By Robin Thomas, J.D.
No one likes to be the bearer of bad news, and notice of termination is perhaps the hardest news you can deliver. To make matters worse, mishandling terminations can lower employee morale and lead to lawsuits. But, if you allow a poor performer or a disruptive employee to keep working, productivity and efficiency are bound to suffer.
So, terminations are a simple fact of life for managers. However, they don't have to be traumatic or automatically result in a legal claim. If you follow the eight steps recommended below, you can reduce stress and the chances of ending up in court.
The eight essentials
- Follow your policies. Make sure you have followed your own policies as closely as possible, especially your progressive discipline policy, and have a business-related reason to justify any deviations.
- Be consistent. You don't necessarily have to treat every employee exactly the same, but you should treat "similarly situated" employees (those with similar jobs, performance histories, and length of employment) as consistently as possible or have business-related reasons for your inconsistencies.
- Investigate fairly and thoroughly. Before you terminate, make sure you have conducted a fair and complete investigation, particularly in cases of misconduct. In addition, the investigation report should document the reasons for the termination and show you followed your policies.
- Consider the legal risks. Analyze the risk that the termination will cause legal claims. For example, consider the potential for claims of discrimination, wrongful discharge, retaliation, violations of the Family and Medical Leave Act, failure to accommodate under the Americans with Disabilities Act, or wage and hour violations. If you are concerned the employee may file a claim, consult legal counsel. Also, if the termination decision has been mishandled, or if you lack adequate documentation, you should consider asking the employee to sign a release agreement. In such an agreement, the employee waives the right to sue in exchange for some extra benefit, such as additional severance pay.
- Document the reasons for termination. Records in the employee's personnel file should accurately state the reason for termination and include items such as performance appraisals reflecting problems and suggested improvements, counseling memos, written warnings, and investigation results that document any misconduct.
- Plan the termination meeting. In particular, make sure you have 1) picked a good time for the termination conference; 2) selected a suitable location to preserve the employee's dignity and privacy; 3) chosen the appropriate attendees for the conference; and 4) prepared all necessary or final paperwork (such as COBRA notice and final pay).
- Tell the truth. Give the employee a factual reason for the termination. Avoid the temptation to rely on the at-will employment legal defense and thus not give a reason. Also, don't call the termination a "layoff" when it's actually based on performance problems or work rule violations. Misguided attempts to "soften the blow" can cause confusion and lead to discrimination or wrongful discharge claims. The employee is more likely to assume your "real" reason is illegal or discriminatory. Instead, be straightforward and factual, but avoid unnecessary elaboration or injection of personal opinions. Don't try to downgrade the reasons for termination to spare the employee’s feelings or indicate you don’t agree with the decision. Such comments may encourage a lawsuit and be used against you.
- Limit discussions about the termination. Do not discuss the termination with anyone other than those individuals who have a legitimate business need to know about it, like the employee’s immediate supervisor, your supervisor, and legal counsel. Doing otherwise can lead to claims for defamation, invasion of privacy, or other personal injury.
Proper Procedures Reduce Termination Trauma
By following a consistent process that includes these eight steps, you’ll develop both greater confidence in your decisions and help insulate your organization from legal exposure. At the same time, your candor and attention to detail will convey to the employee that the decision, no matter how distasteful, was not arbitrary or illegal.
Robin Thomas, J.D., is Managing Editor for Personnel Policy Service, Inc., 159 St. Matthews Avenue, Suite 5, Louisville, KY 40207, and can be reached at email@example.com, or 1-800-437-3735. Personnel Policy Service markets group legal benefit services and publishes HR information products, including a model Termination of Employment policy.