Is your termination process putting your organization at risk? Letting an employee go is never easy, but having a plan of action will improve the experience for everyone involved, and reduce the risk of wrongful termination lawsuit. Here are some practical tips on how to approach the meeting, conduct the termination, and communicate the changes to your employees.
Legal action can be costly. How costly? Each legal claim brings against an employer in court could cost the company between $50,000 and $250,000 in legal fees and potential settlement payouts’
What is at-will employment? A non-contractual employment relationship between an employer and an employee, where either party can terminate the relationship without notice, at any time, for any reason not prohibited by law.
Mistake #1 Misinterpreting at-will employment
- “At-will” is not absolute
- Burden of proof is on YOU
- Little protection in discrimination claims
- ALL terminations come with risk
At-will employment does not allow termination based on protected class membership including:
- Other protected classes
Mistake #2 Surprising the employee
Address performance issues early and directly so employees know what you can expect of them. Does employee need coaching or progressive discipline?
- Ongoing conversations
- Often includes offering tools to help employee improve
- Employee helps to identify issue and find solutions
- Written (consider when a performance improvement plan would be useful)
- Final Warning
Progressive Discipline Best Practices
- Create a system that works for your organization
- Whatever you pick, stick with it
- Don’t be too specific with your employee handbook as every case may require specific actions and so your manager have some discretion
- Document each step in the process
Terminating an employee always comes with risk, even when it’s done for valid reasons. Progressive discipline can reduce this risk, as it involves a progression of documented actions with escalating consequences. It also demonstrates good faith, as it’s primarily used to give employees with behavioral or performance problems time and opportunity to improve. And if the process results in termination, you can show the termination was for cause.
- An exception to a progressive discipline plan is when serve misconduct has occurred. Examples include: physical violence, illegal acts (such as theft or embezzlement), or intoxication on the job (depending on your policy). Be careful not to act alone on allegations, and conduct investigations if necessary.
Mistake #3 Making the employee unnecessarily uncomfortable
Think about the logistics
- When and where will you have the meeting
- When will the employee be expected to leave
- How will the news be communicated to other employees?
Tip: Be compassionate. Remember that while this meeting may make your day unpleasant and uncomfortable it will affect the terminated employee for much longer.
Mistake #4 Making excuses, apologizing, or changing your story
A truthful explanation shows that you respect them enough to be honest. Watered-Down reasons, like “it’s not working out” or “we would like to be able to keep you on,” or otherwise apologizing may give the employee false hope that the decision is not final.
- Be truthful
- Remain calm
- Stick to your answers
- Don’t be afraid to repeat yourself
- Don’t feel pressured to expand on the reasoning you have given or offer additional reasons for the termination
- You may need to end the conversation if they get physical or ask the same things over and over
Mistake #5 Setting yourself up for an employment claim
- Conduct the termination with at least 2 HR or Management representatives present
- Document the process
- Keep your explanations consistent
- Consider severance agreements in certain situations
- Terminate for bad reasons
- Take allegations as facts – conduct investigations as necessary
- Fire someone unless you can defend their termination to an outsider
Mistake #6 Forgetting how this might affect other employees
A termination will sometimes cause others within a team to leave as well. Think ahead about morale issues or possible changed in the day-to-day feel of the office
- Be as transparent as appropriate for the situation
- Make it clear that terminations do not come out of the blue
- Respect the departing employee by being honest but not unnecessarily detailed
- Make sure employees know they can ask questions and that you will give honest answers