Fairness should guide the firing process

May 14, 2008

Juries who are called upon to hear wrongful termination cases almost uniformly express confusion about the jury instructions they receive on how to apply the discrimination laws to the facts presented in a case. It is not uncommon to hear jurors say that their decision in such a case hinged on whether or not the employee was treated fairly.

Employment lawyers know all too well that termination disputes are some of the most emotionally charged cases on the civil side—second, perhaps, only to domestic relations. Notwithstanding the contentious nature of the firing process, there are a number of things a company can do to try to make the process more fair for the employee, with the ultimate aim of avoiding a costly lawsuit.

The following are some tips designed to make the termination process more fair:

1. Give the employee the option of resigning. How many times have we seen it in television shows and movies where a fired employee walks up to the boss and says, “You can’t fire me, because I quit!” While terminations are often a tense and contentious process, employers have little to gain by using the process to exact revenge against an employee. In fact, in most circumstances, it is in the employer’s financial interest to give the departing employee the option of resigning as opposed to being fired. By so doing, the resigned employee may lose eligibility to make a claim for unemployment benefits, thereby keeping the employer’s unemployment tax rates low. Of course, an employee who is terminated for willful misconduct would not be eligible for such benefits regardless. Even absent any im-mediate financial savings for the company, giving the employee the option to resign as opposed to being fired will often engender sufficient goodwill to deter a wrongful termination lawsuit.

2. Offer a small severance payment in exchange for an employee release. An employee who is being fired is usually most in need of money, which is precisely what motivates most wrongful termination lawsuits. Offering the departing employee some severance pay, when done properly, can be a win-win situation. Many employers have severance policies in place whereby a departing employee is paid a certain amount of money – usually determined by length of service at the company. Such severance pay is not mandated by any federal or state law, but rather is completely voluntary and discretionary on the part of the employer. Therefore, employers are well within their rights to ask terminated employees to sign a waiver of all claims against the company in exchange for the severance pay. Far too often, however, employers fail to secure such a general release from a fired employee, and remain susceptible to a wrongful termination lawsuit even after paying out the severance money. Also, the severance should be paid in installments equal to at least the employee’s average weekly wage, thereby likely rendering the employee ineligible to claim unemployment benefits during the period which he/she is receiving severance payments. Reducing a departing employee’s unemployment benefits will result in a lower unemployment tax rate for the employer, which can add up to a considerable savings over time depending on the size of the company.

3. Carry out the termination when co-workers are not present. There is disagreement among employment law practitioners about when is the best time to inform an employee that he is being fired. Some say it should be done at the beginning of the work day, under the notion that it would be mean-spirited to make the employee work the whole day and then fire him. Others advise their business clients to take such action at the end of the work day, when there are fewer people around. Given the notion that the termination process should be designed to minimize embarrassment and humiliation for the affected employer, employers should avoid carrying out the termination when other co-workers are looking on. Thus, the end of the work day, when other workers are leaving, would appear to be the best time to effect the termination.

4. Do not use security to physically escort the employee from the worksite. There is perhaps no more degrading and unnecessary action that some employers take during the termination process than having a security officer physically escort a fired employee from the workplace. Certainly, there are those occasions where the threat of physical harm by a departing employee merits a security presence. And with the prevalence of trade secret theft by departing employees, it is always prudent to keep a watchful eye on the employee as he is packing up his belongings. Yet, in the majority of lay-offs, there is no need for such drastic measures as using a security officer. To do otherwise only serves to create ill-will and an incentive for the employee to sue the company out of a motive to somehow clear his good name.

5. Conduct exit interviews. Many employees who have brought wrongful termination lawsuits complain that they never had an outlet within the company to voice their complaints, and therefore felt that the only way to get the company’s attention was through a lawsuit. While it is important for employers to establish policies for handling employee grievances as they arise during the employment relationship, exit interviews provide a departing employee with an additional outlet to vent any complaints, and hopefully also praise, about their employment experience with the company. Exit interviews can also be a useful resource for the employer if a fired employee later sues for wrongful termination. For instance, notice to the employer of unlawful treatment is a major element of establishing its liability under federal discrimination laws. An employee who fails to make any mention of such maltreatment in an exit interview will have a tough time explaining such an omission to a jury. In that regard, exit interviews should be conducted by at least two representatives of the company, and contemporaneous notes should be taken of the matters discussed.

Declan C. Leonard practices employment law with Albo & Oblon LLP in Arlington.

Written by Declan C. Leonard  |  Filed Under Employment 

Comments

Got something to say?