad of advantages and disadvantages inherent in such processes, and the propriety of including an arbitration or similar provision in an employment agreement depends on the unique circumstances of each employment relationship.  If you are considering including such provisions in an employment agreement, you should contact a qualified attorney to explain the benefits and detriments of these alternative dispute resolution mechanisms.

Prohibitions on Other Employment
In the veterinary and other professional contexts, it is often understood between the parties that the employee’s employment is to be exclusive.  However, other than legal constraints on competition during employment, there is nothing that formally prohibits an employee from performing work for another business.  If the parties wish to make clear that the employment is exclusive even as against non-competing ventures, they may include a provision in an employment agreement indicating as much.

Parties who wish to enter into an agreement prohibiting or constraining post-termination employment activities, even activities of an employee that are in ostensible competition with the former employer, must be very careful, as such non-competition provisions are usually unenforceable in California.

No matter what provisions parties decide to include in an employment agreement, such provisions should be carefully reviewed before the parties execute the agreement so that both parties are cognizant of their respective rights and obligations.  An employment agreement means little if the parties do not know what is included therein, or if the agreement is ambiguous or confusing in its terms.  The whole reason for entering into an employment agreement is to obtain greater certainty than would attach in the absence of such an agreement.  Pay attention to the terms of the agreement, and make sure you understand what they mean.  If you are uncomfortable with the terms or effect of an agreement, or have other questions or concerns that are not satisfactorily being answered, consider consulting a qualified attorney.

Duty to Warn: Related Issues

In the previous issue of California Veterinarian, we began a series of articles which delve into assorted legal matters that are of increasing concern to California veterinary practitioners.  Our first article, “All Bark and May Bite,” outlined relevant law regarding a veterinarian’s duty of care with respect to warning of an animal’s dangerous propensities.  We attempted to provide certain general principles that may be applied in determining whether a duty to warn exists in a given set of circumstances.  As we detailed, very little specific law exists in regards to a veterinarian’s duty to warn of an animal’s dangerous tendencies.  There is even less on the subject of exactly how that duty is discharged vis-à-vis different classes of individuals.

In this issue, we offer suggestions on steps veterinarians can take in order to fulfill relevant duties of care to staff, owners, and third persons.  Keep in mind that it is not our goal to impose hard and fast rules for veterinarians or to delegate universal standards of care on behalf of CVMA.  Rather, the following are to be considered simply as practical tips for limiting potential liability based on an individual’s claim that a veterinarian failed to discharge a duty to warn.

The most important step veterinarians can take to limit potential liability to staff is to adopt and follow clear internal policies with respect to the intake and examination of dangerous animals.   Written policies and good record keeping are the key.  If a veterinarian examines an animal patient whom he or she believes poses a bite or other serious risk to humans, that veterinarian should have in place a defined process for identifying the animal as dangerous.  This process should be followed each and every time such an animal is examined.  For example, in order to prevent injuries to veterinary technicians and other staff, a veterinarian might consider having owners fill out forms for each new animal brought to the veterinarian which seek information regarding the animal’s behavior.  For animals identified as dangerous (either by the owner or veterinarian during examination), veterinarians might consider labeling the pet’s file with a warning such as “handle with care—bite risk” or similar indication in order to put staff on notice of the propensities of the animal.  In instances where a dangerous animal patient is being examined, advance notice should be provided to staff so as to allow them to be aware of the potential danger while in proximity to the animal.  If necessary, physical restraints on dangerous animals, such as muzzles, should be used.

Vigilance for dangerous animals should not end with the veterinarian.  Staff should be encouraged to notify the veterinarian and other staff members in order to better inform each and every person in the office about the potential risk.

Obviously, keeping staff members safe is and should be a top priority for veterinarians.  However, most veterinarians (whether because of staff allegiance, the fact that staff to some extent “assume the risk”, workers’ compensation considerations, or otherwise) are probably less concerned about liability to staff then to animal owners or third persons attacked by animal patients.  As we discussed in the last issue of California Veterinarian, it is unlikely that a veterinarian will be held liable to an animal owner for a failure to warn of the animal’s dangerous propensities where the owner has knowledge of these propensities.  Whether this knowledge is pre-existing or acquired from a treating veterinarian following an examination is immaterial.  Thus, it is important for veterinarians to notify animal owners when there is reason to believe the animal poses a risk.  Although it is never pleasant to inform an owner that his or her animal is dangerous, providing the owner with such information and notification creates a shield against liability to the owner in the event the owner is later injured by the animal.

As one would expect, documentation of warnings provided to owners is well-advised.  There are two ways in which such documentation might be carried out.  First, a veterinarian may simply make a written notation in the animal’s chart that a warning was given to the owner. Second, a veterinarian may also provide an actual written warning to the owner, confirming the warning that was provided in person. (In this regard, note that veterinarians should not substitute such a written warning for one given personally to the owner.  From a public relations perspective, it is important that the warning be communicated orally so that the owner does not feel blindsided by a later-received written warning.)  The advantage of providing written notice to the owner, of course, is that there can be no debate later on about whether and to what extent a warning was given.

One thing to keep in mind with respect to the nature of the warning given to an animal owner is to avoid being unduly narrow or vague in describing the potential danger posed by the animal.  By acting affirmatively to provide a warning, the veterinarian may be assuming a duty to disclose all potential dangers.  Providing a narrow description of the danger posed may be problematic in the event that injury is later caused by an action by the animal that would have been subsumed within a broader “category” of warning.  The owner may be able to argue that while the veterinarian discharged his or her duty with respect to warning of Risk A, the veterinarian failed to warn of Risk B (which was the risk that manifested itself), and was therefore negligent.  Therefore, when in doubt, err on the side of providing a broad, as opposed to narrow, warning regarding the animal’s dangerous propensities.  Similarly, do not minimize the danger posed by the animal in order to soften the blow on the owner or otherwise make the news more palatable.

As was the case with regard to minimizing potential liability to staff, following clear guidelines is also important in the veterinarian/owner context.  Veterinarians should avoid situations where a warning is given to one owner about the danger posed by an animal, but not given to another owner whose animal poses the same or similar danger.  Be consistent in how you handle individual cases.  Adopt written policies defining what tendencies are sufficiently dangerous to require a warning.  Persistent and violent attempts at biting will likely give the veterinarian reason to provide a warning.  For less aggressive (but still dangerous) behavior, veterinarians will have to make judgment calls on whether the particular quantum of animal conduct should generate a warning.  Of course, do not lose touch with common sense.  If an animal shows no dangerous tendencies, do not feel that a warning is necessary just to protect yourself from liability.

Third Persons
A veterinarian’s duty of care with respect to third persons (i.e., those other than staff or owners) is largely coterminous with the duty owed to owners.  Obviously, it is highly infeasible for veterinarians to somehow safeguard the public at large from each and every dangerous animal that passes through a veterinarian’s office.  Although given the paucity of law on the issue it is difficult to say with absolute certainty, it is likely that a veterinarian’s discharge of his or her duty to warn as against an owner will protect that veterinarian from liability to a third person.

For example, if a veterinarian examines a particular animal and determines during that examination that the animal poses a substantial bite risk to humans, the veterinarian, as indicated above, should warn the owner of this risk.  If the veterinarian does not provide such a warning, he or she could be held liable based on negligence principles to an ignorant owner who is subsequently attacked by the animal.  Liability could flow to third persons on the same theory.  If the owner was not informed by the veterinarian of the observed dangerous propensities and has no knowledge of those propensities, an injured third person (or the owner if the owner is sued) could charge that it was the veterinarian, not the owner, who acted negligently.  On the other hand, if the owner is duly warned, there is no basis for assigning liability to the veterinarian, rather than the owner.  It is the owner, not the veterinarian, who has the primary responsibility for the control of the animal.

No matter what specific steps you feel are best utilized in order to protect yourself from potential liability for a failure to warn, the most important thing is to document and stick to whatever policies you implement.  One relative luxury veterinarians have with respect to this issue is the lack of any clearly defined standard to which veterinarians must adhere in the duty to warn context.  This circumstance in essence allows veterinarians to create their own “standard of care” by instituting internal policies such as those mentioned above.  The drawback is that a failure to adhere to this self-created standard may be used as evidence of negligent conduct where a staff member, owner, or third person is injured by a dangerous animal patient.  Note, however, that with the likely increase of litigation arising from animal attacks, the institution of internal policies is, in the aggregate, a desirable and perhaps necessary tool to combat veterinary liability, even though documenting and following such policies may be inconvenient.