There is a recurring problem in employment matters: elevating a policy or a rule over the substance and taking disciplinary actions that end up harming an employee, very possibly the organization, or both.

A recent story out of Madison, Wisconsin, highlights the problem. An African American security guard was called a racial slur by a student. The guard spoke up for himself and told the student not to refer to him by that word. Good for him for speaking up. His problem? He repeated the slur back when telling the student to not say it. His use of the word, even if to simply say "don't call me X," violated the school district's "zero tolerance" policy against the use of racial slurs. The violation resulted in termination of employment, with the principal explaining that racial slurs are banned, regardless of context. For its rigid adherence to this rule, the school district had to contend with a labor grievance, a walkout protest by students, backlash from the community, and national attention and notoriety. The incident was discussed in the New York Times and also in a Twitter post from Cher, who offered to pay the individual's legal fees.

Zero-tolerance policies have a purpose and that is to set a standard and an expectation. A zero-tolerance policy draws a clear line that an employer does not condone certain behaviors, whether that's discrimination, sexual harassment, theft or use of racial slurs. And employers should most definitely set such standards and create a workplace culture that upholds those values.

However, the policy or rule cannot be applied in a formal and shortsighted manner.

Too often, organizations apply these policies without thought or consideration to the harm meant to be prevented or the context for the violation. Now, I imagine as soon as I mention the word "context," someone will want to respond back that this leads us down a slippery slope or that it is unfair or confusing to have one rule but multiple outcomes. I agree that it can be confusing to not have a bright-line result to a bright-line rule. That confusion can be overcome by understanding and communicating why a one-size-fits-all approach cannot work all the time. However, I am not easily persuaded about the slippery-slope fears.

There may be situations where a bright-line rule requires a bright-line response. Let's say a rule says, "do not intentionally set fire to the building." I cannot imagine a situation where intentionally setting fire to a building is not severe misconduct (not to mention a crime), thus justifying immediate employment termination. Now let's imagine a rule that says, "do not kill anyone on work premises." That appears to be a straightforward rule, one where a violation should also result in immediate employment termination (as well as criminal prosecution), correct? Not so fast.

What happens if an employee kills a violent attacker in the workplace? Should the employer respond by immediately terminating employment? Should the employer be trapped by arguments about the slippery slope or by how confusing it is if employment is not terminated? I would hope not. Rather, after evaluating the situation and after exploring questions or concerns with human resources or employment counsel, the wiser action would be to commend the employee and determine whether he or she may require a leave of absence to deal with the trauma.

Similarly, in this situation with the security guard, I would have hoped the school administration evaluated the purpose of the zero-tolerance policy. What harm is the policy meant to avoid/erase? I imagine the policy is meant to prevent throwing racial slurs at someone, to prevent belittling, bullying or harassing others. The policy cannot be meant to erase the racial slur altogether; it's likely found in literature books in the school's library, after all.

Even assuming an employer intends to erase the racial slur from its premises, context still matters. If we take as a given that the security guard violated the policy, then out of fairness the inquiry has to shift to the appropriate response. This incident could have served as a teaching moment for all employees. The security guard could have been counseled or at most reprimanded that the use of the racial slur is unacceptable, even when only parroting it back to someone. The individual could have been coached on how to respond appropriately. For example, "do not call me the N-word" or "do not throw racial slurs at me." The individual could also have been coached on how to report the problem to administration, which would then be responsible for addressing the situation with the student. All of these responses would have upheld the employer's policy without an unduly harsh result for the employee.

I want to clarify that in an "at-will" situation, an employee can be terminated for a good reason or a bad reason, so long as it is not a legally impermissible reason. Even then, I would hope an employer would use this power wisely and rationally.

Unfortunately for the school district, this was not an at-will situation. The security guard is in a union and likely protected by the "just cause" standard. Briefly, that means the employer cannot discipline an employee or terminate employment in the absence of demonstrable misconduct. An employee protected by the just-cause standard has a contract right to challenge employer sanctions. And the employer faces the burden of proving (likely to an arbitrator) that the "penalty fits the crime."

In this case, I had serious doubts an arbitrator would consider termination an appropriate penalty because the security guard did not use the word to harass or discriminate against someone, and there were other training or disciplinary options available to avoid future violations of the policy. To remedy a violation of the just-cause standard, an arbitrator could reinstate the employee and also order back pay. Fortunately for the security guard, the school district reinstated him, shortly after his union filed a grievance under the collective bargaining agreement.

In summary, supervisors and administrators should use zero-tolerance policies to set a standard and as a tool to create a cultural value. However, violations of that standard require an evaluation of the context and, regardless of whether it is an at-will or just-cause environment, the fair response against the employee.

Attorney Nilesh P. Patel serves as counsel at the Day Care Council of New York Inc. He advises over 90 child care employers on human resources, employment law, and labor relations matters. He is a 2002 graduate of the University of Wisconsin Law School and a 1995 graduate of the University of California at Berkeley.