Seyfarth Synopsis: When the decision is to terminate, getting the basics right can go a long way toward preventing claims down the road by departing employees.

Inevitably, at some point, every employment relationship comes to an end. For many people, where they work and what they do is a source of pride and self-worth, as well as livelihood. People generally like to drive their own destinies. This includes deciding when and for whom they will work. Therefore, when it is the company, rather than the worker, who decides to terminate employment, shock, dismay and injured feelings may result.

In 2015, the California Department of Fair Employment & Housing received over 16,000 complaints of employment discrimination. (See DFEH 2015 Annual Report, released in June 2016.) Most alleged disability discrimination or retaliation. Although the DFEH does not analyze the complaints based on job action (i.e., termination, demotion, or some other negative employment event), it is safe to assume that most of the employment claims filed with the DFEH are based on lost employment.

This post offers some suggestions for how to try to minimize risks when the employer has made the decision to call it quits with a worker. We assume for purposes of this discussion that there is no employment agreement or collective bargaining agreement that promises discharges only for cause or that specifies what steps an employer must follow to implement a termination. Even without those contractual restrictions on the employer’s ability to terminate employment, it will behoove the employer to act in a manner that others will see as fair and just.

Accordingly, even if the employer had made no promises at all about continued employment, its tactical goal should always be to conduct a fair and just termination, every time. Striving for this ideal should result in consistency in approach that, in turn, should result in equal treatment of employees. This approach is important to an employer charged with illegal discrimination or retaliation, because juries often equate what they perceive to be unfair treatment with illegal treatment.

What is the road to fairness and justice, you ask? Because the reasons for letting someone go can be as varied as the individuals, there is no one answer. But, the following tips may help smooth the way:

  • Appreciate the context and be consistent in process. Is the decision performance or “cause” related, or is it a company-wide reduction in force? A position elimination? The employee is just not working out? The more the termination is based on performance issues, the more important it is to document that the employee was (1) placed on notice of the issues and the employer’s expectations, and (2) depending on the circumstances, given sufficient time to improve. If an investigation into performance is called for, even in response to a concern that surfaces just before termination, it should be thorough. People who engaged in similar conduct should be treated similarly. To the extent feasible, everyone should be subject to the same process. “On the spot” firings are usually best avoided.
  • Respect the employee. Whoever conducts the termination conversation should show respect for the employee’s feelings, confidentiality, and rights. Conversations should be conducted in private, usually at a time when other employees will not necessarily be alerted to the fact. A respectful tone and manner can go a long way toward helping an employee feel better about the termination decision.
  • Get the basics right. Countless termination-related claims are based on the employer failing to observe the technicalities of timing or the amount of final pay. Use the correct forms. Pay all wages and accrued but unused vacation or PTO when due, with no unauthorized deductions. Give the employee the required brochures and documents (e.g., Notice of Separation, EDD pamphlet about unemployment benefits, COBRA notice, information about pension or other benefits).
  • Special cases. A separating employee may be on leave when the decision to terminate is made or is implemented. The employee may have already made a claim when termination occurs. If so, it will be important to have evidence that the decision was made prior to the claim being received, or that the decision would have been the same even if the employee had not been on leave or had not complained. Sometimes, for a variety of reasons (including if the separation is part of a reduction in force), the employer will decide to pay severance in exchange for a release. In each of these situations, the employer may be well-served by an internal or external legal consultation, before implementing the termination.

In summary, employers who wish to avoid life in the fast lane and want to try to minimize risk resulting from terminations should try to ensure that their employees are treated fairly in the beginning, middle, and end of their journey together. Approaching the termination decision and communications with this approach in mind can help smooth the road to the parting of the ways, and ultimately prevent meritorious claims.