Termination is never an easy part of a manager’s job. But the steps you take beforehand can reduce the difficulty and the company’s possible exposure to wrongful termination lawsuits.

HR experts agree that firing an employee shouldn’t come out of the blue. Termination should beTermination the final step in a thorough process of establishing company policy, regular performance evaluations, constructive discipline and dispassionate consideration of the employee’s risk and value to the company.

In addition to maintaining updated and accurate documentation and engaging in a well-planned termination protocol, it’s also critical to consider individual risk factors that could lead to wrongful termination suits. According to the Corporate Counsel website:

Amy Jensen, a labor and employment attorney in the San Francisco office of Hinshaw & Culbertson, notes that in recent years good employees have been caught off-guard by economy-related dismissals. They sometimes think they were unfairly selected because, for example, they took time off to care for a relative or because of their gender.

Termination by itself isn’t unlawful, but if an employee perceives that [he or she was] fired unjustly, [he or she] will be more likely to sue. 

Once a decision to terminate has been made, she counsels clients to examine all of the risk factors. Employers should ask, “Has that person taken any sort of leave in the past year? Have they filed a workers comp claim? Have they had a baby? Are they over 40? What is their racial or ethnic or national origin background? Have they recently complained about something?”

How can you reduce the emotional element of termination and reduce the threat of lawsuits? Consider using the following checklist as a guide to making the process constructive for all employees.

Standard Procedure for All Employees

  • Distribute a discipline policy (through handbook or otherwise) at the time of employment and make the rules available online or elsewhere so all employees have notice
  • Consistently follow whatever policies are promulgated and treat employees fairly and consistently

Disciplinary Procedure

  • Inform employee of infraction and maintain records in the supervisor’s file and/or personnel file
  • Provide employee opportunity to improve—treat discipline as a constructive process, not just as punishment
  • Act expeditiously on allegations of harassment or other serious misconduct
  • Perform investigation if appropriate

Determining Penalties

  • Consider an employee’s overall performance, value and risk to the business

Executing the Termination

  • Complete termination report
  • Draft termination letter, with management and assistance of counsel if necessary
  • Inform human resources and payroll
  • Inform administrators of benefit plan(s), i.e. medical and retirement

Employee Meeting

  • Include supervisor, HR representative
  • Discuss severance, if applicable
  • Inform departing employee of COBRA, state-mandated or employer-provided continuing health coverage
  • Establish contact for other outstanding HR issues

Closing Matters

  • Request return of company equipment, data, or other property
  • Comply with state final paycheck timing requirements
  • Conduct exit interview, if appropriate

Additional Resources

Our Forms & Policies section features over 500 sample HR forms, policies and checklists available for downloading, customizing and printing. 

Topics: Human Resources, Reporting and Recordkeeping, Termination

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