A Checklist for Terminations
Question: Can you provide us with a termination checklist or cheat sheet? As HR professionals, we often have the difficult duty of handling terminations. Can you give us a list of things we need to do and/or prepare (a) before the employee’s last date of employment, (b) on the employee’s last date of employment and (c) after the last date of employment so that the process takes place smoothly and we reduce litigation risk?
Answer: In preparing for an employee’s termination it is important to ascertain the type of employment relationship, specifically, whether the relationship is at-will, governed by an employment contract, or in the case of a union employee, governed by a collective bargaining agreement. Generally speaking, in the absence of an employment contract or collective bargaining agreement, the employment relationship is construed as employment at-will. In an at-will employment relationship, either party can terminate the relationship, with or without cause, as long as the motives behind the termination are not predicated on discrimination. Some courts have recognized additional exceptions to the employment at-will doctrine. See e.g., Woolley v. Hoffmann-La Roche, Inc., 99 N.J. 284 (1985), modified, 101 N.J. 10 (1985) (holding that an implied promise contained in an employment manual indicating that an employee will only be fired "for cause" was enforceable against the employer); Tameny v. Atl. Richfield Co., 27 Cal.3d 167 (1980) (holding that an employer’s right to terminate an employee at-will can be limited by statute or public policy considerations). As a result, employers should be mindful of potential exceptions to the at-will employment doctrine when handling terminations in order to reduce the risk of litigation.
Considerations Prior to an Employee’s Termination
Employers should be proactive in the termination process and conduct terminations in a fair and thorough manner. Before an employee’s last date of employment, consider whether an employment agreement exists or whether oral promises have been made to the employee. See, e.g., Dicocco v. Capital Area Cmty. Health Plan, 525 N.Y.S.2d 417 (N.Y. 1988) (holding that the presumption of at-will employment can be overcome by establishing an implied employment contract). Prior to an employee’s termination:
* Consider whether the employer can articulate clear, objective, and understandable reasons for the employee’s discharge. Ensure that the personnel who will be conducting the termination meeting are knowledgeable in the employer’s termination procedures so that the meeting is conducted appropriately.
* Additionally, state and federal laws prohibit discrimination in employment decisions and generally, employers should not make decisions on the basis of protected class characteristics such as an employee’s age, sex, religion, minority group or disability. See, e.g., Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e-2 (prohibiting discrimination by covered employers on the basis of race, color, religion, sex, or national origin); Americans with Disabilities Act, 42 U.S.C. § 12101 et seq. (prohibiting discrimination against persons with disabilities in employment).
* Along similar lines, the employer should consider whether the employee recently filed for disability or worker’s compensation benefits, returned from military duty, requested an accommodation under the Americans with Disabilities Act, or returned from leave under the Family Medical Leave Act, 29 USC § 2601 et seq. Answers to these questions will help prepare the employer for any claims of discrimination or wrongful discharge by the employee in the future.
* Prior to termination, employers should review state laws regarding the final wage payment due to the employee because state laws differ on such requirements. See, e.g., Colo. Rev. Stat. § 8-4-109 (requiring final wage payment at place of discharge or at the usual workplace after involuntary termination) and Minn. Stat. § 181.13 (requiring final payment immediately or within 24 hours of demand where termination is involuntary).
It is imperative to gather and organize all documentation and information before meeting with the employee as this will better prepare the employer for any issues or questions that may arise.
During an Employee’s Termination Meeting
As for a checklist during the termination meeting, several steps can be taken to make the process efficient and streamlined:
* It is best practice to make arrangements for a time and place for the meeting in advance.
* Prior to the meeting, develop an outline as to the topics that will be discussed.
* Remain cordial, courteous, and professional and remember that it is best to be brief and to the point.
* Deliver the termination notice to the employee with reason(s) for termination but do not feel the need to provide extensive details.
* Be sure to discuss the effective date of the termination, any severance pay that will be offered to the employee, compensation for vacation and sick time as well as the continuation of health and life insurance benefits, if applicable.
* Emphasize the confidentiality and non-disclosure responsibilities of the employee.
* Additionally, discuss the return of the employer’s property, including credit cards, keys, company identification, computers, electronic devices, etc. and specify to whom the items should be returned and by what date. Remember that the employee may be emotional or distraught so it is best to create a checklist of all of the items that an employee is required to return so that the employee can properly return all company property.
* Ensure that the employee’s access to the computer systems, both locally and remotely, is disabled.
* Arrange for the employee to remove their personal belongings and/or pick up personal items. Also consider whether there is a need to escort the employee from the premises and whether security should remain with the employee when he or she is collecting his or her personal belongings.
* Make arrangements (prior to the meeting) for the cancellation of company credit cards and payment of outstanding expenses.
With respect to post-termination considerations, it is important to have in development a transition plan and to implement the transition plan in a manner that does not draw undue attention to the terminated employee. Keep the messaging with respect to the transition as business-oriented and neutral as possible. You should also follow-up on all open items related to the terminated employee:
* Consider long-term projects or assignments that need to be transferred to other employees and provide the necessary notification to the employees who will be responsible for these assignments.
* In terms of logistics, the employee’s personnel file should be updated as well as the company’s telephone and email directories.
* To ensure a smooth transition of the employer’s business, arrange for all email, mail, and phone calls to be routed to the employee’s supervisor and/or successor.
* Check if there are any additional items owed ( such as commissions, expense reports)
* Mail final pay stub to the terminated employee, if necessary.
* Check to ensure the appropriate COBRA notifications have been sent to the terminated employee.
Termination is an often strenuous and emotional process for all parties. The best an employer can do is to be organized, prepared and knowledgeable about the process, as well as the risks associated with an employee’s termination.
Keisha-Ann G. Gray is senior counsel in the labor & employment law department of Proskauer in New York and co-chair of the department's employment litigation and arbitration practice group. Proskauer Associate Allana M. Grinshteyn assisted with this article.