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.
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.
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.
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.