Kleiner Legal - Kleiner Legal News & Tips

I have heard way too many stories lately about easy-to-avoid wrongful termination lawsuits. Whether an employee is let go because she did not meet expectations after being given many opportunities to improve or just because painful cuts were necessary, it needs to be done right. Bringing termination processes in line with best practices will avoid confusion and painful (and expensive) disagreements. Here are some clear guidelines that offer employers the best chance of staying out of trouble and out of court. Not surprisingly, they can be helpful for employees as well.

I will focus in more depth on each of these areas in my next several posts.

In almost all states in the United States, there is a presumption of “at-will” employment. That means that unless there is a contract stating otherwise, either the employer or the employee can terminate an employment relationship at any time, with or without notice, for any lawful reason. Make sure employment at-will status is clear and known. This means it is clearly stated in every offer letter and mentioned and defined in any policies or handbooks.
Make sure policies do not undermine the at-will employment relationship, such as those guaranteeing progressive discipline prior to termination. If there is a progressive discipline policy, make sure it is clear and followed universally. Also make sure exceptions to progressive discipline are clearly stated and are used only in those circumstances.
Make sure disciplinary documents and processes do not undermine the at will status -- a 6-month probationary period or a 3-month performance improvement plan should be accompanied by language specifically re-affirming the at will status, even during designated periods.
Once the decision has been made to terminate someone’s employment, regardless of the reasons, have a clear understanding of what the reasons are and what should be articulated. Make sure no one is off message. If it is performance related, DO NOT pretend it is a layoff. If it is a layoff, be honest about that. Regardless of the reason, stay professional and DO NOT disparage the employee or engage in re-hashing the past or assigning blame.
Be particularly careful when terminating the employment of employees who may have or think they have a claim for wrongful termination. Have they recently reported behavior they believed was illegal? Have they recently cooperated in a government investigation of the workplace? Have they recently exercised their right for family leave? Have they recently complained about harassment, discrimination or wage payment irregularities? If you answer yes to any of the above, seek advice from employment counsel BEFORE moving forward. Regardless of your relationship with the employee, if the employee is in any protected categories (age, religion, race, sexual orientation etc.) take extra time to review the decision carefully and contact employment counsel if you are unsure.
Make sure you provide all of the appropriate post-termination documents. This includes information about COBRA, where applicable, and other benefits, unemployment compensation, etc. Be mindful of final pay requirements, including whether unused vacation is considered wages in your jurisdiction. If you do not know the requirement in your jurisdiction, you can check on findlaw or contact your employment counsel. Make sure to time the effective date of the termination so that you are able to pull together everything you need in time.
Remember, notice before a termination is not a legal requirement. Providing some notice is considered a courtesy, but does not enhance your legal position in any way. Consider using severance as a way to both soften the blow for an employee and manage legal risk. The idea is simple – an employee provides a release of claims in exchange for a lump sum or continuation payment(s). If you are offerring severance, be prepared with severance documents when you provide the termination notice. Make sure you include the appropriate federal and local statutes and language – especially for employees over 40. Contact employment counsel if you are unsure. Do not provide severance payments without a release. Nothing stings more than being generous post-employment and then getting sued!
Respect the dignity of terminated employees. Treat them professionally and, regardless of their reactions, always act to maximize the possibility of having positive future relationships with departed employees. Never share information on the circumstances of a termination with anyone without a business need to know. The sooner a terminated employee moves on professionally and personally, the better for your organization, so help them to get there if you can. Never provide negative references, instead confirm position and dates of employment.

While nothing can guarantee a smooth employment termination process, following best practices can help insulate employers from making needless mistakes. It is worth the time and effort now to avoid the headache later.