How to Terminate Effectively
BY EDWARD T. RUSSEL
While disgruntled former employees now make up one of the most significant plaintiff classes in lawsuits against companies, the manner in which a termination is handled can reduce the risk of litigation. The key is planning and attention to detail. The following tips for termination should aid in this process.
- Establish and Follow Procedures. Establish and follow procedures to assure careful evaluation of all employees, and that a fair and accurate termination decision is made in each case.
- Investigate; Apply Standards. Check and double check; seek details; question supervisors and managers; weigh all relevant factors against previous cases to ensure fairness. Consider: length of employment, promises made, employee's reasonable expectations, past performance, just cause, pending vesting rights to pensions or bonuses, the employee handbook, etc. If employee belongs to a protected class, consider consulting legal counsel. Handle every termination consistently.
- Bring Decision to Top. Involve the President and consult with the HR manager in a small or mid-sized company from the beginning.
- Follow Checklist. Follow a predismissal checklist in the termination meeting. Write down afterwards all that was said by each party.
- Involve a Witness. Your HR manager makes a good witness because he or she should enjoy perceived impartiality, and also can advise the employee about any post meeting concerns such as the employee's existing obligations under confidentiality and/or noncompete agreements, COBRA, any pay that is due, the obligation to return company property, etc. Have the witness compile notes after the meeting as well.
- Be Courteous. Treat employee with respect, act fairly and avoid lengthy or heated discussion, but listen too. Terminate in private and avoid unnecessary comments about employees after they have left in order to avoid a suit for slander.
- Communicate in Writing. Provide a simple letter informing the employee of the termination, his or her last day of employment, any severance pay, vacation entitlement, pension, 401(k), etc.
- State Reasons Consistently. Tell employee the reasons for the termination consistently with any unemployment forms filed with the DET, EEOC, etc. Caveat: Better to be vague than to accuse without proof if unable to substantiate the reason, i.e. theft.
- Preserve Dignity. Allow employee to regain composure by either conducting the meeting where he or she won't have to walk past fellow employees or by allowing the employee to remain in your office a short while.
- Security if Needed. If there is reason to believe employee might harm the company, deny access to customer and other records and the computer system, change locks and security codes, etc.
- When During Week?. Consensus now favors the beginning or middle of the week, early in the day. Employee may then channel efforts constructively towards a job search, filing for unemployment and contacting placement agencies.
- Further Thoughts. Install and use a progressive discipline system. Review the employee handbook to be sure that it reserves all of your rights to terminate.
Comment: Be fair, treat employees with respect and, where appropriate, offer severance pay and outplacement services
© ASSOCIATION OF INDEPENDENT GENERAL COUNSEL 1994; (all rights reserved). This article is not intended as legal advice. Consult a qualified attorney for assistance concerning a specific issue or problem.