By Kristina Meyer | HRTools.com Business Writer
Terminating an employee is never easy. And if done hastily, it could potentially lead to a tangled up legal nightmare. Before you let one of your employees go, you want to make sure you’ve dotted all your i’s and crossed all your t’s.
“Every termination should be treated as a business decision,” says Bill Greif, partner at TG & Associates and co-author of the book, “No More Rotten Eggs: A Dozen Steps to Grade AA Talent Management.”
“Business owners need to think about the whole process,” says Greif.
A lack of preparation on your part could give a disgruntled employee the ammunition he or she needs to fire back and take you to court. To avoid such legal wrath, do your homework before handing out walking papers. The following list will help you get everything in order so that the process is as painless as possible.
- Consult your company’s policy. Your employee handbook should clearly spell out your company’s termination policy. Greif says that every company should have an employee handbook that definitively states the discipline and harassment policies as well as an explanation of what actions justify termination. Developing clear-cut policies sets the ground rules from day one, so that there are never any misconceptions about what will earn employees a pink slip.
- Identify the cause. According to Greif, in most states employment is at-will, meaning the employer doesn’t have to cite a reason for firing an employee. And by the same token, employees aren’t obligated to give a reason for leaving. However, some experts suggest that, out of courtesy to the employee, you should give a reason for the termination. Most say that if you do address the cause, you need to make it clear that it isn’t up for debate. Keep it short and to the point. Only state the facts. Avoid engaging in a long explanation. This will only give the employee time to find flaws in your argument and attempt to dispute it.
- Collect the proof. If you do state a reason, you need to make sure you can back it up. Greif says this is where businesses can get into a lot of trouble.
“An employee’s file needs to be accurate and complete,” he says. “Many times businesses are ill-prepared because issues are poorly documented.”
Before confronting an employee, it’s in your best interest to pull together any and all documents that describe the person’s performance and behavior, including performance evaluations, written warnings, timesheets and all other correspondence that passed between the company and the employee.
- Draft a waiver for the employee to sign. Each terminated employee should sign a separation agreement. This will describe the terms of the termination. Usually, it describes the employer’s responsibilities to the employee, such as continuing medical benefits and any severance pay. This document could also include a non-compete clause, which prevents employees from seeking employment with competitors for a specific amount of time. You cannot force an employee to sign a separation agreement they don’t agree with. Give the employee a fair amount of time to review the document.
- Create a post-termination plan. Legally, you’re obligated to pay your employee for any work he or she has done up to this point. Greif says it’s a good idea to have the final paycheck in hand when going into the termination meeting. This way you can completely sever ties with the employee following the meeting. You’ll also need to provide a 401(k) distribution and C.O.B.R.A. form to any employees who received benefits. Some experts recommend that, as a courtesy to your employees, you should put together a pamphlet that explains the typical post-termination process and offers contact information for the local unemployment office.
- Make a list of everything the company has provided to the employee. You’ll need to collect keys, ID cards and any other access devices. It’s also wise to collect the employee’s access codes and passwords. Be sure to reset these as soon as possible to ensure that the employee can’t harm any of your company’s property or information.
- Select a witness. Though it’s not mandatory, many experts suggest that you have at least one witness present during the meeting. Greif says that if the termination is going to be a potentially difficult situation, then it’s a good idea to have someone there who can offer an unbiased account of the events. The witness should be someone in the company who has an honest and respectable reputation, preferably a supervisor or human resources manager. This individual should be willing to testify if the employee attempts to sue the company.
- Decide when. There are mixed opinions on when you should terminate an employee. Some say the beginning of the week while others say it should happen at the end. In “No More Rotten Eggs”, Greif writes:
“Personally, we have found Thursday to be a good day to let someone go with sufficient time left in the day for the employee to clear out his or her personal belongings, but late enough so that most of the other employees are gone and some embarrassment can be avoided.”
He also writes that firing the employee on a Thursday gives you Friday to speak with the rest of your workforce and allows everyone to “digest” what happened over the weekend so that they can start fresh on Monday.
- Pick a place to hold a meeting. The location should be neutral and non-threatening. “The most important thing is that you always conduct this session in private,” writes Greif.It can be in the employee’s office or in yours. Just be sure that you don’t hold the meeting where there is bound to be a lot of gawking from other staff. Embarrassing the employee will only aggravate the situation.
- Outline what you’re going to say in the termination meeting. One slip of the tongue can put your business in a very precarious legal battle. Greif says business owners usually get themselves in trouble by saying too much.
“Go through your spiel and nothing more,” Greif says. Experts recommend that you be firm, but courteous of the person’s feelings. And most importantly keep it short.
“Create a mantra, if you will, and do not get hooked into a lot of other conversation,” writes Greif.
For more help on what to say in a termination meeting, check out our article, Ten Things You Shouldn’t Say in a Termination Meeting.
- Call your lawyer. Before you drop the gavel, you should run everything by your business attorney. Greif says this will help to ensure that you’re being fair and that the termination is kosher. Your lawyer will be able to identify any potential legal hiccups, such as discrimination or wrongful termination lawsuits, before you get in too deep.
- Rehearse. After your lawyer gives you the go-ahead, take some time to go over what you’re going to say to your employee. Greif says you need a script. He recommends that you make it a point to run through it multiple times before the meeting. Be comfortable with the speech before you approach the employee. Practice will help you sound decisive and confident about your decision so that the person has little opportunity to make an argument.
According to Greif, most business owners are afraid to fire an employee because they’re worried about how it will reflect on their business. But he also says that many businesses are in “turmoil” because of one person. Unfortunately, termination is a part of business. By using this checklist you can properly prepare so that the process goes smoothly for both parties involved.
Legal Disclaimer
The information contained in this document is for general, informational purposes only and is not intended to be legal advice. This information is not a substitute for the guidance of a professional and should not be relied upon in reference to any specific situation without first seeking the advice of a qualified HR professional and/or legal counsel regarding applicable federal, state or local laws. HRTools, Insperity and their respective employees make no warranties, express or implied, and make no judgments regarding the accuracy of this content and/or its applicability to a specific situation. A reference or link to another website is not an endorsement of that site or service.