It’s a sticky situation: An employee is underperforming and poisoning the well. You’ve exhausted every attempt to help him save his job, but it’s too late. Time to issue a pink slip.
Before you drop the ax, there are several crucial considerations you should carefully think over. If you don’t proceed with the utmost caution, you could land up in court, potentially caught up in a long, expensive and stressful wrongful termination battle.
As a smart, responsible entrepreneur, you should have access to a business attorney, and you’ll want to consult with him or her before terminating anyone’s employment with your company. We spoke with Chas Rampenthal, general counsel for online legal resource solutions site LegalZoom, and came up with the following 10 questions to help guide you through the process of firing an employee:
1. Am I abiding by company policy?
If your company has a policy for dismissing employees, be sure to follow it meticulously, Rampenthal advises. “If you don’t, then you better come up with one and follow it.”
Most separation of employment policies list specific steps to follow throughout the process. They should cover everything from running the decision to fire an employee up the proper chain of command, down to how to settle on a date of separation. Several helpful sample employment termination policies are available for free online from sites like The HR Specialist and The Society For Human Resource Management.
2. Am I being fair?
Rampenthal suggests that you seriously consider who supplied the incriminating information about an employee that led to the decision to fire him or her. “If a supervisor or co-worker supplied the reason for termination, be absolutely certain that it’s good info,” Rampenthal cautions. Also, if someone is “getting fired for being late two times, even if your policy allows it, make sure that others who were late two times were also fired,” he says. “Basically, have a valid reason. If you’re not fair across all employees, it can backfire and lead to legal trouble.”
3. Am I following state and federal employment law?
To be sure you don’t violate state and federal law when terminating someone, Rampenthal advises that you consult with your company’s human resources personnel or employment attorney ahead of the termination, or that you research applicable employment laws yourself, if needed. The U.S. Department of Labor thoroughly details federal rules and regulations regarding termination here. To find your state’s labor laws, you can search here.
As you likely know by now, federal law prohibits discrimination in employment based on certain protected classifications. Among them are race, ethnicity, gender, nationality, religion, age, veteran status, sexual orientation and disability.
If you’re firing someone on medical leave or an employee who recently revealed that she’s pregnant, you might be at an increased risk of being sued, says Rampenthal. You could also be at a higher risk for legal ramifications if you’re firing an employee who recently blew the whistle on a co-worker or a superior, or if you’re dealing with an employee who has made claims of harassment or discrimination.
4. What documentation of the cause of termination is needed?
Rampenthal says there’s technically no paperwork that’s required to let someone go. However, documenting consistent underperformance is key when firing someone for not fulfilling his or her job duties. Keep a thorough written record of warnings you’ve given the employee and of any improvement or probation plans provided. With consistent, written evidence of unsatisfactory performance in hand (or other offenses like absenteeism, misconduct or tardiness) you’ll increase your chances of mounting a winning defense should a suit be filed.
“The more paperwork you have, the better paper trail you have, the more evidence you’re going to have to show that you didn’t fire them for an improper purpose,” says Rampenthal. “A failure to document makes it easier for someone to say, ‘Well, it obviously wasn’t due to my performance. They fired me because I’m over 40 or because I’m an Asian-American or because I’m a female or because I’m a Protestant.’ If an employee can find another reason for termination and that reason is protected, then the lack of a paper trail is going to really look poorly on the employer.”
5. Where and when should I fire the employee?
Whatever you do, don’t fire the employee over the phone. Afford him or her the respect of a face-to-face exit interview.
If you’re concerned for your personal safety when letting someone go, Rampenthal suggests that you have another person – preferably a fellow manager – present during the firing.
In terms of which day is best to let someone go, Rampenthal says he’s heard it all. “Some say always do it on a Friday, never on a Monday,” he says. “Others say never on a Friday, always on a Monday, and don’t do it after Thanksgiving or before the New Year. Truth is, there is no right day and time. It’s going to be uncomfortable no matter when you do it.”
6. What should I say to the employee when I fire him?
“Be prepared to face a range of emotions, from sadness to anger,” Rampenthal says, “No matter what, stick to your plan, your script, and be professional – which isn’t easy when someone cries or slams the table or threatens you with violence.”
Most importantly, remember that everything you say can be held against you in a court of law. Be brief, calmly state that you’re dismissing the employee “for cause,” but don’t go into specifics because they could be misconstrued, he says. Many employers find it best to simply state that the company is “going in a different direction.”
7. What loose ends do I need to tie up?
From providing the terminated employee’s final paycheck to furnishing an explanation of COBRA health benefits, there are quite a few “final ducks” that Rampenthal says employers should prep before breaking the news.
For example, you should pay any unused paid vacation and/or sick leave in the person’s last paycheck. If you plan to grant the employee severance pay, include that in the final payout as well. You’ll also want to arrange for the employee to promptly sign any necessary exit paperwork and return all company property, including laptops, I.D. cards, keys, phones, uniforms, etc. It’s critical to contact your IT department to disable the person’s company email and any other electronic access to company databases and other information systems.
8. Should I break the news to my other employees?
Do yourself and your organization a favor and stop the rumor mill of speculation before it starts. Consider calling a quick meeting to inform your team that you’ve let an employee go. You don’t have to tell them why he or she was fired, only that the individual is no longer with the company.
9. What should I do if I hear from the terminated employee again?
The best course of action is to be cordial and quick to refer the employee to your company’s attorney or human resources representatives. “Most of the time it’s sour grapes and doesn’t amount to much,” Rampenthal says, “but you can’t afford to buy a lawsuit because you failed to follow up on a claim of harassment or discrimination.”
10. What should I do if a potential future employer of the fired employee calls me for a reference check?
The only information you should provide are the dates the employee worked for you and the position he or she held – nothing more in the interest of limiting liability. Any additional information you provide is purely voluntary, “but, remember, it can come back to haunt you if it gets back to your former employee,” Rampenthal warns.