Dos and Donts of Terminating Employees

Practical Tips and Pointers

When considering the termination of an at-will employee, keep the following rules in mind:

• DO NOT IMPLEMENT A PROGRESSIVE DISCIPLINE POLICY. Such a policy, might be expressed in an employee handbook, specifying certain stages of discipline, up to and including termination. For example, it may begin by an informal interview, followed by a verbal warning, followed by a written warning, followed by a final warning, and then culminating in the actual termination. This protracted procedure operates as a straitjacket–it prevents the expeditious termination of an employee, especially as to serious violations.

For example, assume one of your employees seriously violates company policy and you have a strong desire to terminate right away. You may now have to wait for months, until you go through all the stages. And if the employee complies after the initial warning, you may not be able to terminate him or her at all. This is because you cannot “skip ahead” through the stages of discipline and go right into termination.

Since this is a condition of employment, the courts will hold you to those procedures and if not followed, there will be wrongful termination. There may even be an argument by the employee’s attorney that such a procedure requires implied just cause.

On the other hand, without these procedures, you have complete flexibility. You can act informally on a case-by-case basis. You may decide to give a warning before termination–but this is totally in your discretion and you are not hampered by strict procedural steps.

Note in some cases, including union contracts and public employees, there may be a requirement of such progressive discipline.

• DO NOT TERMINATE IF AN EMPLOYEE IF HE OR SHE HAS JUST MADE A LEGAL COMPLAINT AGAINST THE COMPANY. For example, if any of the following has occurred recently: a workers’ compensation claim; time off for disability; pregnancy leave; exercising leave under the FMLA; whistleblowing; claim of sexual harassment; claim of retaliation; any acts of discrimination; request for accommodation under the ADA; or the similar exercise of legitimate or statutory employee rights. But does that mean you can never terminate the person if this occurs? No, this is not the case.

Prudent employers wait for the “taint to be dissipated” (a period of time after the claim is made). This means waiting a reasonable time after the assertion of these claims; followed by having another bona fide reason for the termination.

For example, assume your employee has just made a claim with workers’ compensation. But his performance has been substandard and you want to terminate. Let the employee make the workers’ comp claim and start the process for compensation. Then do an internal write-up in the personnel file for nonperformance and decide to terminate. Wrongful discharge only applies if the motivating factor is retaliation for the exercise of statutory rights. If you have allowed that exercise and there are other reasons, you have a much better chance in court or arbitration. Remember, just because an employee exercises their rights, does not mean you can never terminate him or her.

• DO STATE THE REASONS FOR FIRING IN THE TERMINATION NOTICE. There is a difference of opinion among HR attorneys as to whether an at-will employee’s termination notice should be silent as to the reasons or if they should be specified. At http://www.HRconsulting.network, we believe the better rule is to specify those reasons. Just because those reasons are specified, does not mean you have implemented a just cause termination procedure. In the notice, you will be clear the employee is at-will and with or without notice, with or without cause, there can be termination. You simply state the real reason, to ameliorate any suspicion in the mind of the employee.

This will become important if the employee later claims retaliation. Now the real reason is known.

For example, assume a female employee claims sexual harassment. The claim is thoroughly investigated, including receiving written statements by co-employees having personal knowledge. It turns out  there is no substance to the allegation. If the termination notice simply states it is based on at-will employment, the employee will assume there is no legitimate reason for the termination other than retaliation for bringing the sexual harassment claim. But if that same termination letter lists other grounds for termination, including violation of company policy, absenteeism, disruptive behavior, etc., then the real reason for the termination will be made clear.

For example, you might want to use the following language:

“Please be advised that effectively immediately this date, you are terminated from any duties, responsibilities or positions with Company. It is no longer in the best interests of the Company to continue the employment relationship.

This Notice is given to you in the capacity of an at-will employee.  As such, this allows the Company to end the relationship without notice or reason given. While there is no requirement with at-will employment to give a reason for our decision, we think it is important for you to understand why we have reached this conclusion. Note however, that by giving the reason, we are not instituting a requirement of just cause.

Company has received information and complaints from multiple sources that you have been involved in . . . .”

• DO NOT TERMINATE WITHOUT SOME INVESTIGATION. As is commonly known, employees are increasingly making claims for wrongful discharge even for the flimsiness of reasons. The best defense is to pinpoint a reason or reasons that are legitimate. Remember even a minor reason, if in good faith, is sufficient. There is no need to have a good or just cause reason for termination of an at-will employee.

Accordingly, conduct some investigation of the facts, including talking with witnesses with direct information and supervisors. However, do not randomly talk to co-workers who were not directly involved, as what they have to say is typically hearsay. Then document the file. This file will be Exhibit 1 in any defense to the wrongful discharge.

For example, assume the termination is based upon three occasions of tardiness without notifying the employee’s supervisor. It may seem insignificant, but that is a good faith reason having nothing to do with wrongful termination.

Is also common to place the employee on a leave of absence while you investigate violation of company policy.

• DO NOT MAKE VERBAL PROMISES OF CONTINUED EMPLOYMENT. One of the reasons courts find wrongful discharge, is the doctrine of implied-in-fact contracts. This applies to the conduct and verbal statements made by managers or supervisors to the employee over time. It gives the impression in the mind of the employee they can keep their job unless there is some serious misconduct or just cause.

Examples are making statements that the employee will always have a job as long as: they perform properly and are loyal to the company; as long as a particular project is ongoing; as long as they have good performance reviews; as long as the company is profitable; our employees are treated like family; we want our employees to be a long-term, or similar representations.

On the other hand, just because an employee has received good performance reviews, been promoted, has longevity and has had salary increases, does not prevent the implementation of the at-will employment doctrine.

• DO PUT THE AT-WILL NATURE OF EMPLOYMENT IN YOUR VARIOUS DOCUMENTATION. It is common to have a statement of at-will employment in the employee handbook. But also consider placing it in job applications, performance reviews, personnel writeups, and other important documents. And make sure the employee signs acknowledgment of receiving those documents.

 

• MAKE EMPLOYEES SEPARATELY SIGN ARBITRATION AGREEMENTS. Almost all employers wish to have employee disputes resolved through binding arbitration. Don’t just put this in your employee handbook; have it as a separate standalone document which is signed by the employee upon initial hire.

 

• MAKE SURE YOUR AT-WILL EMPLOYMENT STATEMENTS ARE CLEAR AND UNAMBIGUOUS. When you make statements in documents there is at-will employment with your company, make sure it is absolutely clear–no hedging. For example, statements that you can terminate “at any time”, or “on 30-days’ notice”, or “at our discretion”, or “termination without prior notice”, or “your employment is for no definite period of time”, are not clear enough. Use the following statement: “Your employment with us is at-will, meaning  there is no definite period of employment and at any time, with or without notice, with or without reason, you may be terminated.”

 

An example of the language to be put in your employee handbook would be:

 “We sincerely hope your employment here will be a positive and rewarding experience. However, we cannot make any guarantees about your continued employment at our Company. Your employment here is at-will. This means you are free to quit at any time, for any reason, just as we are free to terminate your employment at any time, for any reason¾with or without notice, with or without cause. Nothing in this Handbook shall change the right to terminate the at-will employment.

Nothing in any manual, handbook, email, policy statement, document or work rule of our company limits our right to change the terms and conditions of employment. Also, we have the right to enact or change any company policy, either verbally or in writing, even if it is not contained in this Handbook.

No employee or Company representative has the authority to change the at-will employment relationship, agree to different terms of employment or has authority to enter into an agreement for employment for any specified period of time. Only the President of the Company may change the at-will employment relationship; and if so, only under a written contract signed by the President and the employee. Nothing in this Handbook constitutes a contract of employment or promise of continued employment.”

 DO KEEP TERMINATIONS PRIVATE. Termination should be strictly private between management and the terminated employee. The termination decision as well as any grounds thereof, should not be broadcast or published to co-workers. And if you are terminating the employee face-to-face, it should be private.

 HRconsulting.network had a case once in which the manager, at a group of business meeting, singled out and exposed three employees for alleged misconduct and terminated same. There were literally 300 people witnessing same. Never a good idea.

 

• DO NOT TERMINATE WHILE AN EMPLOYEE IS ON SCHEDULED LEAVE OF ABSENCE OR VACATION. If an employee is on vacation, using PTO or sick leave, FMLA or disability leave, it is not a good idea to terminate during that period. The employee is exercising this leave as a term and condition of employment and has every right to exercise it without interference. Termination should occur only after the leave is completed.

 

 Good Luck.

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