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Employee Terminations: Good Practices Help Avoid Bad Outcomes

Terminating an employee is difficult but at times necessary.  Terminations are disruptive, costly and often emotionally difficult.  Unfortunately, terminations also produce lawsuits.  Although some employee lawsuits cannot be avoided, these six good practices will reduce the chance of a lawsuit and maximize the probability of success in the event of a lawsuit.

Good Hiring Practices
It all starts with good hiring practices.  Hiring the right person requires thoroughly vetting an applicant's resume, contacting references, conducting and effective interview and, in appropriate situations, conducting a more comprehensive background check.  At-will status should be clearly noted in the employment application, offer letter, and any written employee agreement.  Once hired, new employee orientation should include a careful review of the policies and procedures and clear communication of expectations for job performance and workplace behavior.

Documentation
Nothing is more important than clear and accurate documentation of all aspects of the employment relationship, including performance evaluations, counseling, discipline and termination.  Policies and procedures must be clear, updated and uniformly applied, and receipt acknowledged in writing by the employee.  Performance evaluations must accurately describe positive and negative performance.  Records of counseling, improvement plans and discipline must be accurate and acknowledged by the employee. 

Draft written communications, particularly emails, with care.  Say what you mean in plain language, not code.  One carelessly chosen word or off-the-cuff remark can damage an otherwise solid defense.  A good rule of thumb for all written communications is to ask, "Would I be comfortable with a juror reading this document?"

Do Not Make Hasty Decisions
A termination decision must be thoughtful and deliberate.  Avoid heat-of-the-moment decisions.  Consider suspension while conducting an investigation.  Get all sides of the story.  Look for red flags, such as protected classifications or recent complaints.  Make sure that the reasons for termination are supported by the facts.  Ensure that the "punishment fits the crime," that applicable policies or rules of conduct have been uniformly applied and enforced, and that progressive discipline has been followed, if applicable.  Decision-makers should ask, "How will I explain my decision to a jury?"  If the reason cannot be clearly articulated before taking action, rethink the situation. 

Tell the Truth
We tell our children, "Honesty is the best policy."  This is good legal advice, too.  Unfortunately, employers sometimes avoid confrontation or uncomfortable situations by giving overly generous performance evaluations or understating (even misstating) the reason for termination.  If the reason for termination is poor performance, do not characterize it as a "layoff."  Inconsistent, inaccurate or changing explanations permit an inference that the real reason was unlawful.

Conducting the Termination
Determine what the employee will be told before beginning the termination meeting.  Communicate the decision honestly and succinctly.  Treat the employee with dignity but do not convey regret or apologies.  Conduct the termination privately, preferably at the end of the day, and keep it short and to the point.  Do not engage in argument or debate.  A witness must attend, and detailed notes made immediately.

Unemployment and EEOC Proceedings
Employers frequently contest unemployment compensation claims on principle, sometimes with unintended consequences.  Contesting a claim increases hostility and may cause the employee to consult a lawyer.  Lack of preparation can produce an incomplete or inaccurate record, which may be problematic if further litigation occurs.

The same is true for EEOC and PHRC complaints.  Employers that handle administrative proceedings without consulting knowledgeable employment counsel risk mistakes, which may negatively impact subsequent litigation.  Thoroughly investigate the complaint.  Responses should be comprehensive, clearly articulate the legitimate business reasons for the termination, and be supported with documentation.  Above all, information must be accurate, consistent and carefully reviewed by all involved before it is submitted.  Inaccurate or incomplete statements at this stage can be devastating at trial.

There is no panacea to avoid employee lawsuits.  But following these and other sound practices will help avoid mistakes that invite lawsuits and contribute to bad results.