Tips for terminating an employee without inviting litigation.

by Austin Wilkerson

Terminating an employee is never fun, and in today’s employment environment where potential lawsuits lurk around every corner, terminating an employee can be downright terrifying. We’ve compiled some tips to help you prepare to terminate an employee:

1. Does the employee have a contract? If so, review it carefully with legal counsel to be sure the termination is allowed under the contract. For example, some contracts of employment allow for termination only for cause. If that is the case, you must ensure you have cause, as defined by the contract, to terminate the employee.
2. Is termination allowed under state law? All states recognize the at-will doctrine of employment, meaning either the employer or employee may terminate the employment relationship at any time for any reason (other than a discriminatory reason prohibited by other state or federal law). However, 38 states also recognize an implied contract exception to the at-will doctrine. Therefore, employers who make oral or written assurances of continued employment risk creating a contractual relationship where none was intended.
3. Document the termination and everything leading up to it. The termination should not surprise the employee. In most cases, if the employee is being terminated for cause, there should be ample documentation of prior infractions and attempts to resolve issues, including written performance evaluations.
4. Be prepared. Consider what you will say to the employee. Terminations are hard for everyone involved, including the person doing the terminating. Being prepared will help you stay calm.
5. Have a private face-to-face meeting. No public terminations. No reactionary outbursts of “You’re fired!” Terminations are significant decisions with legal ramifications. They should not be made in the heat of the moment.
6. Don’t do it alone. Depending on the size of your organization, someone from human resources or another executive should attend the meeting, along with the person communicating the termination.
7. Explain what will happen next. Let the employee know what comes next and what benefits will be available to the employee after termination, if any. Inform the employee if you are willing to provide a positive reference.
8. Allow the employee to talk and ask questions. Stay calm, and be kind. There is no reason to make the situation more uncomfortable for the employee than it already is. Consider that an employee who leaves on good terms is less likely to file a lawsuit than one who is ushered unceremoniously out the door.

This list is not exhaustive, and it should be used only in conjunction with an overall human resources strategy of employee review and discipline. We recommend you consult with legal counsel to ensure you have the appropriate policies and procedures in place to ensure compliance with the law and best practices.