The safest way to fire an employee

For Godfather buffs, who can forget the “termination” of employee Sal Tessio (Abe Vidoga) by consigliere Tom Hagen (Robert Duvall) during the organizations “restructuring”? Hagen makes a rather hollow assurance by saying “Sal, it’s not personal, it’s just business.” In these civilized modern times, this methodology would obviously not be considered the safest way to fire an employee. What is the safest way? Please read on.

Any business owner knows how gut-wrenching it is to fire an employee, although real life employee terminations have less severe ramifications than the example above. Sometimes it involves letting an employee go that has made significant contributions to the success of the organization in the past, making the separation even more difficult. Thoughts such as “was there more that I could have done to keep the employee on track?” or “shouldn’t I give them one more chance?” enters into the thought process. Guilt can set in. Normally though, once a business owner has considered firing an employee, it is a fete de complete, and simply needs to be carried out in order to get it over with. The company will be better off, and so will the terminated employee, which they will not realize until later. Life goes on.

How about risk exposure? HR professional Karen Alary (karen.alary@gmail.com) provides the following points for consideration when pondering an employee termination:

• Confirm there is a valid and non-discriminatory business reason for the firing.

• Review company policies (such as at-will, progressive discipline, and dispute resolution) and make sure they are being followed.

• If a written employment contract exists, does it create barriers for terminating?

• Was an oral contract made with the employee that promises continued employment?

• Has the employee filed a workers’ compensation claim or is the employee pregnant?

• Is the contemplated termination really an act of retaliation?

Let’s assume that you clear all of those hurdles. Now if you are anything like most small/medium sized businesses, you may have issues with respect to documenting communication to the employee about their undesirable conduct or underperformance issue(s). Karen then has this to say:

• Has communication with the employee been nonexistent or open, ongoing, and documented?

• Have past performance evaluations been glowing, or have serious problems been identified?

• Has a performance improvement plan been instituted and has there been follow-up evaluation of the employee’s progress or lack thereof?

Depending on the facts and circumstances, business owners can incur significant risk in terminating an employee. The employee can and may sue for wrongful termination, even if all the above policies were carried out with 100% compliance. Whether the employee wins in court is not even the greatest concern. The cost of defense as well as the countless hours of disruption to the company will likely be the most expensive part of the transaction. Then what’s the answer?

The termination needs to be considered as part of a non-emotional business decision requiring rational thought and a focus on risk avoidance. How can you make the employee go away as peacefully and inexpensively as possible? Perhaps a separation agreement and severance award makes sense. You may need to give the departing employee severance since failing to do so might give the employee no option other than to litigate. If you go that route, be sure to get the separation agreement drafted by a qualified and experienced employment attorney and signed by the employee before paying severance. Seek the help of an HR professional like Karen and an attorney whenever you feel vulnerable in such a circumstance. They will take out the emotional aspects and remind you that “it’s not personal, it’s just business.”