If you hire employees, sooner or later you may have to terminate employment with one of them. Terminating an employee can put your company at risk for a wrongful termination suit, so it’s important to protect your company as much as possible. This article provides some best practices for terminating employees.
Note, we’re not talking about laying off employees. A reduction in workforce is a different thing altogether. We’re talking about firing employees. Though “at will” employees can technically be let go at any time, for any reason, or for no reason at all, firing is almost always done for cause—because of the employee’s performance, actions, or lack of ability. When faced with letting a worker go, taking a few simple precautions can go a long way toward preventing a costly lawsuit.
Documenting and Remediating
Just as doctors have to practice “defensive medicine” due to the ever-present threat of a malpractice suit, business owners need to consider “defensive termination” to help prevent claims of wrongful termination. Continuing the metaphor, one way to discuss possible rationales for firing a problem employee is to “couch” them, in medical terms:
Acute Causes. In medicine, acute conditions are sudden and severe—like a heart attack or a broken bone. An acute cause for termination would be a single, sudden incident that is serious enough to justify letting the employee go. Perhaps the worker is caught stealing, showed up drunk to work, or yelled at a customer. A single act can be cause for termination if it’s egregious enough.
Chronic Causes. In health care, a chronic condition is one that develops over time, generally starting small and gradually becoming worse and worse. Chronic causes for termination include continual (though sometimes relatively minor) failures or behaviors that add up over time. These might include neglecting to complete assignments, chronic absenteeism, a tendency to waste time, gossiping, and sexual harassment.
In general, it’s much easier to terminate an employee for acute causes. Every employee knows bad behavior is likely to result in termination. It’s still a good idea to carefully document the situation—including statements from co-workers if applicable—to ensure that all of the details are recorded. You’ll have to use good judgment regarding how quickly you move forward with the firing, but with this type of situation, you’re often left with no choice.
Chronic causes are more difficult because they involve less obvious behaviors that add up over time. When you find yourself working with a problem employee, you can help protect yourself and your company by calling attention to whatever it is the employee is (or isn’t) doing that is unacceptable. In a calm, private setting, coach the worker in order to help him or her understand what is expected. Give both positive and constructive feedback. Document these interventions so you have a consistent record of calling attention to the problem behavior. This documentation will be helpful down the road if you have to make the ultimate decision to terminate.
Regardless of whether the behavior is acute or chronic, firing best practices suggest that termination should never come as a surprise to the employee because the employer should have clearly communicated what is acceptable beforehand and provided coaching along the way.
Once you’ve made the decision to terminate an employee, you’ve got some legwork to do.
Consider asking the employee to resign. If there has been no gross misconduct on the part of the employee, you might think about asking the worker to resign. Resignation can help improve the soon-to-be-former employee’s prospects for finding another job, which might help prevent contention. It’s not a fool-proof shield for lawsuits, but it can be helpful.
Notify Human Resources. For chronic situations, your HR department (if you have one) should already be in the loop. Schedule a meeting to let them know of your decision to fire and give them an opportunity to provide counsel on the best way to approach the situation.
Notify your IT department. Whether you have an IT department or a single person who handles the technical aspects of your business, inform the most senior technician in confidence of the impending termination, without disclosing the reason for the termination. IT will need to catalog all access the employee has (including cell phones, email accounts, cloud access, SaaS accounts, social media, and so on) so access can be suspended all at once.
Figure out the timing. Experts differ on whether there really is a best time to fire someone. In an acute situation, the only possible time is often right now. For more chronic situations, there are two main schools of thought:
- Many claim the best time for letting an employee go is near the end of the day on a Friday. If you choose this option, make sure to give yourself enough time to conduct a calm termination meeting and get the person out the door before the rest of his or her co-workers begin leaving for the day (or the week). Helping a terminated employee avoid embarrassment will go a long way toward preventing retaliation.
- The alternate view is that firing early in the week helps to transition the former employee from the mindset of full employment to the process of looking for another job. It also means the employee isn’t as likely to brood over the situation all weekend and storm in on Monday morning, ready to make a scene.
The timing will depend on many things, including the type of behavior that warrants the termination, the personality of the employee, and any other exigent circumstances.
Know your COBRA requirements. This is serious, and if you don’t have an HR department or employment attorney to advise you regarding continuation of health coverage, consult the official advisement from the Employee Benefits Security Administration of the Department of Labor.
Prepare your documents. If you’ve conscientiously documented the employee’s job performance throughout his or her tenure at your company, make copies to give to the employee at the termination meeting. Gather records from disciplinary coaching sessions, as well as pages from your employee handbook regarding behaviors deemed unacceptable. You might want to include a copy of the person’s employment application as well as your formal job description outlining expectations for the position for which the person is being fired. Finally, you’ll probably want to write a formal termination notice, explaining in brief the employee’s behaviors, including dates and times of any attempts at remediation. Indicate the date and amount of the employee’s final paycheck and any benefits the employee will receive and when they will expire.
Conduct the meeting face to face. Nobody should ever be fired via email, voicemail, or text message. Have a venue picked out, and call the employee in. Make sure it’s somewhere private where you won’t be observed or disturbed. It’s even better if it’s near a door through which the fired employee can discretely exit. The best way to get the employee into the meeting is to visit his or her workspace in person and say, “I need to talk with you in my office.” In the case of remote employees, you may not have the luxury of a face-to-face meeting so a phone call may be the next best option.
Have another person present. Ask another person to sit in on the meeting. (Don’t include more than one additional person—that can feel too much like a jury.) You might invite a business partner, an HR manager, or even a corporate counsel to be your “second.” You want two things: a second person to help diffuse tension and another set of eyes to serve as a witness. Brief the other person beforehand if he or she is not up to speed.
Calmly explain what’s happening. Make it clear to the employee that he or she is being terminated. Provide any paperwork you’ve collected or created and give the worker time to go through it, if he or she desires. Make it clear your decision is final and not up for discussion. Explain the timing of the employee’s final paycheck (or have it ready right then). Explain what you are or aren’t willing to say or do regarding recommendations or employment verification.
Let the facts speak for themselves. Don’t draw out your explanation. If you’ve done your job right, you’ll both know why this is happening. Be firm but polite. Treat the person with respect—even if you feel he or she doesn’t deserve it.
Be ready for questions. Sometimes the loss of a job is hard for a person to assimilate—even when it’s expected. Make sure you have ready answers to the obvious ones:
- “What did I do wrong?”
- “Will I qualify for unemployment?”
- “What about my benefits?”
- “What are you going to tell the other employees?”
- “Will you give me a reference?”
- “Can I have another chance?”
Meanwhile, over in IT…. As soon as the meeting begins, your systems administrator should immediately go to work disabling the employee’s access to any and all systems and accounts. Make sure they change the codes on door locks, if necessary, as well as voicemail systems. Check and double check! Allowing a vindictive former employee continued access to sensitive systems and facilities is a recipe for disaster.
Collect all company property. Make sure you get keys, tools, uniforms, access badges, laptops, company phones, and anything else that might belong to the company.
Arrange a time to collect personal items. Offer an after-hours or weekend appointment for the employee to clear out a desk or locker. Do not give the fired employee unsupervised access to his or her former workspace.
End on a positive note. You might say, “I’m sorry this didn’t work out for you or for the company, but we really hope you find a great place to land.” If the person is being fired for gross misconduct, you might end with, “We appreciated the good work you put in. I wish you the very best luck in finding another position quickly.”
Escort the person to the door. When it’s over, it’s over.
After the Termination
Be prudent when informing co-workers. You’ll want to inform the person’s close co-workers and vendor contacts as quickly as possible. Don’t go into details—it’s possible they already know why. If you put this announcement in writing, your best bet is something like, “As of the end of business today, [Employee’s Name] is no longer with the company. We wish [him or her] the best in the future. Any questions should be directed to [Spokesperson].”
Reassign the former worker’s duties. Be sensitive to your remaining employees when reassigning duties. Make it clear whether you’ll be hiring a new person or whether the terminated employee’s responsibilities will be assumed by others.
Keep quiet during hiring. When hiring someone to replace the terminated worker, you don’t need to give any details about whether the previous employee was fired or left voluntarily. Keep it simple, and be discreet.
Be ready for calls. Eventually, you’re likely to get a call from someone asking about your former worker’s time at your company. Designate the person who should field such calls, and be very clear about what can and can’t be said. Always assume the person on the other line is actually an employment lawyer with a tape recorder, trying to gather “ammunition” for a wrongful termination lawsuit.
Move on. Don’t dwell on the bad situation, and encourage your remaining employees to do the same.
There are several things you should absolutely avoid doing when you terminate an employee. Before making the final decision to terminate, make absolutely certain you’re not firing for reasons that may be discriminatory (race, gender, religion, national origin, disability, age, genetic information), for the refusal to commit an illegal act, because the worker was injured on the job, or to retaliate against a whistleblower. Be familiar with both state and federal regulations as well as other legal requirements, such as the Family and Medical Leave Act and the Military Leave Act.
Also, be careful not to discuss your former employee disparagingly with co-workers, vendors, or other parties. Negative comments can get back to a disgruntled former worker and provide cause for a defamation lawsuit.
Treat both current and former employees with respect—even if you feel they don’t deserve it.
NOTE: This article is not intended as and does not constitute legal advice. We recommend that you direct legal questions regarding hiring and firing to a qualified human resources professional or employment attorney.