What to Do Before Terminating an Employee

Businesswoman employee in suit is stressed and carrying personal belongings in brown cardboard box to walking out workplace after sending resignation letter to executive in office

Certain factors should be reviewed when terminating an employee’s employment. All terminations are not the same and will be slightly different. However, certain procedures can be followed in most situations to avoid a lawsuit against the company. Terminating an employee is a significant event and should be taken seriously and not done hastily. Terminations require careful analysis, attention to detail, and proper planning and should not be routine. Terminations vary based on each termination’s unique facts, circumstances, and issues.

Generally, there are five incidents in which an employee may be terminated. First, the employee violates the absenteeism, tardiness, or No-Call/No-Show policy. Second, the employee fails to meet job performance standards. Third, the employee violates a company policy or rule. Fourth, the employee is insubordinate or engages in some other misconduct. Fifth, there is an organizational change, layoffs, or a reduction in force.

When preparing and analyzing a termination, it is essential to understand the facts and the reasons for the termination. The first step is ensuring you have all the supporting facts. Don’t assume you have all the facts. The second step is reviewing all the documents related to the termination. The third step is considering the risks or legal problems that may arise when terminating an employee. The fourth step is preparing for the termination meeting with the employee.

Before terminating an employee, managers need to understand the employment-at-will doctrine. Employment at-will means that an employee who is hired for an indefinite term is employed at the will of the parties. This means an employee can leave the employer at any time, and the employer can dismiss an employee for any lawful reason. There are numerous concerns to analyze before terminating an employee to ensure it is a lawful termination. Below are four general steps to take before deciding to terminate an employee.

  1. Get All the Facts:

Managers need to gather the facts before terminating an employee and obtain an objective perspective from human resources or outside legal counsel before making a final decision to confirm they have the facts to support a termination. Managers should contact human resources or legal counsel when taking disciplinary action that could lead to the termination of an employee. Managers should seek the advice of human resources before writing a performance review, a performance improvement plan, or severe discipline such as a final written warning, suspension, or termination. To avoid bias and emotional decisions, terminations should not be done without consulting human resources or legal counsel.

  1. Gather All the Documents:

All the documents supporting the termination should be gathered before an employee is terminated. Review the Employee Handbook to support the termination and to make sure you are following company policy regarding discipline and termination. Review the situation with human resources or legal counsel to ensure the situation is managed the same way other similar situations have been handled. Gather all the documents supporting the termination such as any coaching, performance improvement plans, prior discipline, training records, or rules or policies that have been violated. Review the job description and previous reviews of the employee. Review any other information relevant to the termination that may be in the employee’s personnel file or any investigation report that has been gathered.

  1. Assess the Risk of Termination:

Managers need to be aware of the legal issues that complicate a termination. Four types of legal issues will commonly come up: (1) Discrimination/Harassment complaints, (2) Retaliation and Whistleblower complaints, (3) Contract claims, and (4) Claims that involve a situation in which the employee alleges the employer, manager, or another employee has done something to harm the employee physically or mentally. Managers and human resources should review the employee handbook and be aware of the legal issues that may arise to complicate the termination.

Discrimination/Harassment Complaints:

Managers need to talk to human resources or an employment attorney to ensure that the termination decision does not discriminate against a protected class, particularly when other risk factors exist, such as terminating an employee who is the only protected class member in the department or someone else not in the protected class is receiving more favorable treatment.

Examples of situations that should raise concerns are:

A pregnant employee is being terminated for poor performance when her performance evaluations consistently showed she met the employer’s expectations in the past. That set of facts could imply an unlawful motive by the employer.

Another example would be a 50-year-old employee who is being terminated for excessive tardiness when his or her file contains no verbal or written warnings. Again, this could suggest an unlawful motive even if the employer does not have a progressive discipline policy and even if the employee is an employee at will. If the employer does not act uniformly and consistently when it doles out discipline, it can imply the employer has acted unlawfully.

Retaliation/Whistleblower Complaints:

Retaliation and whistleblower issues are something a manager needs to be concerned about as well. Various federal and state laws prohibit employers from terminating employees because the employees complained about unlawful activity. When disciplinary issues occur, and the employee has previously been involved in protected activity (such as filing a discrimination or harassment complaint or filing a workers’ compensation claim), you must be careful proceeding with the termination. In that case, the employee’s activity is protected, and an employer should be careful proceeding when terminating an employee to ensure there is no potential retaliation claim.

Examples of situations that should raise concern are:

If the employee received reasonable accommodation or requested reasonable accommodation under the ADA and the employer terminated them shortly after their request, this could lead to a discrimination and retaliation claim.

Another example is if the employee has participated in an investigation of a discrimination or harassment complaint and is terminated in close proximity to the complaint, this can also be seen as retaliatory conduct by the employer.

Another situation of potential risk would be an employee who has made a complaint about wages or conditions of employment, which is a protected activity under the National Labor Relations Act and is terminated following making the complaint.

There are many situations that should raise awareness, and the termination should be reviewed with human resources or legal counsel to avoid a possible claim or lawsuit by the terminated employee.

Contract Claims:

Managers need to be aware that employment-at-will means an employee may be terminated at any time for a legal reason, and the employee can quit for any reason. The employment-at-will doctrine does not create a contract for a period of time. However, employers must be careful not to make assurances of employment that an employee or an employee may give the employee assurances that they will have employment for a period of time unless they are willing to abide by that promise. If the manager makes certain assurances, the employee will keep their job if they meet certain guidelines or performance improvement plans that may give the employee an oral contract of employment for a period of time. This can create an unintended employment contract with the employee.

Other types of contract claims could include an employee claiming they are owed unpaid wages, overtime, bonuses, or commissions.

Claims of Physical or Mental Harm:

If the employee alleges a manager, another employee, or the company did something to harm or injure them mentally or physically, the employee might file a claim or lawsuit. The employee may allege defamation for being called a thief when the employer terminated them based on an allegation the employee stole from the employer. There are situations in which the employee may believe they have suffered emotional distress because of the job. The employee may need FMLA or ADA for a physical or mental condition, and terminating the employee when they’re going through that situation could result in a lawsuit.

  1. Prepare for and Conduct the Termination Meeting:

When preparing for a termination meeting, you will want to discuss whether the manager communicated clearly with the employee, telling them what they did wrong and allowing them to correct their behavior. Was the incident so egregious that the employee must be terminated immediately? Was the termination based on objective standards commensurate with the infraction? Did the employee have a reasonable opportunity to correct their behavior and has not done so? Are there similar situations in which an employee has been terminated for a similar offense? Is there any evidence that raises red flags? It could be discriminatory or retaliatory and affect the legal rights of the employee.

Employers need to be concerned about possible lawsuits and run their business in compliance with State and Federal law to avoid lawsuits and investigations by state and federal agencies that handle labor and employment complaints of employees. Numerous State and Federal agencies enforce labor and employment laws, and an employee may also file a complaint with one of these agencies. It is important for your business to have a basic knowledge of these employment laws and to be compliant with them. This is important to not only avoid lawsuits but also to create a better atmosphere for employees by treating them fairly and in compliance with the law.

There are several things in mind at a termination meeting. You should have a script, and you will want to be direct and keep the meeting short. The meeting should have a proper professional tone and be dignified by providing information to the employee. The employee may get emotional, and it is not helpful for the manager to get emotional. It is not the proper time to be empathic; you are terminating their employment and should just provide a brief explanation for the termination and provide information about their exit from the company. Have the meeting in a private area. The manager and human resources should be at every termination meeting. Be brief, honest, and respectfully communicate the termination and the reasons for it to avoid making statements based on any opinion or indicating any biases.

Each termination should be investigated to determine if the employer is making the proper decision before terminating an employee to protect the employer from lawsuits and create a fair, equitable, and decent work atmosphere for their employees.

If your small or mid-size business has human resource or employment law questions, please contact Holden Law Firm at (952) 943-3960 for a consultation.