Telling someone "you're fired" is fun for neither party. If an employment relationship does not work out, employers should aim to make the process as painless as possible; both for the sake of the employee—and to ensure that the employer does not open themselves up to legal trouble down the road. Depending on the situation, a terminated employee may take legal action against the employer, the supervisors involved in the decision, or the terminated employee's co-workers. Employers should take every step to ensure that does not happen.
It is important to remember that nearly every state is an employment-at-will state. This means that the employer can terminate the employee at any time and for any reason—including no reason at all. As mentioned in recent posts in this employment law series, the employer's right to terminate at any time for any reason without being subject to challenge has been limited by state and federal legislation and court-created exceptions. (See posts by my colleagues Clayton Prickett and Jason Palmer discussing some exceptions to the at-will doctrine.) It is in these exceptions where recently terminated employees might believe they have a claim arising from a termination, so employers should understand that an at-will employment does not necessarily preclude the possibility of wrongful termination lawsuits and be careful when carrying out a termination.
Effectively mitigating the risks associated with terminations begins before hiring and persists throughout the entire employment. There is no way to properly prepare for every possible situation, so the best course of action is to control those variables that can be controlled.
Here are some best practices for notifying an employee that their employment has been terminated and carrying out the termination. When notifying an employee that their employment has been terminated, remember to D-O-C-U-M-E-N-T everything.
Document. Documentation is an employer's best defense. Documenting the problems leading up to an employee's termination provides a clear timeline. A clear timeline of problems, attempts to rectify those problems, and notice to the employee they were struggling gives employers a strong case for termination. An employer should document the employee's performance and any notes concerning why they should be terminated, documenting specific events or incidents in the process. Using specific, verifiable events or incidents provide much more leverage against complaints made by a former employee than an unsubstantiated opinion about poor performance. Employers should also ensure that documentation is collected and reviewed by someone other than the employer's direct supervisor.
Other people. Consider having other people attend the termination meeting. Typically, the employee's direct supervisor and a human resource representative attend a termination meeting. This approach helps avoid a situation in which it is one person's word against another's as to what occurred during the meeting.
Counsel. As always, employers should consider consulting with legal counsel before notifying an employee of their termination. Employment laws may vary depending on the state, industry, and the size of the organization, so it is important to know what they are before an employer acts to make sure they are protected legally, and to make sure the employer has done their due diligence.
Uniform. An employer should uniformly comply with its company's policies, contracts and past practices. If an employee chooses to sue, the employer will be in a much better position if the employer followed a uniform, consistent process. Employers should review pertinent policies and contracts before they make a termination, so they can ensure they are following their own rules.
Meet in person. An employer should resist the urge to notify the employee of termination by phone, text, or email. There are few benefits to avoiding the face-to-face notification, and the impersonal nature of being terminated by email can be harmful to an employee's confidence and may even lead to resentment. When terminating an employee in person, an employer should have something prepared so the meeting can be short and concise.
Exit-Interview. Employers should consider whether to use an exit interview or questionnaire to collect the terminated employee's perspective about potential areas of concern for the organization. It is not common to conduct exit interviews in termination situations, but hearing about employee complaints this way may be better than learning about them later from an employee's attorney or the Equal Employment Opportunity Commission. Additionally, the value of a terminated employee's perspective cannot be overstated because a terminated employee may speak more candidly about problems with the organization than any employee on staff ever would.
Notice to the organization. The employer should prepare a clear, brief and general explanation about why the employee is no longer with the organization to share internally with those affected by the employee's departure.
Treat the employee with respect. While this may seem to be common sense, the manner in which an employer notifies an employee of termination can be inadvertently disrespectful. The day an employee gets fired is a hard day for them. An employer should avoid attempts to lighten the mood by making jokes during the termination meeting; the employee most likely does not find anything about getting fired funny. If applicable, an employer should explain any re-employment assistance the company offers.
By following these best practices and remembering to D-O-C-U-M-E-N-T, you can shield your organization from legal repercussions and mitigate an unpleasant situation for departing employees.
Up next in this series: Combatting the Risks of Departing Employees, we discuss what an employer should do after terminating an employee. Specifically, "Post-Termination Interactions: Announcement, Exit Interviews, and Reference Checks and Access to Employee Records." Stay tuned.