Chewy and Covetrus Face Off in Veterinary Prescription Dispute

Chewy and Covetrus Face Off in Veterinary Prescription Dispute

By: Isaac Brownstein 

A 2017 study shows that 77% of people consider their cats and dogs to be members of the family—and so it isn’t surprising that, collectively, they’re willing to spend big dollars on their pets. According to the American Pet Products Association, Reuters reports, Americans spent $72.56 billion on their pets in 2018 alone with the Federal Trade Commission anticipating pet prescription drug sales to exceed $10 billion annually.

Savvy businesses—including Chewy, Covetrus, Vetcove, and more—have therefore identified lucrative revenue opportunities to take advantage of by selling veterinary products and services, including prescription drugs. Currently, veterinarians still sell most of the pet medications, but cat and dog owners are also exploring newer options to see which ones offer the most convenience and/or lower prices. After all, people are used to shopping around the clock from the convenience of home with just a few clicks and so it’s a natural progression to get pet prescriptions this way.

The result? A gradual chipping away of the predominance long held by veterinarians for direct prescription sales as well as, in 2021, the eruption of a legal clash between two publicly held companies—Chewy and Covetrus—that have entered the pet prescription space fairly recently. The lawsuits between these two companies are not especially surprising. What’s uncertain, though, is how all will unfold and what impact they’ll have—short term and long term—for the veterinary industry where practices have relied upon prescription sale revenues to help run their businesses.

Legal Nuts and Bolts and Parties in the Dispute

On May 19, 2021, Chewy, Inc. filed a lawsuit in the Supreme Court of the State of New York against Covetrus, Inc. and Vetcove—with the legal matter heating up further after Covetrus countersued in August 2021. Here are high level looks at each of these companies:

  • Chewy is a publicly traded company, founded in 2011, that sells pet supplies online and, in 2018, added Chewy Pharmacy to their business offerings.
  • Covetrus is also a publicly traded company, founded in 2018, and they provide global services for veterinarians. Services include the creation of online pharmacies that are branded for specific practices.
  • Vetcove is an independently-owned company founded in 2015. Vetcove is completely unaffiliated with Covetrus and Vet’s First Choice.

In their lawsuit, Chewy alleges that Covetrus and Vetcove collaborated to redirect online orders of pet prescriptions away from their company through improper collection of customer information and deceptive messaging.

Although, on the surface, this may seem to simply be a dispute among businesses that are competing for the same dollars, at the very heart of it is the veterinarian-client-patient (VCP) relationship and how it should be defined. How this lawsuit is ultimately resolved, then, can impact the very nature of the VCP relationship in the future.

Veterinarian-Client-Patient Relationship

According to the American Veterinary Medical Association (AVMA), the physical examination of pets is an essential aspect of their care. So is an ongoing relationship with the animals and their owners and careful record keeping of their health care, including prescriptions. Traditionally, pet owners paid for and received their pets’ prescriptions as part of an in-person visit. How pet prescription processes have been changing—and what’s acceptable for quality pet care—is a central part of the Chewy versus Covetrus lawsuit.

Pet Prescription Processes

In most states, veterinarians provide pet owners with the prescriptions they need for their animal companions or they approve the purchase of regulated medications and other products.

If pet owners decide not to get the prescriptions directly from their veterinarians’ offices, they can then choose a pharmacy to fulfill these approved products—and some of them select Chewy. If someone orders a regulated product from this online company and there isn’t an authorization on file, Chewy will contact the prescribing veterinarian to get confirmation before fulfilling the order.

According to Chewy’s lawsuit, when their customers participated in this process, they were redirected to buy the medications from Covetrus. This was accomplished, they allege, because Vetcove accessed their customers’ confidential data—and these customers were then sent confusing messaging that guided them to make prescription purchases through Covetrus.

It should be noted that more than 13,000 veterinary hospitals and nonprofit agencies use Vetcove’s purchasing platform in the United States.

Chewy states that, because of these actions, their company has suffered irreparable harm. As a remedy, they want:

  • an injunction that would prevent Covetrus and Vetcove from continuing this behavior
  • compensation for lost profits (dollar amount not stated)
  • compensation because of harm to their reputation

About three months after Chewy filed this lawsuit, Covetrus countersued.

Covetrus Countersuit

In their legal filing, Covetrus states that, because Chewy does not require a written prescription from a veterinarian—instead being willing to contact them for authorization—this is harming the animal’s well-being by removing veterinarians from the health care process. They also claim that Chewy is intentionally suppressing competition, which has the potential to cause veterinarians “substantial financial harm.”

As a further action, Covetrus emailed their veterinarian customers, sharing their belief that Chewy’s business strategy is actually undermining the “indispensable vet-client-pet relationship.”

In response, Chewy says that Covetrus is misrepresenting its lawsuit and business model.

Covetrus is not making comments about Vetcove and any role that its software is playing in Chewy’s lawsuit. Covetrus does deny, however, having a close relationship with Vetcove. As for Vetcove, the company has not responded to Chewy’s lawsuit or Covetrus’s countersuit with the CEO making no public comments on either.

Looking Ahead

It’s impossible to predict how the court system will decide this case, but it’s almost certain to affect the veterinary industry. If, for example, the court system decides that Covetrus is correct and Chewy’s business model doesn’t fit within a reasonable VCP relationship, that will take the industry in one direction; if the decision tilts in another way, that will affect the veterinary world in another one, as well.

 

How Practice Managers Can Keep Up with Changing Employment Laws

How Practice Managers Can Keep Up with Changing Employment Laws

By: Kellie Olah, SPHR, SHRM-CP

Although it has always been challenging for many small business owners to keep up with evolving employment-related legislation, COVID-19 has made this situation even more problematic. Legislation is being rapidly passed, containing new and sometimes confusing information. It can be hard for your practice to keep up but it’s worth the effort because when you don’t have access to the most current information or you lag in compliance, this can lead to numerous problems. The consequences can be as serious as litigation against your practice.

As a general approach, it can be helpful to gather a list of trustworthy resources that you can regularly check. This includes reviewing the most current information on topics ranging from healthcare and injury/worker’s compensation to paid time off, unemployment, retirement, and much more. Once armed with the foundational knowledge you need, you can then determine which tasks you can handle within your practice and which ones require help from an expert, such as an employment attorney.

 

Employment Law Resources

At a federal level, the U.S. Department of Labor (U.S. DOL) provides information on a comprehensive range of employment issues. As just one example, here is their resource page that helps employers and employees to address the impact of the coronavirus. The DOL also provides a newsletter, along with contact information for your state labor office so that you can stay up to date with state-level laws and pending legislation. Subscribe to receive email updates from both a federal and state level (for each state where you practice).

If you come across a legal term that is new to you, or one where you need clarification, the Cornell Legal Information Institute has provided a wiki-style legal dictionary and encyclopedia. You can also find human-resource-related legal advice at NOLO’s free employment law center. NOLO has been publishing legal guides since 1971 and has developed into a trusted website.

You can also glean helpful information from the Society for Human Resource Management (SHRM) website, including free tools and information. This organization has a mission to empower people and workplaces by advancing human resource practices and maximizing human potential.  If you find the free content provided by SHRM to be valuable, you can also consider becoming a paid member.

The National Federation of Independent Business (NFIB) is also a helpful resource, with a small business legal center that provides information to small business owners. Plus, NFIB monitors relevant legislation and advocates for small business interests in courts. You can also find state-related employment law news and, if you need more in-depth information about issues that are specific to your practice, you can become a paid member. With that membership, you can call the legal center to ask questions.

Another in-depth resource is HR-Business and Legal Resources. There, you can find state-specific information on a variety of employment topics. There is a reasonable amount of free content with more available for members. To see if the premium content would be valuable for your practice, you can sign up for a 14-day free trial.

What we’ve provided isn’t a comprehensive list of available resources, but they are some of the most commonly used and trusted ones. If you find another credible source that provides the employment law information you need, share it with the rest of your practice.

 

Next Steps

Once you’ve identified resources for your practice to use and you have signed up for newsletters, email alerts, and so forth, what’s next? These steps can include:

  • deciding who at your practice should monitor all the information that’s coming in; if you have a discrete human resource department, that answer may be easier than if multiple employees are wearing the HR hat
  • concluding which sites and resources end up being the most valuable to your practice; it can make sense to start out by receiving and reviewing information from a larger number of organizations and then focusing more on those that provide the targeted information you need
  • determining which message format works best for you; for example, your practice might find watching videos of employment law updates is the best use of everyone’s time
  • attending relevant online trainings; these may come with a cost, but they’re likely to be much less expensive than traveling to a location where trainings are being held—and, because of the COVID-19, online resources are more practical and becoming more prevalent

Although online trainings may not allow for the in-depth personal networking that can take place over, say, a weekend-long event at a training center, they’re more affordable; can fit within busy schedules (especially if you have access to the videos after a live event); and can be ideal for practices where in-person trainings aren’t often available nearby.

As you learn new information and as employment law evolves, it’s important to review your policies and procedures; update what’s needed; and share the revised information with your practice team.

 

When to Talk to an Employment Law Attorney

The ideal situation would be to have an employment law attorney on retainer— one you trust, and who understands the legal issues that veterinary practices often face, as well as your practice’s unique workplace culture. If that’s not possible, then the next best option is to choose an attorney with expertise that dovetails with your practice needs and consult with him or her when issues of significance arise, or you need clarification on areas of employment law.

Examples of when it can make sense to consult with an employment attorney include, but are not limited to, when:

  • firing an employee; ideally, you always run employee firings past your attorney, but especially if you believe an employee might sue the practice, perhaps because of an employment contract or because he or she is in a protected class
  • an employee files a complaint or sues your practice
  • creating a contract or agreement
  • creating or updating your employee manual
  • bringing in or buying out a practice partner

 

Choosing the Right Employment Attorney

If you don’t have one yet for your practice or you’re looking to switch attorneys, be clear about what you want the attorney to do. If you want him or her to regularly update you on employment law changes, for example, then that’s different than if you want someone available when you want to address a specific issue at your practice.

Consider asking other practices and small businesses for recommendations. Ask what they like about the attorney and if they’ve had any problems with their choice. You can read online reviews of recommended attorneys, but remember to take them with a grain of salt because it’s hard to find an attorney of substance with no unhappy clients. You can also use lawyer directories such as those available through the American Bar Association, and other similar websites.

Once you have a short list of candidates, interview each one. Many attorneys, but not all, offer a free initial consultation so you can get to know one another. This can help you make the right choice. You’ll want an experienced attorney who is well versed in the laws of your state, someone you feel comfortable with and who communicates well without reverting to jargon that can be confusing. By the end of your initial conversation, you should be able to determine if that individual has a personality that you would enjoy consulting with, and has the knowledge base to successfully assist you with managing your veterinary practice.

Associate Contracts for Corporate Consolidators

Associate Contracts for Corporate Consolidators

Veterinary Business Advisors, Inc.

www.veterinarybusinessadvisors.com

As the presence of corporate consolidators in the veterinary field increases, it has become even more important to understand what to look for when negotiating an associate contract with a corporate practice. Generally speaking, corporations can have a significant edge in negotiations because they can cause you to believe that their contracts are non-negotiable. They may, for example, say the following: “This is our contract for everyone.” In reality, everything is negotiable, and it’s your value that allows you to negotiate your own contract.

While it’s true you may have less negotiating power with a corporation than with a private practice, you will have more legal protection under the employment laws with a corporation. Ideally, all contracts should be reviewed by an attorney or translator experienced in reviewing veterinary employment agreements, because contracts are intended to prevent miscommunications in the future. Below are some key points to consider when negotiating a contract with a corporate consolidator (“CC”).

  1. Term and Termination: How long will it be until your contract expires? Does the term automatically renew at this time? Note that, if a contract has a one-year term, that does not guarantee you a one-year employment. The employer may in fact have the ability to terminate you sooner. CCs like to use the term “at will,” meaning they can fire you at any time for any reason. Other ways of termination would be “without cause” with both parties agreeing to give “X” number of days’ notice before termination. Many CCs, though, will not want to give you advance notice, especially if they are taking over a new practice.

 

  1. Schedule: How many scheduled hours per week are you required to work? Beyond that, how many additional hours must be spent calling owners, overseeing patient care, and more? Are there any required emergency hours? What about holidays, weekends, and nights? CCs tend not to give exact number of hours to be worked. They tend to use language such as “minimum of 40 hours” as opposed to “from 35-45 hours.” Specificity is against the interests of the CC.

 

  1. Duties: What, as an associate, are you required to do? Review this, because some CCs may require you to do additional work that you didn’t need to do for old management. Do you, for example, have to organize staff meetings? Participate in marketing? Handle emergencies during work hours? Being specific in the contract almost always benefits the employee. Note that private practices tend to be more willing to mentor you in these duties than CCs.

 

  1. Compensation: Typically, compensation is paid by salary, commission (production), or a combination of both. How is your production calculated? Do you get production reports? Are there any deductions from your salary and, if so, what are they? Is there negative accrual during slow production months? CCs can change how they calculate their production pay. If you’re not aware of how you get paid, you may not realize why your production pay has changed.

 

  1. Benefits: Most practices offer some sort of benefits package, and CCs typically offer larger and better packages than private practices. However, these benefits can be subject to change and are not guaranteed by the employer. CCs tend to comply with state and federal employment laws that govern how benefits are given, while private practices may not, due to lack of knowledge. These benefits are tax deductible and are not calculated as employee income. Therefore, there is a large savings to be gained with a larger benefits package. This usually includes but is not limited to health insurance, professional liability insurance, and retirement benefits. Note that, if a CC offers malpractice insurance, it often does not cover license defense.

 

  1. Exclusivity: Employers will usually require you to perform services for their hospital alone. This would prohibit you from doing any shelter or relief work on the side. This may even prohibit any other type of job, even if not related to veterinary medicine. CCs are no exception here, and you must negotiate specific exceptions if you wish to work outside of the CC.

 

  1. Performance Evaluation: Will you be provided written or oral evaluations? When? Does this correlate to compensation?

 

  1. Signing/Relocation Bonus: In today’s market, veterinarians are valuable and most places will offer some kind of sign-on bonus. CCs can usually offer a significantly higher bonus and, depending on where you are coming from, often offer a significant relocation allowance as well. Most of these bonuses are tied to retention, meaning you must work there for a predetermined amount of time—perhaps one year—to keep the bonus. If not, the money must be repaid. Also, in your contract, it’s important to find out if the bonus can be kept if you are fired without cause. One perk of working for CCs is that, if you are moving, they can often help you to relocate to another one of their locations, which can make the process significantly easier.

 

  1. Non-Competition: The agreement states that the employee will not directly compete with the employer after termination of employment. The provision must state a specific distance and time (e.g., two years, ten air miles). This area should cover where 85% of the practice’s clientele comes from (trade area). When does your non-compete kick in? When does the non-compete become enforceable? CCs often have a much stricter policy than private practices. For example, some do not allow you to work in proximity to any of their hospitals. This could easily double or triple the area you could be prohibited from working in and can change if new hospitals open up. Also, the scope of restricted activity may be broader with CCs. In addition to small animal medicine, they may include intellectual property, research, practice management, and so forth.

 

  1. Non-Solicitation: This agreement states that the employee will not try to poach other employees away from the business to work elsewhere. This would apply even if you are outside your non-compete area. It is important to also know that some CCs will not allow you to solicit employees from any location of theirs, even if you don’t personally know them.

 

  1. Assignment: There is currently a very active market for the sale of veterinary practices. Many employers include provisions that allow your original contract to be signed over to the new owner. This means the buyer would not need to negotiate a new contract with you. It is important to check for this provision, whether you currently work for a private practice or already work for a CC.

 

It is important to understand all aspects of your contract while negotiating your associate contract to decrease any confusion during and after your contract period, whether a private or corporate practice. With the rise of corporations in the Veterinary industry, it is also important to note the differences between what a private practice and corporation could look like relating to an associate contract.

Try to make the contract as specific as possible so there is no ambiguity if an issue arises. Ask as many questions as you need prior to signing to clarify what exactly your job will entail. Always have the contract reviewed by a lawyer familiar with the field and do not feel pressured to sign prior to this. Corporations may be pushy and imply they do not negotiate, but this is your well-being and livelihood, not theirs. Know your value and pursue it in any contract.

 

Compensation Best Practices in 2020

It would be so simple if practice owners could open a fortune cookie for each one of their employees and find the method by which to fairly compensate them.  While there are commonly accepted methods of compensation, their implementation in veterinary practices varies because different entrepreneurs have different business goals.  Also, “fairness” is a relative term that introduces variability into an equation that might otherwise be consistent from practice to practice.  This article describes the factors that practice owners should consider when determining compensation for veterinarians and paraprofessional staff.

Benchmarks

Below is a table that provides a snapshot of current key indicators available for small animal companion practices.  It is not meant to be all-inclusive, but rather to provide some guidelines that enable managers to take the practice’s compensation pulse. They can then determine if the practice is on track for the next year or needs to perform some diagnostics to prevent a fiscal derailment.

Veterinary Compensation

            Many periodicals and books discuss the factors one should consider in establishing a compensation policy for veterinarians. Of particular importance is the question of whether compensation should consist of a fixed salary, a percentage of the revenue generated by the veterinarian and collected by the practice (i.e., commission-based), or a combination of the two. If a commission-based component is present, it is also important to consider how the revenue figure will be calculated. Will it be limited to revenues generated from professional services, or will it include revenues generated from items like over-the-counter medications and foods?    Percentages can also vary in relation to the magnitude of the revenue number that is generated.  Implementing compensation systems in practice requires attention to the details of production calculation and timing of payment. The key to remember is there is NO one size fits all when determining the appropriate compensation for veterinary and non-veterinary staff.  There are numerous factors that go into assessing the actual method used for compensation, which often requires the assistance of an advisor. 

National starting salary information is generally published annually in the Journal of the AVMA. (See: Employment, starting salaries, and educational indebtedness of year-2013 graduates of US veterinary medical colleges, October 1, 2013, Vol. 243, No. 7, Pages 983-987; Employment of male and female graduates of US veterinary medical colleges,  JAVMA October 1, 2011, Vol. 239, No. 7, Pages 953-957.) See also the latest biennial edition of the American Animal Hospital Association’s Compensation and Benefits-An In-Depth Look and the AVMA’s Economic Report on Veterinarians and Veterinary Practices (Wise, J., Center for Information Management, AVMA, Shaumberg, IL (Tel: 847-925-8070). Two periodicals, Veterinary Economics and Veterinary Hospital Management Association Newsletter, also regularly publish helpful articles. In addition, Wutchiett Tumblin and Veterinary Economics published Benchmarks 2019 Well Managed Practices.

Paraprofessional Compensation

Paraprofessionals are often compensated on an hourly basis and the industry has yet to develop widely adopted performance-based compensation models. Paraprofessionals generally report low job satisfaction and high turnover rates. In the 2016 NAVTA Demographic Survey, 38% of veterinary technicians left the practice due to insufficient pay, 20% due to lack of respect from an employer, 20% from burnout and 14% because of the lack of benefits. Full time technicians reported a salary between $15-20 per hour, while part-time technicians reported $14-16 per hour. After taxes, even the well-paid veterinary technicians are only slightly above what is considered the poverty line for a family of four in the United States ($24,300).

According to the United States Bureau of Labor Statistics, the median pay for veterinary technicians was $16.55 per hour in 2018. By comparison, a JAVMA published study on Jan. 1, 2016 of certified veterinary technician specialists reported that the weighted mean pay rate in 2013 was $23.50 per hour.

In AAHA’s 2020 Compensation & Benefits survey, average veterinary employee turnover was 23%.  Turnover was 32.5% for receptionists, 23.4% for veterinary technicians, 10.3% for managers, 16% for associate veterinarians, and 32.9% for all other staff. To compare with the national workforce, Compdata’s Annual Compensation Survey showed that national average turnover was 15.9% in 2010 and 19.3% in 2018.  The chart above can be helpful to calculate a practice’s turnover expenses. Turnover is a pervasive and expensive problem that can be mitigated by learning how to properly motivate employees. 

Lawful Terminations: A How-to Guide

When deciding whether or not to terminate an employee, and weighing the pros and cons, you need to assess the costs and benefits of keeping this employee versus firing him or her. Consider the following:

  • the nature of the behavior or performance issues involved
  • the seriousness of these issues
  • how this employee is affecting other employees or clients
  • how easily you can replace this employee
  • the costs of recruiting, hiring, training and retaining a new employee

If this employee is exposing your practice to significant legal or business risks, then the decision to terminate the employee will be different from one where, perhaps with coaching, the employee could potentially contribute to the company.

If the issues are increasing the workload and responsibility of other employees, then it is important to also consider the ripple effects that the behavior of one employee is having on the entire practice.

This article will review the key considerations when beginning the process of a lawful termination. Start with the question of why you are considering terminating this employee. It is important that you can determine the reason before moving forward with the rest of the process.

It may be tempting to terminate someone’s employment because he or she doesn’t fit well into the company culture, or isn’t especially likeable.  It’s easy to revert to the notion of at-will employment when that’s the case. The principle of at-will employment means that an employee can be fired at any time, for any reason, as long as there is not an illegal reason involved. Some people may conclude that there shouldn’t be a problem with this termination.

An issue can develop if you terminate an employee at will, and then that employee states that an illegal reason was involved. In this case, the employer must prove that this was not the situation.  Unfortunately, wrongful termination claims are not always easy to disprove. They can also harm your practice’s reputation, breed mistrust among other employees, and lead to lawsuits.

Next, we will review the following:

  • reasons for wrongful termination claims
  • the actual conversation about termination
  • information about high-risk terminations

Throughout this article, we will also share strategies to protect your practice.

Reasons for Wrongful Termination Claims

One reason for wrongful termination is employment discrimination. It can include discrimination based on race, color, religion, sex or national origin. An employer also cannot discriminate against an employee because of their disability, age or pregnancy. These are all illegal reasons to fire someone. You also can’t terminate an employee as a form of retaliation. 

An employer has the legal obligation to honor employment contracts, union or non-union, including termination clauses. Not doing so is considered breach of contract. There can also be an implied breach of contract, when a company implies, either in writing or verbally, that employment is protected.

This is not intended to be a complete list of potential wrongful termination claims. Instead, it can be used to show the flaws in simply firing someone, at will. There is a more graceful way to go through the process, and  when followed, it should prevent the employee from being surprised that he or she is getting fired. Therefore, the employer is better protected against claims of wrongful termination.

Poor Performance/Behavior Over Time

It’s important to create and carefully follow a disciplinary policy for your practice. It may consist of rules such as providing an employee who has demonstrated a substandard performance with a verbal warning the first time, a written warning the second, and probation or termination on the third. In order to have an effective disciplinary policy, though, you’ll also need to have clear and consistent policies about employee behavior and performance so that your employees clearly know the practice’s expectations. The policies must be consistently enforced, as well.

When a policy is broken, you should follow your progressive disciplinary procedures in a timely way, and in a way in which the severity of consequences increases if an employee doesn’t correct the behavior. In your disciplinary meetings with that employee, you can then share what policies were broken, why this is problematic, and the consequences.

Document every time that you speak to a particular employee about the issue (such as lateness or gossiping), doing so directly after the meeting and listing the following:

  • date of the meeting
  • specific behaviors discussed
  • policy broken
  • consequence for this behavior
  • consequences if this happens again
  • employee’s responses
  • date of follow-up meeting with the employee

It is recommended that you have another manager at disciplinary meetings. This allows one person from the practice to conduct the conversation with the employee, and the other to take notes and serve as a witness. Be sure to have the employee sign relevant disciplinary documents. Following this procedure gives your employee a chance to improve, while also protecting you, as an employer, from wrongful termination claims or lawsuits.

Keep in mind that each time a disciplinary procedure occurs with an employee, the documents that you create may ultimately end up in court. Be sure to professionally list all pertinent details. Avoid judging or interpreting an employee’s behavior; for example, do not comment that while George says he’s late because of traffic, the real issue is that he’s lazy. Stick to the facts.

If your employee isn’t breaking policies, but also isn’t meeting expectations, you can create a performance improvement plan (PIP). This allows you to share goals and checkpoints, while also offering concrete next steps and support. Be sure to have the employee sign the PIP. Keep this documentation, whether disciplinary or PIP, confidential and safely stored.

One-Time Incident

Although documenting behavior or performance issues over time is best, sometimes it isn’t possible. For example, if an employee steals money, becomes violent at work, or brings illegal drugs to the workplace, then the rule that is broken is so severe that the employee needs to be fired immediately. In that case, what’s important is that you respond to any future situations of this severity at a comparable level of discipline.

Conversation about Termination

If the decision to fire a particular employee has been made, then the next issue to consider is how to have the conversation with him or her. If you’ve provided that employee with verbal and written warnings according to your company’s disciplinary policy, then you have increased your protection. Another option is to consult with your practice attorney to make sure that the termination is solid. This will prepare you in case the employee decides to pursue action against the practice.

Once you’re ready to hold the meeting, be timely about making it happen. However, take into account if that employee has something significant happening that day that could make your timing inappropriate.

It can help to have a termination agenda to keep the meeting on track and provide topics to be covered. The agenda should also include items to be returned to the employee and a reminder to get a confirmation of the person’s current address so a final paycheck can be mailed. Having an agenda can also help to guide all parties involved through what’s likely to be an emotionally-charged and stressful meeting, and help to ensure that you cover all necessary items.

Be sure that the location of the meeting is somewhere private. Then, be direct and clear without being harsh. Explain to the employee that after meeting with that employee to discuss behaviors, including the issuance of verbal and written warnings, the decision was made to separate employment that day. Be transparent and make sure you state that the decision is not negotiable. If the employee tries to debate the decision, don’t engage or try to justify yourself, and avoid saying anything that could be construed as a threat.

Keep the meeting short, lasting no longer than 10 to 15 minutes. The greater the length of the meeting, the more potential that something could be said that could expose the practice to a lawsuit. Close the meeting by thanking the employee for contributions made and extend to him or her your best wishes for the future.

An important topic to discuss is the specifics about the physical separation from the workplace. Should the employee, for example, take his or her belongings now? Or do you plan to meet him or her after hours to take out belongings when other employees aren’t at work? In some cases, the employee may have missed too much work, which led to the termination; in that case, you may want to focus on avoiding a humiliating situation for the person. If the reason for termination is something such as embezzlement, then your main focus would be to have the employee leave the workplace as soon as possible. If the ex-employee has property of someone else’s at work, or vice versa, arrangements must be made to transfer belongings.

Be prepared to answer questions that might arise. You can’t predict what they will be, but a common question is whether you will provide references for that person. Regardless of your response, make sure to protect your company while also treating the terminated employee with respect.

Prepare to provide any relevant information about the employee such as benefits, unused vacation time, or any severance agreement. Summarize all relevant information in a termination letter. This dated letter should state that the employee has been terminated, along with a brief description of why and any other pertinent details.

Afterwards, let other employees know about the termination without discussing any confidential information or making negative comments about the former employee. Be straightforward, sharing information the other employees need to know, reassuring them that the company isn’t eliminating roles. Acknowledge that, in the short term, other employees may need to help to manage that person’s workload.

High-Risk Terminations

These are terminations where employees are likely to sue the employer in connection with the termination. Some situations in which this is more likely to happen include the following:

  • employee is a member of a legally protected class
  • employee is a difficult one
  • employee has a relative who is an attorney
  • employee is surprised by the termination

As far as the first example, federal law prohibits discrimination on the basis of age (over 40), race, color, religion, sex, national origin or disability. In addition, individual states may have laws that are more stringent. When terminating the employment of someone in a protected class, the employer may be vulnerable to anti-discrimination claims for any statements made prior to, during or even after the employee’s tenure. Examples of these statements are as follows:

  • I know it must be hard to balance your job responsibilities with the new baby.
  • Most 50-year-olds would have trouble meeting the physical demands of this job.

Comments such as those are commonly part of a casual conversation with no discriminatory intent, but could add credence to a wrongful termination claim.

Other employees are difficult: argumentative and/or obstinate. They may refuse to take responsibility for their behavior or performance, becoming defensive and blaming others. Employers may be reluctant to fire this type of employee, fearing confrontation or retaliation. The practice can effectively be held hostage to this type of employee and, when fired, the employee may respond with a lawsuit.

When employees have relatives who are attorneys, it may make it easier for them to sue. The relative may even make the suggestion, and if legal services are offered to the disgruntled employee at a reduced fee, or even for free, there are fewer barriers to suing. Finally, surprised employees may be so devastated that they legally challenge the termination. These situations highlight the importance of carefully creating and following policies as described.

Conclusion

The termination process is almost always uncomfortable, carrying with it a varying degree of legal risk for your practice. Your goal is to make the process as amicable as possible while continuing to minimize risk along the way. The recommendations in this article won’t cover every situation but should provide broad guidelines that you can tailor to your unique circumstances. It is recommended to consult with an employment attorney experienced in the laws for your state.

Read more on the WMPB website here!

Low-cost Fixes to Prevent OSHA Violations

Does the phrase OSHA violations cause you to shudder in fright? OSHA, the Occupational Safety and Health Administration, should not be a scary monster – it exists to ensure you and your employees stay safe in the workplace. Slay the monster with some of these low-cost fixes to common violations.

Maintain easily accessible safety data sheets on all chemicals.
Did you know that your distribution representative has electronic copies of all safety data sheets for products they sell? Take five minutes to ask them to email those over, then put the sheet in a folder on every computer’s desktop.

Required Posters

All required posters can be obtained for free from OSHA! Make sure you check what other posters are required in your state and see if those posters are also provided free of charge. You can find the OSHA posters at this link: https://www.osha.gov/Publications/poster.html

Drink Station

At your next employee meeting, ask the staff to decide on a safe location for drinks. It should be convenient but as far away from animal and laboratory areas as possible. Then, purchase some stylish washi paper tape or fun paint and have a teambuilding activity to define the new space.

Secondary Labels

Containers of chemicals that you or your staff refills from the manufacturer’s container must be labelled. Once you have your safety data sheets, it will only take a few minutes to make a label. Consider using waterproof printable labels, a laminated piece of paper, or purchased pre-printed labels specific to your chemicals. It can seem daunting to find and label every bottle of alcohol or jar of scrub, but why not try turning it into a game of scavenger hunt bingo with the staff? Many hands make light work.

Some OSHA fixes are easier, cheaper, and faster than others. If you need to establish or rejuvenate your training and reporting programs, we are here to help. Just get in touch with our human resources gurus to find the right solution for you!