January 24, 2010

Firing Employees: A Lawyer’s Advice

The world of human resources has officially arrived to mainstream media. In his recent blockbuster movie, George Clooney tackles the death-defying world of human resources and employee terminations. His character racks up tens of thousands of frequent flyer miles travelling to distant lands to be a “hired gun” and terminate employees on behalf of their employers. As the movie suggests, terminating an employee is a very sensitive task. Poorly-handled employee terminations are more likely to breed lawsuits by the former employee, discontent among the remaining employees, and myriad unexpected legal issues. As an employment lawyer, I see the good, the bad, and the absurd when it comes to employee terminations. The stories you are about to read are true (sanitized to protect the innocent) and the lesson drawn from the story worth its weight in saved litigation costs.

What’s the best way to forecast the supply and demand for talent at your organization? Make sure you are using fresh data for accurate results. Request a demo of PayScale Insight to see how having a comprehensive, up-to-date tool can make forecasting more efficient.

Lessons Learned – An Employee Termination Checklist

Learn More About Our Compensation Software

Lesson #1: Expect the unexpected

Susie Secretary was terminated for leaking confidential information to her former boss who left the company to work for a competitor. Sadly for Susie, her former boss made it known to the company that she was over-sharing this information. Susie’s actions were a clear violation of company policy and warranted immediate termination. Per standard protocol, a member of the legal team was present while Susie cleaned out her desk and gathered her belongings. Everything was going as planned until Susie decided to make one last phone call. You see, Susie was having an affair with her former boss. Clearly enraged by her beloved’s breach of trust, Susie called her paramour/former boss in front of the company’s lawyer and threatened to make the affair public unless she got $10,000 by the end of the day. Flustered and shocked, the company lawyer delicately explained to Susie that she could not leverage her termination in order to extort money from her former boss…at least not in front of him.

Susie’s tale of woe simply goes to show that you never know how an employee will react to their termination. Moreover, human resources should be sensitive to the dynamics of the termination and the particular sensitivities the employee may harbor as a result. Thus, it is not necessarily the best idea to have security personnel looming over the employee as they clean out their desk like some sort of social pariah. It may also be advisable to give the employee a moment or two to compose themselves after they have been informed that their employment is about to come to an end.

Lesson #2: Give the employee a chance to tell their side of the story

Heather in Human Resources was 100 percent certain that Cassie the Cashier had been stealing money from the cash register. In her mind, there was no other way to explain how money was consistently siphoned off from this register during Cassie’s shift. Dead-set on termination, Heather called Cassie into her office and handed her walking papers to leave the premises immediately and not return. In the following weeks, however, the money kept disappearing from the cash register despite Cassie’s absence. Many months and many thousands of dollars later, it was determined that Cassie had not committed the theft but that another employee had been utilizing Cassie’s cashier code to support his theft habit.

If Heather had allowed Cassie to tell her side of the story at the outset, Heather would have (1) retained a competent employee and (2) been able to focus on terminating the employee who was actually committing the theft. Perhaps more importantly, employees appreciate the opportunity to present their side of the story and are less likely to turn around and slap their former employer with a lawsuit if the process was perceived as unfair.

Lesson #3: Document, document, document

Debbie always received glowing performance evaluations. She was “a pleasure to work with” and had “great verbal skills.” On the competency scale, her lowest mark was “meets expectations” and she received a pay increase every year until her fifth year of employment when she was fired for “poor performance.” This would be no surprise to her co-workers who could read between the lines of the euphemisms in her evaluations. “Always contributes ideas in meetings” really meant “talks too much” and “performs tasks quickly when asked” actually meant “doesn’t do assignments unless reminded five times.” In an effort to protect Debbie’s feelings, her supervisors had failed to accurately document her shortcomings or put her on a path to correct these professional flaws. As a result, Debbie was shocked and dismayed that her supervisors had “had enough” and saw “no other option but to terminate.” Without proper employee documentation to support their decision, however, the supervisors had unwittingly exposed the company to a lawsuit.

If there is one thing to take away from this blog post it is this: if it’s not documented, it might as well not exist. When it comes to employee performance appraisals and alleged deficiencies in competencies, judges and juries are not going to just take the employer’s word for it. They want to see it in black and white, whether it is in a personnel file or printed from an email. The same judges and juries that hand out thousands and sometimes millions of dollars to former employees in damages want to know that the employee had fair warning of their performance problems and had an opportunity to fix them. Although admittedly burdensome, diligence in memorializing the successes and failings of a wayward employee can give you a solid foundation upon which to justify your employment decision.

Regards,

Merisa Heu-Weller
Davis Wright Tremaine LLP

Related Posts:

Do you have any salary range topics you would like to see covered here on Compensation Today? Write us a comptoday@payscale.com.

Are you doing a salary review or compensation benchmarking project? PayScale provides up-to-date, external salary market data you can use right now. And, it is specific to the education, skills set and experience your employees. Give a PayScale demo a try.