Top Ten Mistakes Employers Make when Terminating Employees

  1. Try not to fire somebody when you’re angry, or in a way that could be seen as disrespectful or embarrassing to the employee being fired.
  2. Take special care when terminating an employee who has recently engaged in any form of protected activity, e.g., taking FMLA or asking for an ADA accommodation, reporting harassment, etc. These employees are not immune from discipline, but in these situations it’s more important than ever to have strong documentation to support the termination decision.
  3. Speaking of documentation, when terminating an employee for performance or conduct problems, be sure to review your documentation before conducting the termination. If the documentation doesn’t indicate the existence of performance or conduct problems, ask yourself (and the employee’s direct supervisor) if it would be unfair to go through with the termination before giving the employee a chance to improve his/her performance or conduct.
  4. Little-known fact: 49 out of 50 U.S. states are “at will” employment states (every state other than Montana). So, unless you employ people in Montana, you can fire an employee for a good reason, a bad reason, or no reason at all (subject to many exceptions). But failing to give the true reason, or any reason, for a decision to terminate an employee (e.g., because you didn’t want to have an awkward conversation with the employee) is not the best course of action. If an employee has reason to doubt the reason you provided (or you didn’t provide any reason), the employee will likely wonder about all the unlawful reasons that could be behind the termination, and will be more likely to bring these concerns to a lawyer or a government agency.
  5. Reductions in Force (“RIFs”) present unique challenges. Make sure that someone who understands the disparate impact theory of unlawful discrimination reviews the demographics of the employees being selected for termination and those selected to remain employed.
  6. Consider presenting a severance agreement with a release of legal claims to employees being terminated in higher-risk situations. But make sure your separation and release agreements are enforceable and not subject to legal challenges by the EEOC. Employers Council can help!
  7. Take advantage of your Employers Council membership by consulting with an employment law expert before making tough or high-risk termination decisions.
  8. Prepare for the termination meeting. If possible, know what you’re going to say, have the employee’s final paycheck ready, be prepared to explain the employee’s COBRA rights and obligations, and discuss options for the employee to retrieve personal belongings and return any company property.
  9. Keep in mind that laws in some state laws, e.g., California, require that employers provide terminated employees with certain information about the termination.
  10. When terminating employees, don’t just think about legal risk. Remember that this is likely one of the worst moments of the terminated employee’s life. Be sympathetic. (A nice bonus about showing sympathy is it will also decrease the chances the employee will look for a way to make a legal claim.) How you handle the termination can also make an impression on remaining employees—it can either breed better morale and loyalty, or the exact opposite.