What to Consider Before Terminating an Employee

Terminating an employee is never easy. Whether the decision is driven by an employee’s performance problems or misconduct, or the company’s economic condition or shifting organizational priorities, no one likes to deliver the termination message. Nevertheless, most employers will need to communicate this message at least once, and usually on multiple occasions, to employees.

To make the termination meeting go as smoothly as possible, be prepared. Even where a worker is employed “at-will,” it is best to spend time carefully reviewing and planning for the termination meeting. By adopting some pre-termination protocols, employers can reduce the risk that employees will believe they were terminated for an unlawful reason and pursue litigation. With that in mind, employers should consider the following:

Before the Termination

• Review any applicable employment agreements or offer letters to confirm whether the employment is at-will or whether some other standards for termination apply.
• Even when the employee is employed “at-will,” it is usually best to terminate for a reason related to performance, conduct or an economic reason. Having a legitimate reason for termination is helpful to avoid litigation and to foster a productive culture. 
• If the employee has reportedly violated a policy, review all applicable employment policies to confirm the policy is clear and that you have adhered to any required procedures.  Likewise, if the termination is performance based, review the job description and any performance evaluations to confirm the employee has received notice of expectations.
• Gather and review documentation about the employee
  including their personnel file and any notes, emails or
  other records. 
• Base your decision on information in the documentation and not on speculation. If you do not have personal knowledge of the information in the documentation, investigate to confirm the documentation and any other information is accurate and provides you with the complete picture, including the employee’s side of the story.
• Confirm the employee received notice of and an opportunity to respond to any allegations of misconduct or poor performance and has received time to improve sub-par performance. Ideally, an employee should not be surprised by a termination meeting.
• Review your organization’s prior disciplinary history to ensure that this employee is treated consistently.
• Assess if the employee is a member of a legally protected category (such as race, color, religion, sex), has engaged in any protected activity (such as recent medical leave or harassment claim) or otherwise presents a risk for litigation (wage claims). 
• Review the termination decision with a third party, such as an employment lawyer or human resources. 
• Plan the termination meeting, including who will attend and what will be communicated.  It is important to communicate a clear message that a decision has been made.
• Prepare the employee’s final paycheck and, if applicable, a check for unused paid time off; confirm any notice obligations pursuant to federal COBRA or the state continuation of medical coverage laws.
• Decide whether to offer severance benefits in exchange for a release and waiver of claims.  Generally, severance benefits are not required, but an employer may elect to offer severance for litigation risk management purposes.

During the Termination Meeting

• If possible, it is best to hold the meeting in person, with two people present in addition to the employee.   
• Communicate the company’s decision in a kind, direct and respectful manner. 
• Confirm when the employee will receive payment for final wages and any benefits continuation information, and invite the employee to call you with any questions.
• Offer a supervised time for the employee to pack personal
  belongings. 
• Collect the employer’s property and disable the employee’s computer access promptly.
• Consider issuing a written termination letter.

After the Termination

• Consider not contesting the employee’s application for unemployment compensation benefits. Former employees who are denied benefits are more likely to pursue other legal options.
• After terminating an employee, be prepared to advise other employees about the change and where to direct questions or work that would have previously been handled by the discharged employee.  Employers need to carefully balance explaining why an employee is no longer a part of the workplace with protecting the former employee’s right to privacy and reputation.
• If you receive a request for a reference for the terminated employee, follow your reference policy, which for most employers means confirmation of dates of employment and position held.

Peg O’Brien is a director at McLane Middleton, a law firm based in Manchester, and vice chair of the firm’s Employment Law Practice Group. She can be reached at Margaret.OBrien@mclane.com.