Rare is the employer who doesn’t have to let one of its employees go. Every so often, issues about an employee’s performance, the “fit” between employee and employer, or other business circumstances make it necessary for an employer to terminate an employee’s employment. But, just because firing is common doesn’t make it easy. Emotions run high, mistakes come easily, and either saying or doing the wrong thing can quickly result in a costly legal dispute.
Common sense and deliberation will go a long way toward minimizing the risk of such disputes. Here is a list of some do’s and don’ts for employers when they have to separate employment:
Sleep on it (but not too long). Decisions and words made in haste are easy to second-guess later, and you would rather not have a jury doing the guessing. Most people depend a lot on their jobs for their sense of dignity and self-worth. If you fire an employee out of anger, you will inflame an emotionally charged situation, making it more likely that the employee will feel wronged and want to get back at you. Without thoughtful and objective analysis, you may overlook laws or facts that could give the employee a legitimate reason to pursue a claim. Although some situations may demand immediate suspension of an employee, an employer usually will benefit by taking the time to deliberate before firing.
The employer should sleep on the decision to terminate, but not for too long. Suppose an incident occurs which justifies termination. Then, suppose there is a lengthy delay before the employer suspends or terminates employment. Because of the delay, it may look to others as though the employer terminated the employee for something other than the incident cited by the employer. The employee may contend that the termination is for some illegitimate reason. A jury will not be impressed with the employer’s case if it appears the employee was fired for a reason other than what the employer says.
Be aware of appearances. Consider how a case would look to a jury, lawyer or government investigator. The facts which are precipitating the decision to terminate the employee should be reviewed in context with the surrounding circumstances, including consideration of past and present performance records, any prior warnings, and what others would say if required to testify. Prior documentation of performance problems, corroborated by co-workers or others, will be more persuasive to avert or resolve a dispute than just the say-so of one supervisor.
In general, the legal doctrine of employment at-will in Colorado allows an employer or employee to terminate employment at any time, with or without any cause or reason, and without prior notice. However, lawyers can be creative in arguing that an exception to the doctrine applies. As a practical matter, if a case goes to a jury, the jury will want the employer to show there was a good reason for firing the employee, and the employee was fired for that reason. In court, perception is reality.
Do what you say. The employer should take into account any promises or other communications it has made to the employee in the past about terms of employment or requirements for discharge. Under some circumstances, past promises or assurances by the employer can be enforced by an employee in court, even if the promises or assurances are not contained in a formal written contract.
A written offer of employment, “welcome” letters, employee handbooks, informal policy memoranda, and individual warnings all can be sources of promises and assurances by an employer. An employer who has adopted a step-by-step policy for employee discipline may have intended for it to make employees “tow the line,” but the policy could back-fire. A written procedure for progressive discipline, without a disclaimer that it is non-binding and that employment remains at-will, could be held to limit the employer’s option of firing an employee. If the employer does not do what it has said it would do, it may give the employee the basis for a claim.
Do the right thing. In another vein, every employer should have a policy to comply with anti-discrimination laws. The policy should include a procedure for employees to internally report any alleged violation of such laws. The procedure should be carefully followed by the employer, allowing violations to be reported without retaliation. If investigation by the employer indicates discriminatory conduct, the employer should promptly take corrective action. Woe to an employer who terminates an employee who has complained of sexual harassment or other discriminatory conduct, but has done nothing in response to the complaint.
Don’t get even. If you want to make a bad situation worse, just retaliate against an employee for making a worker’s compensation claim or for reporting an alleged violation of law. The employer might not have had any liability for what the employee originally claimed, but the employer may become liable if it looks like it is retaliating. If an employee has made a claim, but independently does something which warrants termination or discipline, the employer should be extra careful that it can back up the reason for any action it takes. The employer had better get legal advice before taking action.
Don’t be cruel. Even if the firing of an employee is clearly justified, don’t be tempted to make an example of the employee. If an employee is fired in a way that is humiliating, or if the employee is bad-mouthed to others, the employer might give the employee a basis for alleging intentional infliction of emotional distress, invasion of privacy, slander or some other claim. Termination should be handled privately, in a calm and professional manner.
Stick to the facts. Think ahead of time what you will tell the employee, and how you will handle any questions or objections. Get to the point, being brief and factual, avoiding unnecessary slurs and subjective characterizations. Usually, it is best to state the reason for termination, which the employer is prepared to back up if necessary. Listen, but do not engage in a debate. Be considerate, but avoid admitting to any blame, as what you say may be used against you later in court.
Evaluate whether someone other than the immediate supervisor should be present or handle the termination. Generally, it is preferable for the employer to have an extra representative present, someone not a direct supervisor, who can be an objective witness. Both employer representatives should make notes soon after the meeting of what was said and done. If a dispute entails, the notes may have evidentiary value and can be used to refresh memories which otherwise would fade before trial.
Pay without delay. Colorado, like many states, has a statute which requires the employer to immediately pay the employee all wages which have been earned at the time the employee is discharged. Accrued vacation time may be required to be paid. Certain advances and set-offs can be deducted pursuant to a written agreement that was made with the employee, but other set-offs may not be allowed. If an employer fails to make timely payment and the employee makes a written demand, the employer can be held liable to the employee not only for the unpaid wages, but also for a penalty and the employee’s attorney fees and costs.
In some circumstances, the employer may be required to pay commissions or non-discretionary bonuses on a later date, when such compensation becomes fully vested and due. In the absence of a clear agreement between employer and employee showing otherwise, an employee may be deemed entitled to commissions on sales which are pending as of the date of employment separation.
An ounce of prevention. Sound judgment and employment practices can avoid costly legal problems from arising later. Even if a firing and a dispute seem inevitable, steps may be taken to minimize the employer’s risk and expense. The manner, timing and documentation of an employee termination may make a difference. Often, an agreement for settlement and release of claims can be negotiated at the time of separation, on terms which are more reasonable than what would be obtained after the dispute festers. If information or allegations arise at any time which suggest a claim may be brought by an employee, the employer should get legal advice.