Minimizing Liability When Discharging An Employee

Meeting with an employee to notify them of their termination can be fraught with potential legal pitfalls. To reduce risks of legal liability, employers should follow certain guidelines when discharging an employee.

First, employers should maintain confidentiality of sensitive information to the extent possible. Prior to terminating the employee, employers should only discuss their plan to terminate, and the reasons for their plan to terminate, with those who need to know. During and after the termination meeting, employers should avoid discussing the reasons for the termination with other employees, though other employees can be told that the employee has been separated from employment.

Second, prior the termination meeting, the employer should consider all legal requirements with which it must comply, such as whether an employee is due any additional compensation or commissions following their termination, when the employee can expect to receive their final paycheck, and to what extent the employee is entitled to any continuing benefits following termination, including COBRA benefits. The employer should expect questions from the employee about these issues during the termination meeting, and it should be prepared to answer those questions during the meeting. The employer should also have the termination letter ready to hand to the employee during the meeting, which will address many of the employee’s questions. 

The termination meeting itself should take place in a private location, and if the employer has any anticipation at all that the employee may become disruptive or a danger to the workplace, the employer should plan to take the appropriate precautions before the meeting begins by having a security guard present or available if the need arises. The employer should arrange for any necessary parties to be present during the termination – necessary parties might include the employee’s supervisor who can explain the reasons for the employee’s termination and/or a human resources representative who can discuss administrative issues such as final paychecks, continuation of benefits, and return of company property.  

During the meeting, the employee should be clearly told that they are being terminated. If the employer is comfortable that the reasons for termination are well-supported, the employer should also explain why the employee is being terminated so that the employee is not left to speculate about the reasons. The employer should ask the employee to return their keys or access card immediately, and as a best practice, the employee should be escorted to their desk to gather their things (or arrange a time later when the employee can return to gather their things) and then escorted out of the building. If possible, the meeting should be scheduled for the end of the day or at a time when the workplace is less busy to reduce the potential for making a scene or publicly shaming the employee.

The following are some of the most common mistakes made by employers when terminating employees.

Lack of Preparation: Before terminating an employee, the employer should (1) review all of the relevant documentation, including any contracts with the employee and prior disciplinary notices; (2) prepare a termination letter; (3) arrange to have all necessary parties at the termination meeting; and (4) consider all administrative components of the termination, including timing of final paycheck and entitlement to any continued benefits or paid PTO.

Failing to Define the Reason for Termination: The employer must be prepared to discuss the precise reason for the employee’s termination, and it should ensure that this reason is well-supported by documentation, witnesses, or other evidence. The employer should also ensure that the reason for termination is lawful. In advance of the meeting, the employer should script out the reason for termination and share it with any other individuals who will be involved in the meeting.

Engaging in Argument with the Employee: The employer should inform the employee that the termination is not up for discussion and that the employer will not address any questions by the employee about the reason for termination. The employer should not apologize for the termination or provide any additional detail except for its scripted reason for termination. Debating with the employee during the termination meeting is risky for an employer because it may lead the employer to give inconsistent explanations for the termination, or it may offer the employee hope that the employee can stay employed.

Sharing Sensitive Information with Other Employees: Employers should tell other employees only what they need to know, which is usually just that the employee has left, along with any information necessary to transition the work of the employee. Sharing any additional information may subject the employer to a risk of a defamation suit by the departing employee. Likewise, the employer should refrain from providing negative information about the employee to potential employers who call for a reference.

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