The Loud Legal Issues Hiding Behind “Quietly Quitting” Employees | Venable LLP

Quiet quitting can happen in virtually any workplace and has become a buzzword to describe employees who perform the bare minimum required by their job, yet still work enough to avoid a termination for job abandonment. Much has been written about the phenomenon of quiet quitting, but quiet quitting does not occur in a vacuum. When complaints about an employee indicating a quiet quitting scenario surface to in-house counsel, the company’s lawyers must unpack the facts and circumstances to determine whether there are any legal issues driving the employee’s behavior. The following are a few of the potential liabilities that in-house counsel must vet when evidence of a possible quiet quitting situation percolates up to the general counsel’s office.

Does the Quiet Quitter Raise Any Classification of Pay Transparency Compliance Issues?

Underperformance may arise when an employee feels they are overworked and underpaid. As employers know, employee classification under the Fair Labor Standards Act (FLSA) can be tricky. Generally, to be considered exempt from overtime pay, employees must earn at least the minimum salary threshold set by the FLSA and any applicable state law. This salary test is the easy part of the analysis. In addition to the salary test, employees must also satisfy a duties test to be classified as exempt. The lines between exempt and non-exempt duties are often grey for employees who perform relatively uncomplicated administrative duties but are required to do so on a time-sensitive basis. It is not uncommon for employees in such positions to experienced low job satisfaction that negatively impacts productivity. But employers should be careful not to revert to kneejerk corrective action if there is a risk that the employee may be improperly classified, because it may prompt the employee to seek legal counsel or file a claim with the government. Misclassification claims are expensive to defend against and often contain fee-shifting, liquidated damages, and penalties provisions under state law. Before taking corrective action against a quiet quitting employee, an employer should ensure the employee is properly classified as part of the analysis regarding how best to respond to the employee’s lack of productivity.

Employee misclassification is not the only compliance issue related to pay that may arise when unpacking the circumstances around a quietly quitting employee. As we previously wrote, in many cities, such as New York City, covered employers will soon need to include the minimum and maximum annual salary or hourly wage in all advertisements for all covered job, promotion, or transfer opportunities. Some jurisdictions, including California, require the disclosure of compensation upon employee request. Again, confronting a quietly quitting employee about underperformance may prompt the employee to demand to know how he/she is compensated compared with others in similar roles in an effort to seek an increase in compensation. In certain states, a request for pay range information is a protected activity that insulates an existing employee from termination for making such a request, which raises the possibility that an employee may allege that a termination for underperformance was merely a pretext for termination based on the employee’s request to see the pay range for his/her position. Employers must ensure compliance with these laws in dealing with quietly quitting employees.

Is the Quiet Quitter Juggling Other Employment During Business Hours?

For many employers, remote work has increased employee productivity and agility, but it is not without its downside. Increasingly, employers are being forced to confront scenarios where employees are performing duties for multiple employers during the same business hours without disclosing the competing work demands to each employer. In extreme circumstances, there have even been instances of an employee obtaining employment but then farming his or her duties out to another individual who is not an employee of the company. These types of deceitful schemes are feasible in jobs that do not require much supervisor-subordinate contact or on-camera meetings and implicate the disclosure of sensitive, confidential information to third parties who are not bound by an employment relationship with the employer. Employers must review their on-boarding processes to ensure that remote employees are properly vetted and supervised in a manner that requires regular on-camera availability and accountability.

Is the Quiet Quitter’s Supervisor Complying with Company Policy?

Quiet quitting often comes to the employer’s attention through managers and supervisors holding employees accountable for their lack of productivity. But what if the employer’s discussion regarding a manager’s corrective action plan for a quietly quitting employee reveals a pattern of unproductivity for other employees reporting to that same manager? Human resources managers and legal counsel must remain vigilant for performance issues at the management level that create or exacerbate the employee relations issue that is resulting in the underperformance of the employee. This is particularly so when employee relations issues are presenting across a group of employees who all report to the same manager, and the employer discovers that the manager has not been fully compliant with company policy in the management of his or her subordinates. Employers must ask the right questions of frontline managers to determine whether the manager’s management actions are in line with company policy or, in the alternative, are the root cause of the lack of productivity by employees.

Quiet quitting is not a new phenomenon, but it may present thorny legal issues for employers.