Preparing for Battle: How to Avoid Termination Land Mines
Termination meetings are one of the most challenging aspects of the employment relationship. Adequate preparation is the key to reducing your organization’s exposure to potential claims. The following checklists will help you plan for termination meetings.
Preparing for a Termination
As you prepare to terminate an employee, check these steps off your list:
- Collect all documents that pertain to the employment relationship (e.g., personnel records, including attendance records, performance reviews, and disciplinary records).
- Review the paperwork supporting the termination decision, and determine if credible documentation or evidence supporting the reason for termination exits.
- Interview relevant supervisor(s), and conduct an independent verification of the facts (if possible).
- If the supervisor failed to follow progressive discipline or document performance deficiencies, ask her to draft a memorandum to HR explaining the reasons for the employee’s termination (and copy legal counsel).
- Determine whether the termination decision complies with company policy.
- Conduct a disparate treatment analysis (i.e., make sure similarly situated employees who engaged in the same conduct were treated the same way).
- Delay the termination to allow for additional warnings, counseling, or opportunity for improvement if warranted based on the review of supporting documentation.
- Review the terms of the employee’s offer letter and employment agreement (if one exists) to determine the requirements for terminating him (e.g., prior notice or severance pay).
- Review the employee’s file for any post-termination contractual obligations (e.g., a confidentiality or non-compete agreement).
- Assess the litigation risk with legal counsel, and review any pending or potential claims.
- Prepare a general release if appropriate.
- Prepare a “script” of what you are going to say and how you will respond to questions.
- Decide whether to offer notice of termination or wages in lieu of notice.
- Calculate the employee’s final wages, and prepare a final paycheck.
- Assess your obligation to pay the employee for any unused paid time off (PTO), vacation, or sick time.
- Determine whether the employee is owed other money (e.g., unreimbursed business expenses, earned bonuses, stocks, or other securities).
- Review the governing plan documents with regard to the termination of employee benefits.
- Address any employee debts or outstanding loans.
- If the employee had health insurance, coordinate the preparation of a COBRA notice.
- Prepare internal termination paperwork in accordance with company policy.
- Decide the employee’s eligibility for reemployment in the future.
- Consult with a public relations or crisis management firm if necessary.
- Determine the appropriate procedure to facilitate the return of company property. Make a list of company property that needs to be collected from the employee (e.g., cell phone or other portable communication devices, building card key or fob, car, parking pass, computer, laptop, portable electronic devices, employee handbook, keys, uniforms, credit card, ID badge).
- Evaluate whether there is company information on the employee’s home/personal computer or on the cloud. Check whether consent has been granted to access the cloud.
- Collect boxes/tape/bubble wrap/paper for the employee to pack up his personal items.
- Alert your IT and security departments about the employee’s termination date/timing.
- Select a witness to be present during the termination meeting.
- Prepare an announcement of the employee’s departure and decide the appropriate dissemination to coworkers, customers, and vendors.
- Plan the transition of the employee’s job duties.
Just Before the Termination
Just before the termination meeting, make sure you have done the following:
- Ask your IT director to terminate the employee’s computer access (both at work and remotely).
- Remove or change all of the employee’s passwords before or during the termination meeting (e.g., computer system, online banking, and other remote-access services).
- Advise building security that the employee is no longer authorized to access the property. (Do not tell security the reasons for the separation unless the circumstances lead you to believe such communication is reasonably necessary to protect other employees or your property.)
- Consider whether any locks need to be changed, and change the entry code on keypad locks.
- Determine whether the employee needs to resign as an officer, a director, or some other management position.
- Remove the employee from the company’s website.
- Transfer, cancel, or review the employee’s e-mail and voicemail accounts.
- Prepare to notify the employee’s contacts (e.g., customers, suppliers).
- Contact the bank and other financial institutions, as necessary, to notify them of any changes in signatory authority. Cancel the employee’s credit card account authorization and request the balance and billing statement immediately.
- Change company passwords for online banking and other remote-access financial services.
- Review the employee’s timesheets (if he is nonexempt)
- Carefully choose a private location and time, decide who will inform the employee of his termination, and determine where everyone will sit during the meeting. (Company reps should sit closest to the exit door for security purposes.)
At the Termination Meeting
Cover the following bases during the termination meeting:
- Meet with the employee in a private location.
- Inform the employee that the door is closed for privacy, but he is free to leave at any time.
- Inform the employee of the termination decision. Don’t engage in a lengthy discussion with him or allow him to debate the company’s decision. The emphasis should be on the future; don’t rehash past discussions. Keep the message concise and clear.
- Refrain from interjecting personal commentary, derogatory remarks, or other extraneous information. Remain professional, and treat the employee with dignity and respect.
- Inform the employee when he will receive his final paycheck and when he should expect to receive a COBRA notice, if applicable.
- If the employee decides to resign, request written confirmation of his decision.
- Discuss the employee’s obligations with regard to the confidentiality of trade secrets (such as customer lists) as well as noncompetition or nonsolicitation agreements if applicable.
- Collect any company property in the employee’s possession.
- If the company decides to offer a general release, present it to the employee.
- Conduct an exit interview if applicable.
- Give the employee his final paycheck if possible. If it isn’t yet available, don’t invite him back to the office to pick it up. Instead, tell him that it will be mailed when it’s ready.
- Verify the employee’s current address (for his COBRA notice and final paycheck).
- Explain the company’s job reference policy (e.g., that you will only confirm his last position, dates of employment, and salary).
- Inform the employee whom he should contact if he has any questions after the meeting.
- Finish the meeting and accompany the employee to his office to gather his personal belongings. If the meeting is contentious or the employee poses a security risk, respectfully escort him to the exit, and inform him that his personal belongings will be boxed and shipped to his home.
- Do not allow the employee access to his computer.
Final Steps After the Termination
After the termination meeting, wrap up the remaining loose ends:
- Prepare a memorandum to the employee’s file summarizing the termination meeting, and send a termination letter if appropriate.
- Inform the person who authorizes entry to the company’s offices that the employee is no longer with the company and should be denied access.
- Remove the employee from the company’s website, social media sites, and staff lists.
- Terminate the employee’s status in the HR information system if applicable.
- Communicate the employee’s departure to the rest of the staff, simply saying, “John Doe is no longer with the company.” If employees question why, respond, “It is not the company’s policy to discuss personnel decisions, and we respect employee privacy.”
- Mail the employee’s final paycheck and COBRA notice if he doesn’t already have them.
- Ensure that the employee has been reimbursed for all additional compensation he is owed (e.g., commissions, expense reports).
- If the employee files a claim for unemployment, analyze whether the company will dispute the claim, consulting with legal counsel if necessary.
- Respond to any reference checks on the employee consistent with company policy.
The way you treat an employee during the termination meeting can affect what happens after the termination, including whether the employee commits an act of workplace violence or decides to challenge the termination, either through administrative action or a lawsuit. Therefore, you are well-advised to follow the golden rule during all termination meetings: Treat others as you wish to be treated.