Once an adviser has fully investigated employee wrongdoing, it must decide whether and how to impose discipline. To promote a sense of fairness – and meet employment law requirements in certain jurisdictions – the procedures governing those decisions must include some form of due process for the employees involved. In that context, satisfactory due process simply means having consistent and established procedures for deciding whether and how to discipline an employee. While those procedures will differ between advisers and jurisdictions, common elements will include notice to the employee; a set time frame for decision making; a decision maker with appropriate insight and authority; a range of possible punishments; and the use of objective criteria to impose punishment. This final article in our three-part series identifies the elements of an employee disciplinary process and how managers can promote fairness and due process. The first article
discussed the value of setting expectations for discipline in advance and how advisers can apply discipline consistently in the face of inconsistent local employment laws. The second article
addressed techniques for gathering evidence to support a disciplinary action, including the thorny issue of protecting privilege while building a record. For more on important employment considerations for investment managers, see “Lessons on Separation Agreements That Fund Managers Can Glean From Recent SEC Action
” (Feb. 2, 2017); and “Trending Issues in Employment Law for Private Fund Managers: Non-Compete Agreements, Intellectual Property, Whistleblowers and Cybersecurity
” (Nov. 17, 2016).