Business Law: How to Say Goodbye to an Employee

By Nina L. Kaufman, Esq

On the list of "business responsibilities that we enjoy," letting an employee go ranks right down there with doing your taxes and appearing for a deposition. Employers have difficulty terminating employees for several reasons. There's the discomfort that accompanies having to deal face-on with conflict. There's the guilt that comes from "rejection" of the employee, especially if the employee had extenuating circumstances for poor performance. There's the uneasiness that comes from lack of experience in firing employees and the concern about doing it properly to avoid legal landmines. All of it makes small business owners want to reach for the 3 Ts: Tylenol, Tums, and tequila.

Whether you're firing for bad deeds (substance abuse on the job, theft, harassment) or just unfortunate situations (can't do the job, doesn't get along with co-workers, downsizing) you need to have the details in place before you have the "termination conversation." The key to success: document, document, document. Here are 5 steps you can follow to ensure you navigate employee firings successfully.

1. Help the employee avoid termination altogether. After all, the goal should be to solve a problem, not just to escape a difficult situation. Sounds basic, but many small business owners get so wrapped up in the other aspects of their company that they forget to nurture and guide their employees. If you have questions about how best to do that, see last month's article, "How to Ensure Employee Effectiveness." If a problem starts to brew, nip it in the bud quickly. Collaborate with the employee to set out clear goals, performance expectations, and responsibilities. Consider providing training or mentoring so the employee has a reasonable opportunity for success.

2. Monitor milestones. You want to give an employee a chance to perform up to par . . . but set deadlines for achievement. If an employee can't (or won't) make the changes you agreed upon in Step 1, it's time to let him/her go. You have bigger issues — like the productivity of your company and the morale of the rest of your (performing) workforce to consider.

3. Coordinate with HR and legal counsel. Given the twenty-some-odd federal discrimination laws, and the myriad of state laws affecting employees, you'll need and want proof that the firing has a reasonable business justification . . . and that you handled the process in an unbiased manner. This is especially important if you're firing employees in connection with a "reduction in force," or overall downsizing of your company. Employee lawsuits are on the rise with the increased difficulty in finding a job elsewhere at the same pay with the same benefits. For example, it may seem a good idea to get rid of senior staff (because their salaries are highest), but that could run you afoul of age discrimination statutes. Get the tips and feedback you need from professional advisors to put the right procedures in place.

4. Prepare in advance for the "termination conversation." Choose a private place in the office (e.g., a conference room away from prying eyes). Selecting a third party to be present, such as HR staff, legal counsel, or other senior manager who can be entrusted to keep matters confidential. Know what you'll say in advance so that you're not tempted to backpedal or soften the blow because of the awkwardness of the situation. Consider role-playing exercises or rehearsing in advance.

5. Address "what happens next." Employees will have a host of questions concerning issues like final pay, continuation of health coverage, and outplacement. Determine a deadline for the return of company cars, PDAs, cellphones, etc. Once fired, don't let the employee linger; have someone escort the employee to clear out personal effects leave the premises. This also helps prevent the removal of company property (intentionally or otherwise).

Let's face it: having to fire employees stinks. It's one of the "tough love" lessons of small business ownership: awful to go through, but if you handle it successfully, the rewards on the other side — leadership, a culture of respect, accountability and trust — are priceless.

Want more information on the legal landmines that employers will want to avoid?
Visit GreatBusinessLawResources.com/reasonsemployersgetsued.htm to get your free copy of our special report, Top 10 Reasons Employers Get Sued.
 

© 2004-2010 The Legal Edge LLC. Nina L. Kaufman, Esq. is an award-winning business attorney, author, and speaker. Under her Ask The Business Lawyer umbrella, Nina offers easy-to-understand business law resources that protect small businesses and save them money. To learn more, and receive our FREE "LexAppeal" ezine, visit http://www.GreatBusinessLawTips.com  or contact Contact Us. This article is for your general information only. Be sure to consult with an attorney regarding your particular situation to make sure you get the specific advice you need.

Nina Kaufman, Esq. Award Winning Business Lawyer, Author & Speaker