Some employers may be tempted to believe there is nothing left to do after the often emotional or awkward termination process is complete. There are, however, important actions the prudent employer should consider taking to further minimize risk. Following are five steps to consider taking after termination of employment.
Step #1: Finalize and Comply With Release and Severance Agreements
If the Company offered a severance agreement that was accepted verbally by the employee at or shortly after the termination meeting, make sure the written agreement is signed in the near future. Moreover, monitor and ensure that proper payment of any final wages or severance payments are promptly made and performance of any other severance benefits are completed in the near future. Undue delay in payment or performance can result in mistrust, unfavorable publicity, as well as prolonged and unnecessary disputes and legal expenses.
If the employee leaves the termination meeting with a promise to consider whether or not to accept the severance offer, someone (preferably in HR) should be assigned to follow up if no response is received in the near future in order to keep the process moving toward a positive resolution. If and when acceptance is received, the prudent employer promptly executes the approved release agreement and complies with its terms in a manner that is consistent with applicable law. Acting to finalize the agreement and comply with its terms avoids the all-too-common problem of “buyer’s remorse,” which can occur after prolonged delays or unreasonable failure to pay out or perform the promised consideration.
Step #2: Promptly and Effectively Communicate Employee’s Departure
Promptly communicating information regarding the employee’s departure internally, to both co-workers and upper management, helps minimize adverse consequences from gossip and innuendo. The priority is, of course, to maintain a “business as usual” attitude as much as possible. In addition, when necessary, communicating an employee’s departure externally to customers, clients, or vendors will help maintain positive business relations. You do not want your customers or significant business partners to learn that a critical manager, sales representative, or a relationship partner has left your company before they learn it from you.
At or about the same time the termination is made effective, companies should have already:
- Prepared communications with appropriate information to share;
- Decided who should be informed; and
- Agreed on how they will be made aware of the change.
One-on-one meetings with those who are directly affected by the termination should be planned and scheduled as soon as possible. For others (both inside and outside the company) group meetings or a broad e-mail announcement may be more appropriate. Communicating promptly and clearly with others about employee departures allows business to continue as usual with minimal readjustment time.
Step #3: Execute Public Relations Strategy
When necessary or appropriate, such as when a senior executive manager or partner departs, an effective public relations strategy should be implemented to notify the larger business community of the employee’s termination. Depending on the business interests involved, personal communications to critical business and governmental partners may be necessary. In other cases, issuing a press release can be appropriate in many situations. If there is no in-house department or resource for conducting this process, consulting a public relations firm may help the company identify the best strategy, and how to implement it, promptly and effectively.
Step #4: Review Reference Check Policy – And Practice
A prudent employer should already have a policy and practice that ensures responses to employee reference checks comply with applicable laws, as some states or local ordinances have specific requirements. Whenever possible, instruct terminated employees (in any severance agreements or in any other writing provided to the employee at or after termination) to direct all future reference checks to one source – either Human Resources or someone who has been trained on consistently providing an appropriate response. This helps avoid communications being directed to a number of employees, which creates the possibility of conflicting (or worse) reasons being provided for the employee’s departure. Some former employees intentionally contact former employers in an effort to record or otherwise obtain negative (or false) reasons for the termination, which they intend to use in subsequent litigation.
If your company does not have a reference check policy or practice, consider implementing one that directs all such inquiries to one source (or person) tasked to respond to such requests with the minimum information required under applicable law. This often consists of communicating only the job title, dates of employment and, if requested and where permitted, last salary/pay. Providing consistent employee reference checks minimizes risks from subsequent claims of retaliation, discrimination or other claims of alleged wrongdoing.
Step #5: Ensure Compliance
Following the termination of employment, the prudent employer should take action to ensure the terminated employee is in compliance with any non-compete, non-solicitation, or confidentiality provisions over the next six months or other specified restricted period. Any restrictions should have been brought to the employee’s attention at the time of termination and thereafter, in writing. Being proactive in monitoring these constraints can save the company problems (and expenses) in the future by minimizing potential legal actions necessary to force compliance or seek damages for breach. To the extent a termination highlights the risks posed by not having such agreements in place, the prudent employer can take action to implement their use with other employees before harm, tangible or intangible, occurs in the future.
In summary, the termination process can be smooth and non-chaotic with planning and prudent practices. Ensuring compliance with all legal restrictions relating to terminations can minimize legal repercussions for both the employee and the company.