Decided It’s Time To Terminate An Employee? Now What? - Top Tips for a Smooth Termination Process

If you’ve decided it’s time to part ways with an employee, how do you execute that decision?  Here are five critical, often overlooked tips to make the termination (and its potential aftermath) go more smoothly.

1. Ensure that All Supporting Documentation Is in Order

Before terminating an employee, it is crucial to make sure you have documentation to support the reasons for the termination, including performance reviews, write-ups and/or supporting emails. Review these documents to ensure that the reason for the termination is valid and defensible.  Often, emails or documents from supervisors or employees who are inexperienced with the law contain emotional, personal or inflammatory statements.  If the employee ends up litigating, this evidence can reflect poorly if the employer wants to rely on it to defend the basis for the termination. To avoid this situation, make sure that the supporting evidence is factual, unbiased and objective. If there’s ever a question about whether to put something in writing, discuss the information first and objectively analyze it before committing it to writing. Once your documentation is in order, ensure that you preserve it because it will be critical to your defense if litigation arises. Preserving documentation often requires turning off any auto-delete functions and suspending destruction policies that might otherwise inadvertently capture this key information. 

2. Plan the Termination Meeting

Where will you hold the termination meeting, and who will attend? Planning the logistics in advance is critical to ensure that the termination meeting goes smoothly.  First, you must ensure that the setting is private and confidential. While this may seem obvious, what do you do if the employee works in a small remote office without a private conference room (or an all-glass room where everyone can watch)? Plan to conduct the meeting at the corporate headquarters or a private off-site location, and plan how you will notify the employee about the location without arousing suspicion. 

Second, an unbiased employee experienced in termination (typically a human resource representative or office manager) should conduct the termination meeting. It is also wise to have an unbiased witness present to document what occurs during the meeting. In advance of the meeting, prepare a script or an outline of what will be said and how you will answer the employee’s questions and practice how the message will be delivered. Treat the employee with dignity and respect and use clear, objective and factually-supported statements. Do not try to bait the employee into an argument or otherwise inflame what is already an emotional discussion. If there is any concern for safety, arrange for a security guard or other security measures to be in place when the meeting occurs and to escort the employee off the premises when the meeting concludes. 

Third, document the termination by preparing an objective memorandum that details the reasons for the termination, and attach the supporting documentation. Do not include personal comments, emotions, speculation or other non-factual information because this memorandum will likely be used as evidence to defend the termination if the employee decides to sue. If in doubt whether to include something or not, pretend that everything in the memorandum will be scrutinized by the employee’s attorney if litigation results down the road. 

3. Provide the Proper Paperwork

The employer must provide the employee with his or her final paycheck during the termination meeting.  The final paycheck must include all earned wages, accrued vacation, personal time off, commissions or bonuses. It is easy to forget things like commissions or bonuses because often, they are paid on a different schedule (i.e., monthly or quarterly) and may not align with the time of the employee’s termination. If the money is earned, however, the employer must pay it on the employee’s last day.  This simple mistake can be extremely costly, as failing to comply carries extensive penalties, interest and resulting attorneys’ fees.  

In addition, make sure to provide the employee with all documentation regarding applicable benefits (including retirement benefits and insurance/COBRA information, if applicable) and unemployment benefits.

4. Immediately Cut-off All Access to Company Property

Collect all company property (including keys, access cards, laptop, company cell phone, parking card, etc.) during the termination meeting, and ensure that the employee no longer has any access to electronic data, including his or her email account (via cell phone and computer), remote login access, and voicemail. Coordinate with your IT department in advance of the meeting to ensure that all electronic access is cut off while the employee is in the termination meeting. If the access is cut off too early, the employee will get suspicious, which could derail your plan. If the employee’s access is not cut off until hours or days after the termination, the employee can gather information and/or create evidence to support any legal claims he or she may try to raise against you.

During the termination meeting, have the employee sign and acknowledge that he or she has returned all company property and information and that he or she has no copies. If the employee signed a confidentiality agreement upon hire, remind the employee of his or her continuing confidentiality obligations post-employment, and have the employee acknowledge that he or she is still bound by those obligations.  

5. Consider a Severance Agreement

Whether to offer a severance agreement involves weighing the associated pros and cons. On one hand, a severance agreement provides certainty and limits potential costly litigation that otherwise may result if the employee believes that he or she was wrongfully terminated. On the other hand, a severance agreement can cause the employee to start thinking about claims he or she may have against the employer and entice the employee to seek legal advice. Indeed, most severance agreements explicitly advise the employee that he or she has the right to consult with counsel. Every termination comes with different considerations, so consult with experienced legal counsel about the risks and benefits of your particular situation. If you do decide to offer a severance agreement, have your counsel draft the severance agreement to ensure that it is current, covers the issues specific to your jurisdiction and the employee at issue, and most importantly, is enforceable.  

Terminating an employee can be stressful and uncomfortable. Following the steps above will help make the process orderly, efficient, and if necessary, more defensible down the road.

Notes

1 This article assumes that there is no employment agreement, collective bargaining agreement or other agreement that prevents an employer from terminating an employee, as long as the termination is not discriminatory, retaliatory or otherwise illegal.

As first appeared on HR.com.

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