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Preparing for an Employee Termination

Posted by attorney Scott Lawson

Terminating an employee is perhaps the most unpleasant, yet necessary, task that an employer must carry out. Emotions run high during the process and, depending upon the situation, it may be necessary to repair damage caused by the employee to relationships, productivity and morale. Added to the unpleasantness is the risk that the terminated employee will take legal action against the company. While it is not possible to stop a terminated employee from consulting with a lawyer, there are a number of things that can be done ahead of time to minimize the risk that a lawsuit will follow:

Make sure the company’s hiring documents include key clauses and disclaimers. At a minimum, your application or offer letter should contain an “at will" disclaimer. This disclaimer states that the employee understands his or her employment with the company is "at-will"; meaning either the company or the employee may terminate the employment at any time. To protect the company in situations where an employee must be terminated for giving false information when hired, the application or offer letter should also contain a “truth or consequences" clause. This clause states that the employee affirms the truth of all information provided when hired and that the employee understands he or she may be terminated if the information was false or misleading. It is important that these and other key clauses and disclaimers be included in a document that is signed by an employee at the time he or she is hired. If the employee is later terminated, these documents help to put to rest any claim that the essential terms and conditions of employment were not understood up front.

Make sure there is a legitimate job-related reason for the termination. An at-will employee may be fired for any reason as long as it is not an illegal reason. Under the law, an employer may not commit unlawful discrimination when terminating an employee. It is also unlawful to terminate an employee for doing something he or she had a legal right to do; such as filing a workers’ compensation claim or complaining about sexual harassment. It is wise to ensure that the reason for termination is legal and that the reason is documented in a carefully-prepared termination letter or, at a minimum, in the employee’s file. Consider conferring with an employment lawyer to discuss the termination and the reasons for it before proceeding.

Make sure performance issues are documented. Along these same lines, i f an employee is performing poorly, and there is a possibility that he or she may need to be terminated, it is important to carefully document all warnings or discussions regarding the employee’s poor performance or failure to abide by company rules. This documentation supports the company’s legitimate reasons for firing an employee and will likely serve to discourage the employee from suing for wrongful termination based upon unlawful discrimination or other reasons.

Quickly but carefully prepare for the termination meeting. Once the decision has been made to terminate an employee, you must act promptly. Postponing the termination until ‘just the right time’ can cause a number problems. First, if the employee gets wind of the situation, he or she may become disruptive and thereby pose a threat to productivity and morale. Secondly, as more time passes, other employees may learn about the impending termination thus causing embarrassment to the individual. This will only serve to ratchet-up the individual’s emotions and anger about the situation. Lastly, a delay will give the employee more time to prepare a legal case against the company.

While speed is important when terminating an employee, it is equally important to thoroughly prepare for the termination meeting ahead of time. Before the meeting, carefully prepare a termination letter and have it reviewed by counsel. Also, be sure to calculate all severance, vacation pay and other amounts due to the employee and have checks prepared. It is also a good idea to notify security of the time of the meeting and plan to have another witness present.

Before the meeting, know what you’re going to say. Specifically you should plan to:

* Keep the conversation to a few minutes, and stick to the matter at hand.

* Avoid making promises you can't keep, such as promising to help the employee secure another job.

* Avoid making excuses or passing the blame. There's nothing wrong with saying you’re sorry about the situation, but be careful regarding anything else you say.

* Avoid getting into an argument with the person. It is fine to let him or her vent, but you can only lose if you start arguing back.

* Plan to collect back keys, company credit cards, computer equipment, hand-held devices or other company property from the person.

Additional resources provided by the author

For more information, visit http://www.lawsonfirm.net/employment_law.htm and download the firm’s termination checklist.

Please feel free to contact the firm for assistance with these issues or for a review of your company’s employment policies and procedures.

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