When you first hire employees, classify the employee in writing as an “at-will” employee (in the employment application, employee handbook, and offer letter), because this will usually make it much easier if you later have to fire them. Never promise an employee long term job security unless absolutely necessary because you may be legally held to your promise, even if it is oral.
Document, Document, Document all performance problems in writing, because a document in writing and dated at the time it occurred is much more believable to a jury or judge than an oral claim later that you correctly remember a performance problem. A juror will likely wonder why you are now claiming it was important if you didn’t even take the time to write it down and put it in the employee’s personnel file. Document in writing carefully the reasons for termination and give the employee the writing in the termination meeting—this document will be a key document if the employee brings a lawsuit. Make sure that performance evaluations are documented in writing and are carried out by tactful but truthful evaluation, not carried out with “grade inflation” to try and avoid hurting an employee’s feelings—your supervisors must be carefully trained so they will do accurate evaluations. You need accurate written evaluations in order to base discipline and termination decisions on them.
Never terminate an employee immediately or when you are mad. Wait until you cool down, investigate things carefully, and first talk it over with another supervisor or owner. If you feel the employee needs to be immediately removed from the workplace, then suspend the employee while the conduct is investigated. If the employee is “exempt,” remember to suspend with pay to avoid accidentally turning the employee into a “nonexempt” employee. Even if the employee is “nonexempt,” suspension with pay during the investigation will be viewed by a jury more favorably than a suspension without pay when the investigation hasn’t been conducted yet.
Before terminating an employee, carefully review all the company policies regarding termination, and make sure the person(s) taking part in the termination are following them. If you don’t have termination policies, get some good advice about how to create them, and then carefully train any supervisor or manager that may take part in any firing to make the policies are followed.
Carefully investigate the facts behind the reasons that are being used to justify the termination, including interviewing any witnesses to the facts and reviewing all relevant documents. The truth is not always what it appears to be on the surface or what a supervisor believes.
If you have a good human resource person, involve him or her in any firing decision, since this will help weed out potential illegal firings. If you believe the termination might be “tricky” or “difficult,” or you are uncertain about it, call a competent employment attorney and run through the situation before pulling the trigger. This small expense is much better than a later lawsuit that may cost several thousand times the cost of briefly consulting an attorney before the termination. Most employee lawsuits are caused by terminations, so this is the most cost effective time to get advice.
When making the termination decision and when actually informing the employee, it is much better to have at least two people involved. Two minds make better decisions than one mind, two people help avoid the “he said, she said” standoff about what really occurred at the employee termination meeting, and a jury is more likely to believe the employer if two or more people carefully considered the facts and concluded the termination was justified.
Make the termination decision based on job performance criteria, not something unrelated to job performance.
Make consistent termination decisions for similar situations, or you risk running afoul of the discrimination laws. Involving a person that has a long term institutional memory of past terminations help keeps terminations consistent.
Be professional and humane in carrying out terminations, even if the employee gets upset. Even if the employee deserves to be terminated, the employee seldom sees it that way. Because being terminated is very difficult and has a huge impact on the employee, the employee is more likely to sue if the employer is rude, abrupt, indifferent etc. Many lawsuits are filed because of the manner in which an employer carries out the termination. Being terminated is bad enough for the employee, but being rude or demeaning when informing the employee will be perceived by the employee as humiliating and rubbing salt in the wound, creating the desire to “make the employer pay” for how it acted. The most likely situation for an employee to sue an employer is over a termination, so there is no reason to enrage the employee and increase your chances of being sued.
I am an employment lawyer in both employment law counseling and litigation. I have practiced law since 1983. I have also lobbied for many clients before the Utah State Legislature.
View all posts by James W. Stewart