Q: We recently terminated an employee, and the meeting did not go well. The employee was very surprised about the decision and became angry, and the manager responded by saying it was not her decision and she did not agree with the termination. Now we are concerned the employee will file a lawsuit, though there really is no basis for a claim. How can we handle terminations more effectively in the future?
A: No one likes to be the bearer of bad news, and notice of termination probably is the worst news you can deliver. Most managers, regardless of the underlying justifications, get stressed out just thinking
about firing an employee. And to make matters more difficult, many employers are wary of terminating even their least effective employees for fear of discrimination or wrongful discharge lawsuits.
Terminations don’t have to be traumatic, though, or automatically result in a legal claim. If you focus on two important goals and follow the ten steps below, you can make terminations less stressful for everyone and help your organization stay out of court.
Any time you have to deliver the termination decision, you should have two goals in mind: (1) the sending of as positive a message as possible to the employee being terminated, as well as to the rest of the workforce; and (2) the protection of the organization from litigation.
The first goal may sound unattainable – how can a termination ever be a positive experience for the person being terminated? Even though the news of the termination itself may not be pleasant, your handling of it can directly affect the employee’s reaction and will send a message to your other employees. Thus, for example, if you are rude and insulting to an employee during the termination meeting, you will offend the employee and send a message of disrespect to your other employees.
Alternatively, if you calmly explain the reasons for termination to the employee and are generally respectful and positive, the employee will appreciate your action and may accept it as fair, even if he does not like the decision. And, you will send the signal to your other employees that you will treat them in a similarly positive and fair manner.
As to the second goal, protecting your organization from litigation, the best advice is to follow a well-defined process of checks and balances. You should be able to show the business-related reasons for the
termination decision and to document that you treated the employee in a fair and consistent manner. To attain this second goal, you should make the following ten steps part of your termination process:
- Follow your policies as closely as possible, especially your progressive discipline policy. A government agency or court faced with an employee’s claim typically will look first at whether the employer followed its normal policies and procedures. Thus, you should make sure you have considered the following questions:
- In cases of performance problems, did you give the employee an opportunity to improve?
- If the employee violated a work rule, is termination the appropriate discipline based on your policies and past practice?
- If you didn’t follow your policies as written, do you have a business- related reason to justify your decision, such as the nature or severity of the employee’s actions?
- Treat employees as consistently as possible. Most courts do not require you to treat every employee exactly the same, or to follow the exact procedures for each employee, in order to be consistent. Rather, they look to see if you treated “similarly situated” employees (those employees with similar jobs, performance histories, length of employment, etc.) in a similar manner.
- Investigate thoroughly before terminating, particularly in cases of misconduct (such as violations of work rules, harassment, or theft). The investigation should provide sufficient documentation of the reasons for the termination and show that you followed the organization’s policies.
- Make sure the termination is not a surprise. In most cases of ongoing performance problems or misconduct, the employee is not fired for a first offense, with the exception of incidents involving egregious behavior. Accordingly, the employee should have been warned about performance problems, given an opportunity and timetable for improvement, and advised of the consequences for not improving. And, even in the cases of serious misconduct that warrants immediate termination, the employee should be aware of the likelihood of this consequence from the employer’s handbook or other distributed policies.
- Analyze the risk for legal claims as a result of the termination. For example, you should consider the potential for the following claims:
- Discrimination, especially if the employee was not treated consistently and is a member of a protected class (such as female, disabled, minority, over 40, etc.);
- Wrongful discharge, if policies were not consistently applied;
- Violations of the Family and Medical Leave Act, if the employee was terminated while on leave;
- Failure to accommodate claims under the Americans with Disabilities Act, if the employee was terminated for nonperformance of the job and had health problems; and
- Wage and hour violations, if overtime or wages due were not properly paid.
If you have reason to believe the employee may file a claim, you should consult legal counsel. You also should consider asking the employee to sign a release agreement (a waiver of the right to sue the organization in exchange for some benefit, such as money). This step could limit legal exposure if you do not feel the termination decision was handled properly or if there is little documentation showing you followed your policies correctly.
- Carefully document the reasons for the termination. The employee’s personnel file should accurately reflect the reason for termination and include such items as performance appraisals reflecting problems and suggested improvements, counseling memos, written warnings, and investigation results that document the employee’s involvement.
- Plan the termination meeting. In particular, you should make sure you have considered the following issues:
- Timing of the termination. Friday afternoon may not be the best time since the employee has only limited options to take any positive actions to respond to the termination (such as look for a new job). In this situation, the weekend becomes a fertile time for getting angry about the action and considering litigation. Thus, terminating earlier in the week probably is better.
- To preserve the employee’s dignity and privacy, notice of termination should be given in a private meeting.
- Attendance at the meeting. Typically, two employer representatives, normally the immediate supervisor and a representative of the human resources department, should be present so that one can act as a witness to the discharge conference.
- Final paperwork. Have necessary items such as the COBRA health insurance continuation notice and final pay available.
- Give the employee a factual reason for the termination. Do not avoid giving a reason and rely on the “at-will” relationship (which technically allows employers to terminate any at-will employee at any time and for any lawful reason or even for no reason). Also, do not call the termination a “layoff,” if the termination is in fact the result of performance problems or work rule violations. These misguided attempts to “soften the blow” can lead to claims of discrimination or wrongful discharge since the employee will likely assume that you are hiding the “real” reason for the termination.
Instead, you should be factual and should not elaborate or interject personal opinions. In addition, don’t try to minimize the reason for termination to spare the employee’s feelings or indicate that you don’t agree with the decision. These comments can be used against you in a lawsuit.
- Allow the employee to leave with dignity. While terminated employees should not be allowed to linger so long as to be disruptive to coworkers, you should allow enough time for employees to say goodbye and gather belongings. Avoid having a security escort unless there is a legitimate concern about potential property damage or theft or undue interference with other employees’ work.
- Limit discussions of the termination to those individuals who have a legitimate need to know about it. Typically those people include the employee’s immediate supervisor, your supervisor, and legal counsel. Doing otherwise can lead to claims of defamation, invasion of privacy, or other personal injury.