Winthrop & Weinstine, P.A., attorney Laura A. Pfeiffer
’s article, “The Top 10 Mistakes Employers Make When Terminating Employees,” was published in the May 7, 2009, edition of Finance and Commerce
Laura Pfeiffer is a shareholder at Winthrop & Weinstine, practicing in employment law and commercial litigation. Read below for the full article.
Employers often wonder, “I can terminate an employee for any reason, because they are ‘at-will’, right?” While that may be partially true (you cannot terminate someone for a discriminatory reason), there are often ways you can plan ahead for a smoother termination and improve the subsequent discussions/submissions. Mistakes are often made, but many termination mishaps can be avoided with a little planning and knowledge.
What are the top 10 mistakes?
1. The employer doesn’t examine prior documentation.
It is crucial that an employer review any documentation that relates to the employee, including performance reviews and contracts. While an at-will employee can be terminated for any reason that’s non-discriminatory, it becomes problematic, for example, if an employee is told he is being terminated for poor attention to detail when he has just received high marks in that category on a written performance review. The employer might also discover that the employee has a contract stating that he is entitled to severance pay unless there is a termination for “cause.”
Practice Pointer: Examining documentation before the termination meeting will position the employer to better articulate and possibly adjust the termination reason.
2. The employer doesn’t properly investigate the facts upon which the termination is based.
Even if an employer has credible evidence that an employee has exhibited poor judgment in a particular situation, it’s a mistake to terminate without getting his or her side of the story. The employer is not able to make a determination regarding what really happened, or to assess the employee’s credibility, if the employee isn’t questioned.
Practice Pointer: Get the employee’s side of the story before terminating.
3. The employer doesn’t think through or provide the employee with a coherent, precise explanation why he or she is being terminated.
Employers often get into trouble when they have not given thought to why a person is being terminated, and as a consequence, provide long-winded or easily disputed termination reasons. Also, while an employer doesn’t have to provide the employee with a reason for the termination during a termination meeting, we recommend that employers give one, provided it is thought-out and precise.
Practice Pointer: Make a decision on why the employee is being terminated, keep it short and sweet, and stick to it.
4. The employer provides inconsistent explanations why the employee was terminated.
If the reason for termination keeps shifting, it makes it look like the employer’s reason for the termination is false, or contains a pretext for discrimination.
Practice Pointer: Make sure the termination reason is consistent over time—from the first meeting with the employee to the preparation of any documents submitted for unemployment, and possibly all the way to litigation.
5. The employer mishandles the termination meeting by apologizing or providing too much information.
An employer must plan for the termination meeting. It is not a pleasant task to terminate an employee, and it’s human nature to say “I’m sorry,” or to fill dead space in the conversation.
Practice Pointer: Draft talking points, including the reason for the termination and the related logistics, and stick to it—avoid talking too much or apologizing.
6. The employer mishandles how the communication of the employee’s departure internally and externally.
Employees often bring claims for defamation when internal or external people are told more information than necessary.
Practice Pointer: Less is more. Tell others that the employee has left, and then focus on the logistics of how that employee’s work will be handled. If pressed, the employer should simply state that that it is a confidential employment situation.
7. The employer mismanages the logistics of the termination meeting and the employee’s retrieval of his or her belongings.
Allow the employee a graceful exit to the extent possible or appropriate.
Practice Pointer: Try to terminate someone at the end of the day (and possibly the end of the week), don’t make a scene walking the employee out, and arrange for a time when the employee can retrieve his or her personal belongings in a respectful way (or deliver the belongings to the employee.)
8. The employer is pennywise and pound-foolish in not paying severance pay. In some cases, severance should be paid to reduce risk.
Even if an employer is not required to pay severance, at times it makes sense to pay some amount of severance in exchange for a release in cases where there is risk of a claim.
Practice Pointer: In appropriate cases, discuss with your employment lawyer whether it would make sense to pay severance. If it does, get an up-to-date severance agreement and only pay severance pursuant to the terms of that agreement.
9. The employer mismanages the response to employee’s request for the “truthful reason for termination” or a request for the employee’s personnel file pursuant to the applicable Minnesota statutes.
In Minnesota, if a personnel file is located in the state, the employer must provide it within seven working days after a written request, but what the employer needs to provide as the “personnel record” is defined by Minn. Stat. § 181.960, subd. 4. An employee is also entitled to the truthful reason for his or her termination as long as it’s requested in writing within 15 working days of the termination. The employer must then provide it within 10 working days.
Practice Pointer: Provide the information on time; produce what records you have to (and ask for assistance if there are questions); provide the same termination reason you arrived at previously; and state in the letter that you are providing the reason pursuant to Minn. Stat. 181.933.
10. The employer doesn’t seek assistance prior to terminating employee.
In many cases it might be overkill to seek assistance on a termination because there isn’t much risk, and in many cases the employee is not surprised. There are, however, many cases where a short conversation with an employment lawyer will be more than worth the cost of the call.
Practice Pointer: Use your judgment and call for help on higher-risk terminations.