How to Screw Up an Employment Termination


by Aaron Clark

Clark, Aaron
aclark@mcgrathnorth.com
(402) 341-3070

Employment terminations often occur in the heat of the moment without advance planning or consideration. This is the worst possible time for an employer to make such an important decision. There are many ways an employer can screw up an employment termination. Before showing your employee the door, you should consider the following:

Broken Promises:  If your employee feels they have been lied to or promises have been broken by the company, a cause of action could exist for breach of contract. Employer promises undermine the employer’s right to terminate an employee “at will.” A unilateral contract can be formed if an employer’s promise is definite, communicated to the employee, and accepted by the employee. Promises can be verbal or written.

Contracts may be created by employee handbooks, offer letters, or other written documents that imply to the employee that they have a right to continue their employment for a definite period of time. Progressive discipline policies and written standards of conduct may also create contractual rights. Disclaimers in handbooks (i.e., “this is not a contract” language) are certainly helpful, but the courts and juries will expect an employer to abide by its own written policies and guidelines. An employer should always reserve the right to terminate employees “at will” in the employee handbook.

Failure to Warn or Document:  Documentation is critical for minimizing liability exposure. Employees should be warned in advance of any performance or behavioral issues in the workplace. Employees should not be able to legitimately claim that they were “surprised” by their discipline or termination, unless they engaged in serious misconduct. Juries have a distrust for employers who fire their employees without warning or without written proof to support their story. On the other hand, an employee who has been adequately warned regarding their performance or behavior will have a difficult time establishing wrongful termination.

The Problem with Inconsistency:  Most discrimination lawsuits are based on the employee’s belief that they were treated unfairly or differently because of their sex, race, age, disability or some other protected status when compared to other workers. Prior to terminating an employee for an offense, you need to make sure that no other employees have been treated differently under similar circumstances. If you are not consistent, it is a lot easier for a judge or jury to conclude that a discriminatory motive existed.

Bad Timing for Termination:  The timing of a termination is very critical. It is really not a good idea to fire an employee on the spot. Precipitous terminations are influenced by emotion and an employer may be acting upon incomplete or inaccurate information. Suspending the employee in order to conduct an investigation is a much better alternative.

The employer always needs to consider retaliation claims. A retaliation claim may arise if the employee is disciplined or terminated after complaining about harassment or discrimination, taking medical leave, complaining about workplace issues or after filing a claim against the employer (e.g., workers’ compensation). Liability can be found even if the employee’s underlying complaint or claim is completely without merit.

Walking in the Employee’s Shoes:  It goes without saying that employees should always be treated fairly with respect to discipline and termination decisions. Some common problems occur whenever:

  • The employee is not given a chance to tell his or her side of the story when an investigation is conducted.
  • Firing a long-term employee without coaching or documentation or firing before a holiday or during the holiday season.
  • Hiring a replacement behind the employee’s back, or worse, having the departing employee train his or her replacement.
  • Escorting the employee out the door in a heavy-handed manner during the workday and in front of other employees or not allowing the employee to gather his or her personal belongings.

Bad-Mouthing the Employee:  Finally, although it is often tempting, an employer should always avoid bad-mouthing the employee. You should never discuss with outsiders, especially with coworkers, the reasons for discipline or discharge. Take the high road and refrain from bad-mouthing an employee after they are gone – especially with respect to references. Have a reference policy and stick to it (e.g., position, dates of employment and salary information only).

Defamation can also be an issue. A statement is generally defamatory if it is communicated to someone other than the employee, the statement is false and tends to harm the employee’s reputation or lower his or her status in the community. Employers are not always protected if the statement is truthful. For example, if the statement is made with malicious intent, the truth of the statement may not be a valid defense in some states.

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