Hiring new employees has always been a time-consuming, expensive process, as much an art as a science, as employers search for someone who is both skilled at what they do and also aligns with the company culture and values. One of the hangovers from the pandemic and the Great Resignation is that most employers desperately need employees right now and may be spending more time on hiring in recent years than they have in the past.
Now may be the perfect time to reevaluate your hiring and onboarding processes, including whether or not you should include a probationary period. At first glance, a probationary period appears to be a win-win; a period of time at the beginning of the employment relationship where both employer and employee can evaluate whether the new hire and the new job are a good fit. But first looks can be deceptive.
Probationary periods have their origins in union shops where employers subject to a collective bargaining agreement could terminate a new employee without the need to comply with restrictions on termination imposed by the union contract once those employees are eligible to join the union. Over time, non-union employers also embraced the concept as a way to evaluate a new employee under differing standards than those typically part of the employment relationship, and in doing so, inadvertently created a disconnect with the law in most states.
Employers lost sight of the concept of “employment at will”; the law in every state but Montana that either the employee or the employer may end the employment relationship at any time, for any or no reason – subject to state and federal laws that prohibit discrimination or retaliation. In short, an employer’s and employee’s respective rights during a probationary period are no different than the rights that exist after the probationary period is concluded. Every employee, whether employed for days or decades, is subject to the same conditions of continued employment and standards of conduct, making a probationary period unnecessary.
In addition, the existence of a probationary period, especially if the policy is poorly drafted and/or enforced, becomes a perfect example of the law of unintended consequences. Sometimes employers wrongfully believe that the existence of a probationary period prevents a wrongful termination lawsuit if the employee is terminated at any time after the end of the probationary period; it does not. Conversely, employees sometimes believe that once the probationary period is successfully completed, they cannot be terminated other than for sufficient cause; and some courts agree. There are rulings which provide that successful completion of a probationary period implies obligations to the employee that make it more difficult for an employer to terminate under the “at will” standard, instead requiring that termination must be for cause.
So, are probationary periods always a bad idea? Not necessarily, as long as the policy and purpose behind the probationary period are well reasoned, planned, implemented, and most importantly, consistently enforced.