How to Fire An Employee
This article is intended to provide general information on how to fire an employee legally. Each time you fire an employee, the situation is unique, and your employment attorney can advise you. On this page are some general steps on how to fire an employee.
Before firing an employee, consult with an attorney to ensure you do not put your company at risk for legal action. Every situation for firing an employee is unique. This article is for general information. We invite you to read our Disclaimer page.
In California, employees are hired “at-will,” so employers can terminate employment at any time without reason. However, employers must follow any rules stipulated in employment contracts. Some contracts will be specific and list the reasons why an employer can terminate, or others simply require there to be a reason for termination.
Exception to “At-Will” Terminations
There are some exceptions to terminating an at-will employee:
If you have told employees they will only be fired for “just cause,” will set guidelines for termination. This will create an implied or verbal contract. If you fire an employee without just cause, then you risk a lawsuit.
Even though you can terminate at-will workers for any reason, the law still protects against discriminatory actions. It is illegal to fire workers for their religion, race, national origin, age, sex, or disability which does not interfere with their performance.
If the reasons for or manner in which you fire someone violates public policy, this is wrongful termination. Even if an employee’s actions harm your company, if their actions are protected by public policy, it is illegal to terminate them.
How to Fire Employees Without Being Sued
Firing an employee is difficult, but a lawsuit will make it even more difficult. By working with an employment attorney to create a standard procedure for all terminations, you will avoid lawsuits.
Terminations can lead to claims based on:
- Wrongful discharge
- Wage and hour liability
Mishandling the termination process or letting your emotions get the better of you can cost your business’s reputation and finances.
Avoiding firing employees is not the answer either, because under-performing employees can disrupt your business. It can reduce morale for your other employees and lose customers. It is difficult to let someone go as you are giving an employee bad news and their family will be affected. However, usually, you have gone through a discipline process, and they have seen it coming.
Having a strict procedure in place for disciplining and terminating an employee will minimize the risk of lawsuits. If one occurs, you will be in a strong legal position with evidence of your legally compliant policy which was followed to the letter.
Prepare to Fire an Employee
The groundwork for terminating an employee should be laid long before you make a termination decision. Firing an employee should be a last resort. There should be warnings, training, and a discipline structure an employee goes through before you decide to terminate them. The best-case scenario is, they clean up their act right away, and your employee goes back to being productive. The worst-case scenario is, you have to fire the employee but have put yourself in a strong legal position.
An employee should never be taken by surprise by a termination. They should have been given plenty of chances to improve their behavior. They will also know that a lack of improvement could mean termination.
Documentary evidence like the following can prove that the employee continued their unacceptable behavior with full knowledge of the end result:
- An employee handbook which details unacceptable behavior
- Employment application
- Discipline policies
- Job descriptions which detail performance expectations
- Performance appraisals
- Discipline records
- Written documentation of any internal investigations which have lead to the termination
These documents must be written clearly without inflammatory statements, and accurate. They may be part of discovery if the employee sues your company.
If you are worried the employee may sue or want to double check your procedure, check with a human resources attorney. The most important thing to remember is to not break any laws.
Review Your Decision to Terminate
Your employee should never be terminated in the heat of the moment. Take time to reflect on your decision and review any evidence and facts.
Employers often neglect to get an independent review of the decision, by a second set of objective eyes if necessary. This could be a member of HR, a direct supervisor, or outside legal counsel.
The independent review ensures:
- The facts justify the firing
- The firing is legal
- The firing decision follows all company procedures and policies
- The decision to terminate follows all other termination decisions and has nothing to do with a protected class.
You need to ensure everything is documented, and there is plenty of written evidence.
Hold a Termination Meeting
Even if termination is justified, it can still be difficult for the employee and the managers involved in the termination and decision. However, the morale and productivity of your whole workplace can be affected by an under-performing or problem employee.
Prepare for a Termination Meeting
Termination meetings must follow a strict procedure to protect your company from legal action, avoid discrimination, and prevent emotional distress to your employees. Before conducting a termination meeting, think of the following issues:
Why hold a meeting?
Firing an employee face to face is the standard. It makes the employee feel like a person and shows that you respect them. If you were to fire an employee via text, over the phone, or by email, it is likely to make the employee angry.
Who should attend?
Two company representatives should be there, the second person should be in management or a higher level than the employee. The employee should not be permitted to bring anyone.
Where will the meeting be held?
The meeting should be conducted in a private location such as a conference room. If there are no private areas, consider conducting the meeting after hours out of respect for the employee. You and the other representative for the company should be seated by the door if the employee becomes hostile.
What to say during the meeting?
You should have a script prepared for every meeting so that all termination meetings are consistent. Keep it factual and do not let your emotions get the better of you. Let the employee know they are terminated in a brief and compassionate manner.
Do I need security measures?
This will depend on how the employee is likely to react. If the employee is likely to become violent or cause problems, then it will be appropriate to have security present. At a bare minimum, disable employees access and passwords to company assets before the meeting. This will prevent them from doing any damage after they are fired. It may also be wise to accompany the employee as they collect their belongings. It might be good to set a precedent of this so you can handle all terminations consistently.
How to handle logistical matters?
Ensure the employee knows how their final paycheck will be delivered, how to return company property, and how their benefits will continue.
Should I offer severance pay?
Severance pay should only be offered in exchange for an employee signing a separation agreement. The separation agreement should mean the employee releases any claims against the company and agrees to sign a non-compete agreement. Only offer severance pay in difficult cases or risky terminations. You do not want employees to expect severance pay.
Follow Up After the Firing
The meeting should be brief, humane, and under control. Accompany the employee back to their office to collect their belongings and out of the building.
The termination meeting must be conducted with respect and dignity. Show sensitivity to the employee but keep things professional. Wish the employee success in future endeavors, and let them know they can call you if they have any questions. After the meeting, write down what was said in case there is a lawsuit.
After the termination, employers need to complete the following tasks:
- Inform other employees about the termination on a need-to-know-basis
- Appropriately handle reference requests in a consistent way
- Dealing with unemployment benefit claims
All these activities should be handled with a great degree of care as these actions can invite lawsuits as much as the termination meeting. Call a staff meeting with those who need to know and tell them briefly about the termination. Do not provide too many specifics, but prevent the rumor mill.