Termination Procedures

General Considerations

Once the decision to terminate an employee has been made, the final step is the actual termination procedure. Just as careful evaluation of the circumstances leading to the decision to terminate can minimize your legal exposure to a lawsuit, so too can a carefully executed termination procedure.

Perhaps the most important point for employer's to keep in mind is the need to treat the employee fairly. The most common mistakes made in the termination process include:

• Providing a reason for termination that turns out to be false or not easily proven to be true;
• Terminating for poor performance or misconduct when other employees were not terminated for the same or similar performance or misconduct;
• Terminating for a trivial reason or one unrelated to the goals of the business;
• Violating office termination or discipline policies; and
• Terminating in violation of state or federal law (e.g. anti-discrimination and anti-retaliation laws).

Therefore, to reduce the risk of a wrongful termination lawsuit, employers should be certain that:

1. the decision to terminate does not violate office policies, past practice with other employees, or state or federal law;
2. the decision is supported by proper documentation to corroborate the grounds for termination;
3. the employee is provided with a properly prepared notice of termination;
4. alternatives to termination have been considered; and
5. the employee participates in an exit interview.

Legitimate Business Reason

At the heart of defending most claims arising out of a termination is the employer's ability to both state and prove a "legitimate business reason" for the termination. Generally, it works this way: the employee feels he or she was terminated for an illegal reason and they bring a lawsuit. The burden then shifts to the employer to state and prove a legitimate business reason for the termination. If the employer meets that burden the burden shifts to the employee to prove that the legitimate business reason was a - pretext - to the firing and not the true reason. That's often hard to prove if the reason was truly legitimate and proven.

An example makes the point clear. Your 31-year-old pregnant employee that was in charge of insurance billing and being paid $55,000/year is terminated because you've decided to eliminate the job position. She sues claiming pregnancy discrimination - that she was terminated because she was pregnant. The employer responds that the job position was eliminated. The employer shows that nobody was hired to replace the employee, the office dropped its primary insurance payer recently and so there are 30% fewer claims, no ads were run, and all the employee's job responsibilities were assigned to other employees with no adverse impact on the office. The employee must somehow show that the real reason was the pregnancy -- but she's going to have a very hard time finding any admissible evidence of that -- unless you CREATED some. For instance, you wrote an email to the office manager saying, "Can you believe it, Judy is pregnant. That's going to be such a problem. Ugh." That would be a dumb email to have written! It gives some evidence that you were concerned about her being pregnant and maybe that IS why you fired her. 

So this brings us to the final part of the process: looking for "bad" evidence. 

Termination Checklist

When terminating an employee, especially a "high risk" employee, use the checklist below to review the decision and document the analysis. Use one checklist per employee, and put the results into the employee's file. This record will aid you greatly in defending a claim in the event that should become necessary. (Note: if you prepare this checklist with your attorney in anticipation of a claim, do not put it into the employee file. Instead, keep it separate and do not share it with those that do not need to know its contents. In this way the checklist will be protected from being "discovered" by the employee as it will be protected by the attorney-client privilege.)

For each of the points in the checklist, first check the item to be sure you have read and considered it. Then, in the space below each question, write your notes about the question. These notes will aid you more than you can imagine if you are sued and asked about these very items years later.

TERMINATION CHECKLIST

___ 1. Is the reason for the termination clear?

___ 2. Are all those that participated in the decision in agreement with the grounds for termination?

___ 3. Is there credible documentation and testimonial evidence to support the decision?

___ 4. Is the termination consistent with the treatment of others in similar circumstances?

___ 5. Has the office's termination policy been followed (see employee handbook)?

___ 6. Are there any office policies that may protect the employee against being terminated from being discharged for the reasons contemplated?

___ 7. Is there a progressive discipline policy, and, if so, has it been followed?

___ 8. If progressive discipline was not followed, is there a basis for immediate termination?

___ 9. Is there documentation to demonstrate compliance with progressive discipline?

___ 10. Does the termination violate any state or federal laws that may prohibit termination here?

___ 11. Did criticism of the employee start only after the employee raised concerns of discrimination or other unlawful conditions at work?

___ 12. Is the reason for termination consistent with problems that have been discussed with the employee in the past?

___ 13. Will written performance evaluations or discipline actions support the termination decision?

___ 14. Is the decision to terminate consistent with recent treatment of the employee (e.g. asserting poor performance but recently gave a pay raise)?

___ 15. Have the employee's explanation of events leading up to the termination been considered, and, if so, is there credible evidence for rejecting the explanation?

___ 16. Is the employment relationship likely to be found to be "at will" or could an implied contract not to terminate without cause be inferred?

___ 17. Have any oral promises or representations been made to employees suggesting employment for a specified period of time (e.g. as long as their work is good, etc.)?

___ 18. How long has the employee worked for the office?

___ 19. Is there good cause for the termination?

___ 20. Have alternatives to termination been considered and documented?

___ 21. Has the employee been given the right to appeal the decision or to have the facts upon which the decision relies be investigated?