Firing an Employee Requires Tact, Legal Know-How

On occasion employers ask me if there is a procedural protocol to follow when terminating an employee. Typically, there is a process to follow when terminating an unwanted employee, but only after analyzing the facts carefully.

Employers can have numerous reasons to terminate an employee, ranging from gross misconduct to the belief that the employee simply doesn’t fit in the overall representation or image of the company.

Typically, the first determination I make is whether the employee is at-will, contractual or quasi-contractual. If the employee is either contractual or quasi-contractual then generally the terms of the contract or documents making the relationship quasi-contractual dictate. Usually such documents indicate the terms and conditions of termination. Employees generally desire a contractual relationship as they know the terms and conditions of employment and are generally in a more secure position than that of an at-will employee.

However, if the employee is deemed “at-will” (meaning the employee is employed for an indefinite term) then there is a procedure that employers should follow to make the process simplified, consistent with the overall goal of minimizing any a wrongful termination suit by the disgruntled employee.

At-will employees can generally be fired without notice and without cause. This is the common law and is typically noted clearly in any employment policy or handbook governing the employment relationship. This means you don’t have to give an employee any reason for terminating that employee.

Although an employer does not have to provide a reason, some employers do and in such a case it is important that employer not state a reason repugnant to the law. For example, an employee cannot be fired in order to deprive the employee of justly earned compensation or commission (a breach of the implied covenant of good faith and fair dealing) or because of one’s race, gender, etc.

Once you decide to terminate an employee, the termination conference itself becomes important. In order to handle this termination conference properly, you should follow several guidelines.

1. Two employer representatives should be present.
2. Get to the purpose of the conference quickly. Don’t beat around the bush.
3. Explain the decision briefly and clearly. Don’t argue with the employee in an effort to justify your decision, and don’t apologize for your decision. Tell the employee why he or she is being terminated if you so choose, however do not feel compelled to give any reason. One can always provide a generic reason, such as, “over the course of your employment you have not fulfilled the position well and as such you do not fit in the company’s future plans”.
4. Explain fully any benefits that he or she is entitled to receive – i.e. unemployment, COBRA, vacation pay.
5. Don’t say too much, since what is said during the termination conference can become part of the basis for a subsequent lawsuit.
6. Be organized and prepared for the termination conference, and give the distinct impression that you are confident that the right decision has been made. In this regard, you may need to rehearse what you are going to say and how you are going to handle the termination conference.
7. Let the employee have an opportunity to have his or her say and pay close attention to what is being said.
8. Take notes. If the employee acknowledges that his or her performance has not been good or makes other statements that support the termination decision you have made, make sure that you write these comments down so you will remember exactly what was said.
9. Be courteous. Remember that you are not merely trying to be in a position to win a lawsuit if one is filed – you are trying to prevent it from being filed in the first place.
10. The termination conference should be documented. This would include what the employee was told, what the employee said, and perhaps what the employee did not say. That is, if the employee does not dispute the reason for discharge, this should be noted. The employer representatives who attended the conference should sign the document.

I would suggest that you consider with whom will the employee be replaced? For example, if the employee is over forty years of age and he or she is replaced with someone who is considerably younger, you create evidence that may be used against you. On the other hand, if you replace the employee with an employee in his or her protected class (over 40 years-old) it will be difficult for the employee to allege age discrimination.