Three Important Factors to Consider Before Firing an Employee

Issue: November 2011 by in Inside The Magazine, Legal

Firing employees has always been a necessary component of business as employers try to retain the most competent individuals in order to propel their business into profitable territory. Sometimes, businesses find it necessary to release some lower capacity individuals back into the employment pool in order to make space for rising stars. In the face of dark economic times, however, there is a shift in the standard protocol for many businesses. Now, even average employees may be on the chopping block as businesses try to reign in expenses in order to weather the economic storm.

In my February article entitled At-will Employment? Right-to-Work? What does it all mean?, I discussed the rights of employers related to terminating an employee. While it is important to understand these rights to be sure that the termination is legally allowed, it is also important to proceed with the termination in a way that reduces risk for your business. Even if the termination is legitimate, defending a lawsuit to prove that legitimacy is time-consuming, expensive and can be very detrimental to your business. It should be avoided, and here are some ways in which to do so:

1) Look for cause. Once you have decided to terminate an employee, it is a good idea to prepare your case before you perform the termination. This is your tactical advantage as an employer, and it is foolish to miss this opportunity. I am not, by any means, suggesting that you manufacture a reason for the discharge. On the contrary, I am advising you to base the termination upon a solid reason, because a termination for cause is always cleaner than a termination without cause.

For instance, one of the first things you should do is inspect the employee’s resume and other employment documentation. If the employee has provided anything that is untrue on any of that documentation, then you have found good cause for termination. If the employee is simply underperforming, then you should begin to issue written warnings so that you have a trail of documentation leading to the termination. Whatever the case may be, you are much better off to have written evidence of misconduct rather than vague examples of minor infractions.

2) Do not provide too much information. Even with good cause, there is no legal requirement that you provide the reason for the termination to the employee at the time of termination. Regardless, many employers feel the need to explain every reason for which they are terminating the employee. I generally see this at either end of the spectrum. If the employee is underperforming severely or acting inappropriately, employers provide a laundry list of reasons for the termination in order to drive the point home or even humiliate the employee. It is intended as retribution for the employee’s prior behavior. If the employee is good at their job, but no longer necessary, then the employer spends time extolling the employee’s virtues before eventually letting the employee know that he or she will no longer have a job with them.

In either of these situations, it is highly unlikely that the employee will feel that the employer was being fair, and unfairness is often met with litigation. If you feel the need to give a reason at all (which may be necessary to avoid unemployment compensation), then stick to the primary reason. No good comes from a laundry list of reasons for the termination. Likewise, telling an employee how much you value him or her before termination generally just sounds like hollow sentiment. It strikes of unfairness if it is too prolonged, and it may push the employee to pursue legal action.

3) Allow the employee to leave with dignity. A termination is usually a highly charged, emotional event for both employer and employee. These emotions often cause an employer to go overboard with criticism when explaining the terms of the discharge to the employee. Worse, the employer may choose to discharge the employee in front of his or her peers or make them do the “walk of shame” out of the place of employment while everyone watches.

While it is tempting to lash out against an employee who has created problems for your business, such behavior invites a lot of anger and resentment, which usually leads to a legal battle. Offering an employee an opportunity to leave quietly with his or her dignity intact costs nothing and may prevent some headaches in the future.

Whether you have a problem employee, you have seen better days financially or you have some other reason to consider termination, consider embracing my tips for avoiding an employment lawsuit. You should also consider consulting an attorney before taking any adverse action against an employee. Your attorney can help you develop a plan of action, and it will cost you far less in legal fees than if the attorney takes over after you have made a mistake.

The preceding is for general informational purposes only and not intended to constitute specific legal advice or form an attorney/client relationship. Please seek the services of a licensed attorney for specific legal advice.

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