Seven Steps Toward Low(er) Risk Terminations

July 28, 2005
Frost Brown Todd LLC

Employers often ask how they can discharge employees who are not doing a satisfactory job without ending up in court.  Although there is nothing you can do to guarantee no lawsuit, there are steps you can take to minimize your risk.

First, review your reasons for discharging the employee.  Will the reasons seem sufficient to an outsider who doesn’t understand you or your business?  Will it seem “fair” to an outsider, not just to you?  Have you discharged other employees in similar positions for similar reasons, or is this employee likely to point to other individuals who have allegedly exhibited the same performance deficiencies but have not been discharged?

Second, consider whether you have provided the employee with notice of the problem and a meaningful opportunity to improve.   Although this is not always possible or appropriate depending upon the circumstances, it generally is  a wise practice.  In the event of a lawsuit, it will help defend against claims that your decision was arbitrary or motivated by discrimination.  Moreover, by providing notice of performance deficiencies, you may find that the problem corrects itself—when given notice of the employer’s expectations and how they are falling short, employees may improve their performance or voluntarily resign because they see the handwriting on the wall. 

Third, ask yourself whether you have documentation of the problem and the steps  leading to dismissal.  Documentation is key.  Accurate documentation drafted in neutral, professional terms will help you tell your side of the story and defend against claims of wrongful discharge in the event you are sued.  If you find that you have little or no documentation regarding the performance deficiencies at issue, you may want to hold off on discharging an employee until and unless you have documentation that comes as a part of your normal business process.

Fourth, consider whether this discharge carries “high risk” factors.  Is the employee in a protected category?  Has the employee recently filed a workers’ compensation claim?  Is the employee receiving temporary total disability compensation?  Has the employee made a complaint of discrimination?  Served on jury duty?  Been out on leave?  Is the employee about to vest in a pension plan?  Does the employee have the type of personality likely to challenge the decision?  Such factors may not automatically prohibit discharge; however, they do argue for getting one’s ducks in a row.

Fifth, consider offering the employee severance in exchange for a release of all claims, e.g., a promise not to sue you in exchange for receiving money.  Seek assistance from an employment lawyer to make sure that any release you offer is drafted in keeping with the law and will be enforceable in the event the employee reneges on his promise and later attempts to sue.  A properly drafted release may go a long way in insulating you from potential litigation.  On the other hand, keep in mind that with some employees in some workplaces, offering a release could signal to the employee that you believe you have done something wrong.

Sixth, if you decide to proceed with the discharge, consider when and how you will convey this decision to the employee.   If possible, the decision should be conveyed to the employee during an in-person meeting.  The meeting should be held in a private office or location away from the employee’s co-workers, with another member of management present as a witness.   The basic reasons for the discharge should be conveyed in accurate and concise terms.  It is the time to convey information, not engage in debate.  You should arrange for the departure of the employee and the collection of any personal property in a manner that minimizes embarrassment or humiliation to the employee.   You may offer the employee the option of returning after the close of business to collect any personal property or that you will forward any such property.  Do not talk with anyone about the underlying reasons for the discharge or the termination meeting unless that person needs the information for a business reason. 

Finally, consider consulting with an employment lawyer to make sure you have a handle on all the laws that may apply to your situation.  An ounce of prevention is well worth a pound of cure.


© 2005 by Katherine C. Morgan and David A. Skidmore, Jr.

Katherine Cook Morgan and David A. Skidmore, Jr. are Partners in the Labor and Employment department of Frost Brown Todd LLC’s Cincinnati, Ohio office.  Ms. Morgan can be reached at 513-651-6838 or kmorgan@fbtlaw.com.  Mr. Skidmore can be reached at 513-651-6185 or dskidmore@fbtlaw.com.

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