How to Fire an Employee: Advice from a Former HR Generalist

It is inevitable. At some point in time, a business will be forced to let someone go. Whether it is for 'just cause', layoffs, or poor performance, handling a termination is a delicate process. In the company that I worked for as an HR Generalist, our HR department took these matters seriously. Not only did we consult with employment attorneys, but we also took many steps in house to ensure that we handled the process in an ethical and professional manner. Here are suggestions that any business can incorporate to ensure that wrongful discharge lawsuits are limited and terminations go smoothly.

Document, Document, Document

This is perhaps one of the most important steps a company can take to protect itself when firing an employee. These documents should include but are not limited to: job applications, performance evaluations, time and salary records, and signed documentation from employees showing that they acknowledge and agree to company policies (typically found in employee handbooks). It is especially important to make sure that all supervisors keep good records detailing an employee's disciplinary or performance issues. Without this evidence, a terminated employee has more power when it comes to suing the company for wrongful discharge. A company should make an effort to keep these records for the law mandated required amount of time. Each state is a little different so an employer must review the requirements for record keeping. However, be aware that a lawsuit can occur a long time after termination. Holding onto documentation for several years post termination is probably the wise thing to do.

Have Employees Sign At-Will Employment Statements

No employer should imply that there is some type of contractual relationship between the employee and company unless it is a specifically written out employment contract. In other words, a company should be careful to not state verbally during an interview or in written company documentation that job security is 'guaranteed'. Pick your words carefully when discussing this topic. This is where the employment at-will statement comes in very handy. At my previous company, we would have all applicants sign an employment at-will statement that declared that their employment with our company was strictly "at will". In other words, employees could choose to quit at anytime, and our company could fire workers at anytime for lawful reasons. Be aware though, that this does not completely give a company the power to arbitrarily fire employees. Companies still need to be careful when terminating an employee and make sure that they are abiding by the law.

Stick to Business during the Termination Interview

Handling a termination interview in a professional businesslike manner is very important. At my previous company for example, the HR Director and manager would sit in with the terminated employee in a private area. They would not allow the interview to last more than 30 minutes and would make sure to stick to the matter at hand and not get too personal. Documentation would also be available to all parties. They would not apologize or express too much sympathy for the employee. It is important to be cordial, but firm in your decision. In the case of a poor performing employee it should not be a big surprise if there were prior discussions and documentation that led up to the termination interview.

Implement Severance Agreements

Last but not least, it is a good idea to consult with attorneys on how to draw up a severance agreement. Basically, severance agreements allow an employer to offer a terminated employee pay or benefits for a certain amount of time post employment with the requirement that the terminated employee give up their right to sue the company. A fired employee does not have to sign the severance agreement, but they do need to acknowledge that they are giving up the 'incentives' that the company is offering. It is important to give employees an adequate amount of time to review the severance agreement by themselves or more thoroughly with an attorney. However, unless an employee believes that they are being fired without cause, most will sign the document to receive the benefits. Severance agreements are not a guarantee against lawsuits, but they are extremely successful if done in the proper way.

Helpful Sources:

Fire At Will-Terminating Your Employees Legally: National Institute of Business Management Special Report

Nolo Law For All

Employee Issues.com