Risk Management in Employee Terminations: Sometimes the How is as Important as the Why.
What motivates a terminated employee to sue his or her employer is a complex issue. In my experience, the manner in which an employee is “fired” is at least as likely to lead to a lawsuit as the “reason” given for his or her termination. Many lawyers spend all their time on justifying the reasons for why an employee is being let go which are important because they form the basis for the legal defense. However, I believe that not getting sued at all is better for my clients than having a great defense.
I advocate planning both the “How” and the “Why” of an employee termination. Managing the manner of termination reduces the risk of lawsuits and incidents of workplace violence. The following are ten suggestions I have on handling a workplace termination:
- Treat the employee with dignity and respect. Don’t get personal in the termination meeting.
- Avoid humiliation. Don’t make the employee do the walk of shame or leave your business under circumstances that lead others to think he or she stole from you or committed some other serious misconduct. I have several cases where the employee’s major motivation for suing is being lead to an exit escorted by a security guard while carrying a cardboard box containing personal items. Allow the employee to come back later to collect personal affects or clean out an office or locker.
- Select an appropriate time and location. Avoid times and locations that are highly visible to other employees. Many employers select the end of the business day at the end of the work week, but this may be the wrong time for employees who may need access to support services like the EAP.
- Consider giving a reason. When asked in a deposition why an employee sued, the most common answer I hear is that “I was never given a reason for being fired.” There may be legal circumstances for avoiding an explanation, but they are rare. Formulate a reason and articulate it to the employee. Reserve some latitude to supplement the reason, but at least have some explanation. Once given, don’t debate its merits, but listen to the employee’s response. You might hear something that makes you reconsider your decision, like “this all started when I refused to sleep with my supervisor”.
- Plan your communication. Consider scripting what you will say and formulate responses to typical questions, like “Can I resign.” Don’t text message termination or layoff decisions unless there is just no other way to communicate. Consider a follow up letter that gives your reasons and preserves your right to supplement it with additional reasons. Don’t blame the decision on others like the “home office” or “management”.
- Agree on a Reference, if possible. If the employee knows what the company will say in response to a reference request, then he or she can address it in an interview or on an application. If the reference is inconsistent then the employee won’t get a new job and will be more likely to sue the company.
- Offer Assistance like the EAP or Outplacement. Consider resources that may help an employee with emotional problems or assist them in a job search.
- Protect your employees and business assets. Plan the termination to protect your employees from violence in the workplace and your business assets from sabotage or damage, but don’t overreact. Armed guards and lock changing may not be necessary. Retrieving keys, credit cards, passwords and canceling computer access are.
- Communicate with remaining employees. Plan some formal communication with other employees and individuals outside the company. This is difficult and uncomfortable, but necessary.
- Control the rumor mill. Don’t allow gossip to incorrectly communicate any information.
Let’s face it, it’s a bad situation. But it is one that can be made worse through poor communication. Respect and empathy go a long way. Take for example the infamous Cheers episode entitled the Executive’s Executioner in which Norm becomes his employer’s designated terminator because he is so empathetic. Since no YouTube clip is available, the following is the dialog between Norm and his boss:
[Mr. Hecht, Norm's boss, confronts him in Cheers' restroom]
Mr. Hecht: We want you to be our corporate killer.
Norm: The guy who fires people?
Mr. Hecht: That's right. You see, we decided that terminating employees puts too much stress on our executives. We think you'll be perfect.
Norm: Why me?
Mr. Hecht: Because studies have shown that, uh, it's particularly humiliating when you're fired by somebody who's clearly and markedly superior to yourself. And, uh, that just wouldn't be the case with you, Norman. See, uh, you're just an ordinary Joe. As a matter of fact, we, uh, we checked out your homelife. You have absolutely nothing anyone could possibly envy or resent.
Norm: I'm honored, sir. But I, this, this sounds like a horrible job, frankly.
Mr. Hecht: It's a 300% raise and if you don't take it you're fired.
Norm: Sir, I will have you know that I cannot be bought... and I cannot be threatened; but you put the two together and I'm your man.
Mike: What a terrific post! This kind of common sense advice is just what employers need. As someone who represents both management and employees, let me throw in my two cents on a couple of issues.
First, you're abolutely right about avoiding humiliation. I, too, know of situations in which an employee decided to sue because they were escorted off the property "like a criminal." At least that's they way they perceived it. There's almost never a need for that kind of treatment, and in the rare cases when there is, the reasons will be apparent to everyone in the office.
Second, ginned up "performance-based reasons" for termination just fry people. Think about how you'd feel in their situation. You've been working for a company for years, doing the same job in the same way, getting satisfactory or better appraisals and probably performance bonuses, maybe some stock options. And all of a sudden someone calls you in and tells you, in effect, that you're incompetent and no longer have a job. Is there any doubt that many a person's first reaction will be to lash out and defend himself? And how does he defend his honor? By filing with the EEOC or beginning civil litigation. It happens over and over again.
In short, a lot of employment litigation happens not because of overly litigious plaintiffs, but because companies terminate in ways that invite litigation. You hit the nail on the head when you suggest that in trying to create a defense, some employers bring upon themselves litigation that otherwise would not have happened. Those employers may want to rethink how they do things, or perhaps who they take advice from.
Liz and Frank:
Thank you for your comments. Mutual respect is gone from many aspects of our daily lives. I don’t pretend to know the cause, but the effect is obvious in the workplace. Most of the subjects that we blog upon are really manifestations of the absence of respect for others. Discrimination, Violence in the Workplace, Diversity, Sexual Harassment, Office Bullies all have elements of intolerance.