Practical Tips for Employers: Being Smart About Terminations

Most employment lawsuits and administrative complaints are triggered by terminations. Hasty termination decisions that are not supported by documentation or analyzed for legal risk are more likely to be challenged in court and result in higher settlements or adverse judgments. The relatively small cost spent on legal fees to ensure a sound decision pales in comparison to the tens of thousands of dollars you will have to spend in the first few months of a lawsuit that could have been avoided.  These are some key points to consider for every termination:

1. Have you collected actual and provable facts regarding the reason for termination?

Collecting the facts is your first step.  This means nailing down facts you can prove.  Relying on rumors or suspicions, not interviewing a key witness, or making emotional snap decisions can get you into hot water.

2.  Have you pulled all relevant documentation?

At a minimum, the employee’s prior discipline and performance reviews should be pulled.  If the employee has a medical condition, all doctor’s reports, leave of absence forms, workers’ comp forms, and the job description should be reviewed.  Also, if the employee has made complaints or sent emails that could possibly constitute “protected activity,” all of those items should be reviewed for legal risk.  Employment agreements and offer letters are also important:  the employee may have “for-cause” protection, meaning your reason for termination must withstand higher scrutiny. There also may be a severance obligation or a notice provision you were not aware of. These items should all be reviewed well in advance of any decision to terminate.

3.  Has the employee been confronted with the issue and given a chance to respond?

This step is critical and it is routinely left out.  In almost every situation, employees should be confronted with the facts against them and given a chance to respond. There are three huge benefits to this:

  • Getting Admissions: While the confrontation can be uncomfortable, many times it actually bolsters your termination decision.  The employee may admit the underlying conduct or at least part of it.  Or make statements that are contradicted by documents, emails, or other testimony, creating grounds for a discharge based on dishonesty.
  • Nailing Down Their Story: You can nail down his or her story, and hear what the employee will likely argue in later litigation.  You will also get the employee’s version of events before a plaintiff’s attorney has the opportunity to influence his or her account and recollection.
  • Creating “Due Process”: The employee may feel less angry about the ultimate decision if the process was fair and impartial.  Providing “due process” in termination decisions greatly decreases the chance the employee will sue you.

4.  Is the reason for termination wholly unrelated to any legally protected class or protected activity?

Everyone knows that an employee’s federally protected classes, like race, sex and age, cannot be considered in a termination decision.  Sexual orientation and gender identity have recently been added to this list by the EEOC.  There are also many other protected traits that can vary from state-to-state, some that may surprise you.  In Colorado, you cannot discharge an employee for “lawful off-duty conduct;” in Wisconsin, having an arrest or conviction record is off-limits.

Protected activity is also a critical area to think about, possibly the most overlooked area by employers.  Protected activity can take many forms.  Did the employee recently ask for or return from FMLA leave, file a workers’ comp claim, or request a reasonable accommodation under the ADA?  If you are terminating an employee because he or she is a “troublemaker,” are you inadvertently relying on activity that cannot be considered, like the employee’s recent complaint about wages, unpaid overtime, suspected illegal activities, or discrimination?  In order to avoid a retaliation claim, these questions should be carefully considered.

5.  Have other employees who have engaged in similar misconduct also been terminated? (or did they receive lesser discipline—if so, why?)

Discrimination claims are proven by comparative evidence.  This means that your terminations must be carried out equally across the board for the same types of offenses.  If you are terminating a female, think about whether male employees have engaged in the same misconduct and were not terminated.  If three employees were involved in falsification, but only the Hispanic employee is being terminated, you must have a solid non-discriminatory explanation why.  A careful review of your past termination decisions, as well as discipline that was not imposed on certain employees, is a must.