You can hardly get through your morning coffee these days without seeing another story about some athlete, model, or actor who abused his wife, trashed her Beverly Hills hotel room, or went all 
Archie Bunker in a racist Twitter rampage. Usually, high-profile celebrities are bound by employment contracts that require strict adherence to an impeccable standard of personal conduct. But what can the average employer do if Walter White, the usually quiet and docile chemist with a spotless work history, decides to break bad over the weekend, uses his RV for a meth lab, and has his mug shot splashed all over the news? Like so many legal questions, the answer is “it depends.”
Generally, under the at-will doctrine, employees can be fired for any reason, or no reason at all, as long as the reason is not illegal. Unfortunately, deciphering whether a reason is “legal” or “illegal” is not as clear as Walter’s blue crystal. Obviously, it is illegal to discipline or terminate an employee based on the employee’s race, religion, or sex, but most off-duty conduct lies somewhere in the gray area. Until recently, most employers did not give a second thought before disciplining an employee for off-duty criminal conduct, but the Equal Employment Opportunity Commission (EEOC) has loudly condemned the practice. According to the EEOC, some racial minorities are disproportionately more likely to be arrested or convicted of criminal offenses than others, so the agency is critical of employment policies that universally disadvantage applicants or employees based on past criminal conduct. As a result, the safest bet for disciplining employees for off-duty conduct is to focus on the job-related consequences of the behavior, rather than the behavior itself.
For instance, it is safer to discipline an employee for unexcused absences incurred during a jail stint than to base the discipline on the underlying arrest. Likewise, while a bank would be justified in terminating a teller who has been convicted of writing bad checks because the teller is in a financially-sensitive position and handles customers’ money, the decision to terminate a janitor for the same reason would be less defensible because the off-duty conduct has no relation to the janitor’s job.
What about noncriminal conduct that carries a social stigma? Can you fire an employee who is caught cheating on her husband or has a second career as a porn star? What about someone whose Internet comments and Facebook posts are littered with racial slurs? Before doling out discipline or dusting off the pink slip for such behavior, you need to answer these questions:
(1) Has the employee’s off-duty conduct negatively affected his or her job?
(2) Has the employee’s off-duty conduct impaired the morale of your other employees or caused a disruption in workplace productivity?
(3) Has the employee’s off-duty conduct gone against your company’s stated mission and values?
If you can answer one or more of these questions in the affirmative, it is likely that disciplining the employee for his or her off-duty conduct will be legally justified. Still, to avoid a wrongful termination claim, you should document the reasons for the employment action with specificity and describe how the employee’s off-duty conduct negatively affected your business. Additionally, if you treat employees differently for engaging in the same conduct, such as in the example above involving the bank teller and the janitor, you need to articulate a legitimate business reason for the disparate treatment.
Bottom line: As employers, there may be occasions when you want to discipline employees for off-duty misconduct. To avoid liability, you should be ready to explain how the employee’s personal behavior had a negative impact on your company’s bottom line.
State laws should also be considered New York has specific statues on discipline for off duty conduct.