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Letting Them Go: Terminating Employees Carries a Set of Legal Implications

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As you probably are aware, many employment-related lawsuits arise from the termination process. For example, an employee can sue you because he believes he has been terminated unfairly or decide to proceed with a claim he may have been harboring because of how he perceives to have been treated. Because of these possibilities, it is critical that you pay careful attention to the termination process.

In this article, we briefly will explore the three basic ingredients of every termination: the reason for the termination, how the termination decision is communicated and the aftermath. We also will offer advice for keeping each step in the process legal. When it comes to terminations, you must consider not only the technicalities of what may or may not be legal but also how the termination will be perceived by the employee and others. If the termination is circumstantially unfair or perceived to be unfair, it may spawn a costly claim or lawsuit. This lawsuit may end up being costly, even if of dubious legal merit.

Keep in mind there are additional considerations beyond those explored in this article if you employ a union work force. For example, collective-bargaining agreements typically impose a ''just cause'' standard for termination that is inconsistent with at-will employment. In this case, employees may have certain representational rights during investigatory meetings that might lead to discipline or termination. Other special rights may apply as well. If you have a union shop, consult your legal counsel for further guidance before proceeding with a termination.



The reason

The most important consideration when terminating an employee is the reason for doing so. You must be sure the reason for termination is legal and the termination is justified and fair under the circumstances. Although there are a myriad of bases on which an employee can claim a termination decision to be unlawful or unfair, there are but a few basic considerations that should precede every termination decision. These basic considerations follow.

Fundamental fairness

Before making a termination decision, ensure that the decision seems fair. This requires ensuring that you have all the facts pertinent to the employee and the situation prompting the termination and conduct an appropriate and impartial investigation of the facts, making sure the employee has had an opportunity to tell his side of the story.

This also requires ensuring the employee has had some notice or way of knowing his conduct would lead to termination (whether by prior warning, published rules, training, common sense or similar method), as well as any extenuating circumstances (such as length of service, history of good performance, etc.). In short, question whether a reasonable person would agree termination is the appropriate disciplinary action for the offense. If the circumstances seem fishy, think twice.

Contractual concerns

You also should consider whether the employee was covered by a contract. Such a contract can be an individual employment agreement, performance improvement agreement, handbook or policy guide, collective-bargaining agreement, or anything else that might dictate the terms on which the employee can be terminated or what progressive discipline (if any) must precede a termination. If there are contract terms, make sure those terms were or are being satisfied or were appropriately disclaimed or rendered ineffective before proceeding with the termination.

Discrimination issues

You also should determine whether the employee has protected characteristics under applicable federal, state or local laws. Protected characteristics include age, race, national origin, religion, gender, pregnancy status, sexual orientation, disability, and veteran status.

If the employee is a member of a protected class, you must consider whether employees outside the protected class have been or would be treated the same way under similar circumstances. If employees outside of the protected class have been treated more favorably or there are other reasons to believe the termination decision is motivated in part by the employee's protected characteristics, you should not proceed with the termination absent legitimate, objective, articulable reasons for treating the employee differently.

Even if you are comfortable that the termination decision is not disadvantaging one employee over another because of protected characteristics, also consider whether the decision's effect will cause such a disadvantage. In other words, even if the rules are being applied equally to all employees, are the rules -- the reasons for termination -- set up to disadvantage one group of individuals?

For example, requiring that employees be able to lift certain materials and equipment often negatively affects women and individuals with certain disabilities. Is a requirement being imposed that is not necessary to perform the essential functions of a job but serves to exclude or result in the termination of a disproportionate number of women and minorities? If such a rule or policy is enacted, be sure it can be supported as being fully and objectively required for proper job performance.

Potential retaliation

When seeking to terminate an employee, you should consider whether, to your knowledge, the employee has complained in the past about any unlawful conduct or harassment by you or any of your employees, agents or associates or any shady business practices. If so, review the termination reason with extra care to ensure it is in no way tainted or influenced by the
complaint.

Accommodation issues

You also should consider whether the employee recently has sought a leave of absence (as a result of a medical condition, a reason covered by the Family Medical Leave Act, a possible disability, association with an individual with a disability, etc.) and/or whether the individual recently has disclosed information that may lead to the conclusion the individual is disabled or requires a related accommodation to continue to perform his job. Such information provided close in time to a termination decision may provide an employee with circumstantial evidence that his termination was motivated in whole or part by his request for leave for a real or perceived disability. If this is the case, make sure the termination decision is objective and separate from such recent requests or disclosures.

Independent review

Whenever possible, all termination decisions should be reviewed by a human-resources professional or supervisor unrelated to the situation underlying the termination decision. This objective review will aid in ensuring the decision is appropriate and legal.

Notably, the mere fact that any of these considerations raise cause for concern does not mean a termination should not proceed. It means you simply should take care in proceeding with the termination. Be sure those circumstances are outweighed by legitimate considerations to the contrary.

Communication

The second most important concern is how the termination decision is communicated. How this communication occurs can greatly affect the employee's reaction to the termination and the likelihood of him bringing a claim or filing suit. The goal is to minimize the effect of the decision on the employee and end the relationship on the best terms possible. You should treat the employee with dignity and respect no matter the reason for the termination or emotion involved. By minimizing the employee's anger and feelings of being unfairly treated, your chances of being forced to defend a legal claim decrease.

The first step is to think about the termination meeting. Pay attention to its planning and logistics by considering the following:
  1. Who should attend? Generally, a termination meeting should include the employee's direct supervisor and an additional witness (a human-resources representative or higher-level manager). However, consider whether any such individuals would cause friction or be counterproductive. If so, select another individual to deliver or witness the message.

  2. When should it be held? Select a time when few others are around -- early in the morning, during lunch or at the end of the day often are good times for a termination. Consider who the employee will want to see and who will set him off, and try to seek out or avoid times when those individuals are around. And if the employee is potentially violent, consider the safety of the communicators and anyone else who may be nearby, taking the precaution of lining up additional security or other assistance as appropriate.

  3. What day should it be?Consider holding the termination meeting on a weekday other than Friday. This allows the employee the opportunity for positive action the next day -- seeking out unemployment, beginning a job search, networking, etc. -- rather than sending him home for a weekend of dwelling on the termination with no viable options for taking action (given that many resources and agencies are closed during the weekend).

  4. Where should it be held? Select a location near an exit (or, for an office employee, near the employee's workstation or in his office if he will be asked to collect his belongings before leaving). It is best not to have the employee pass multiple co-workers or customers on his way out the door. Respect the fact the employee may be emotional or embarrassed, and guard against the possibility the employee may make a scene.

  5. How will the employee collect his belongings? If there are security concerns, pack the employee's belongings for him. If not, provide options, letting the employee choose whether to collect his belongings now, return during the weekend or after hours, or have the items shipped.

  6. How will access be terminated? Be sure the employee's electronic and physical access to the workplace is turned off while the termination meeting proceeds. For an employee who routinely is sent to a remote work site, think about how best to terminate access to the work site, whether it is an individual's home or commercial establishment. This may require timely communication with those with whom the employee worked to ensure they know the employee no longer is authorized to be on-site, or it may require serving as a guard yourself.
Review and address any other potential issues relevant and unique to the particular individual being terminated. Address each issue or concern before proceeding with the termination meeting.
The next step is to plan the right words and tone. It generally is advisable to use a detailed outline or notes when communicating a termination decision. This can give you focus should the meeting become emotional or the employee disruptive, and, perhaps more importantly, it provides documentary evidence of what was communicated during the communication meeting. During the termination conversation, do the following:
  • Be straightforward, and avoid inflammatory language.

  • Do not ''sugarcoat'' an employee's performance or value or sympathize with the employee's view of his situation. Many times, lawsuits are borne of a manager or supervisor trying to be nice or glossing over the real issues. Be succinct and direct; acknowledge good points, but don't soften the reasons for the termination.

  • State the reasons for the termination. If solid examples of such reasons exist, provide one or two examples, but don't argue about them with the employee; state them as your perspective.

  • Listen to the employee for a brief period, but do not argue with him. Acknowledge he has a different perspective and his perspective has been heard and understood, but reiterate the decision has been made.

  • Tell the employee what, if anything, he is being offered (such as a positive reference, severance, uncontested unemployment, communications to co-workers and business relations, final pay); how to exit the office and collect belongings; and termination of access, etc.

  • Remind the employee of any post-termination obligations, such as restrictive covenants, employment contract provisions, transitional responsibilities, return of property, etc.
Anticipate questions the employee might have, and think about how -- or whether -- to respond. The most effective communication occurs when an employee has an opportunity to air his frustrations and emotions but is assured the decision was made after careful consideration and for solid, objective reasons.

Perhaps the most critical aspect of the communication is the employee's file. Be sure to document the meeting for the file, noting what was said to the employee, what the employee said, any issues discussed and any concerns. Such notes should be made by both representatives in the meeting, signed, dated and maintained in the file.

The aftermath

After a termination occurs, don't blow it with inappropriate post-termination conduct or statements. Remember, former employees can bring discrimination and retaliation claims, as well as contract, tort and many other types of claims, just as current employees do. They also can bring claims for defamation, intentional infliction of emotional distress, tortious interference, etc., just as any other employee can.

To stem such claims, develop specific policies regarding how terminated employees will be handled, addressing items such as post-termination references, post-termination access and communications, subsequent employment and rehire rights, etc. Then, follow those policies with respect to all former employees unless there is a legitimate, nondiscriminatory reason for an exception.

A little planning...

Just like any other project you take on, careful planning and preparation should be an integral part of employment terminations. The precautionary measures you take not only will help reduce the tension associated with this inherently difficult situation but will go a long way toward reducing the potential liabilities associated with employee termination.

About the Authors

Victoria L. Donati is a partner in the employment law group with the Chicago-based law firm Neal, Gerber & Eisenberg. Jason C. Kim is an associate attorney in the same group.
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