Employers cannot duck and cover — strategies to avoid termination pitfalls

If not done properly, terminating an employee can lead to expensive litigation to defend against claims brought by disgruntled employees. The Boy Scout motto has worked for over 100 years for a reason — being prepared can help avoid meritless claims that cost companies time, energy and money.

1 — Book ’em.

An employee handbook is critical to lay out policies and procedures you expect employees at every level to follow, including circumstances that will lead to termination. Of course, most employees are at-will, meaning they can be terminated at any time for any reason (other than a discriminatory one), but to avoid any questions, you should establish clear, explicit grounds for termination. It is essential that each employee signs an acknowledgement that he/she received, read and understood the handbook within a few days of receiving it.

Tip: If you have no handbook, but want to cover your bases with regard to termination procedures, create a short, one- to two-page description of policies you need to establish immediately, and then get a team together to work on a more comprehensive handbook.

2 — The future is now.

Every employer hopes a new employee will become a valued member of the team, move up the ranks and be loyal to the company until retirement. Of course, those relationships are few and far between. Most employees leave well before retirement age, whether by choice or termination and may have learned proprietary information and/or developed relationships that they then use at a new job with a competitor.

Requiring employees to sign non-disclosure and non-compete agreements can protect your company from not only losing confidential business information to a competitor, but also from losing additional employees to someone who tries to bring a team of people to a new job. A well-crafted agreement can deter this conduct and/or give you a basis to seek damages.

Tip: Every state has different standards with regard to enforcement of non-compete agreements. In some jurisdictions, you can have a non-compete period as long as three years, whereas others will not enforce a term longer than one year.

3 — Write it down.

Make sure even the most seemingly benign conversations with employees about performance, working conditions, or any work-related issues get written down. Whether an email to that employee recording the conversation (good), an e-mail to HR regarding the conversation (better) or a note to the employee’s file (best), put it in a form that can be found, printed and used if necessary. Trying to recreate memories or records when you are preparing to terminate an employee or worse, litigating a wrongful termination suit, is impossible.

Tip: Have a single person who acts as a clearinghouse for all employee complaints, communications and reports, keeping everything in each employee’s file. If you don’t have an HR department or personnel manager, designate someone to take on this critical role.

4 — Use the buddy system.

Never meet with an employee alone. Make sure two people meet with the employee to address concerns about their performance, or complaints lodged by other employees. This is especially important with allegations of sexual harassment, a hostile work environment or discrimination. Having two people witness a conversation with the employee will not only send a message that the issue is important to the company, but will also let that employee know that the concerns are being treated seriously.

Tip: Address all complaints or problems immediately. Do not wait for that employee’s regularly scheduled review. Any issues that come up need to be nipped in the bud, especially if they may give rise to termination.

Final thoughts:

Being prepared for the inevitable loss of an employee will save you any number of problems in the future. Don’t bury your head in the sand and hope for the best. You will find yourself paying unnecessary legal fees and settlements to disgruntled employees. It isn’t hard to get some processes in place to keep things running smoothly and to protect your company and its employees.

Julie R. Bryan is a business litigation attorney with experience representing clients in a variety of matters. She regularly advises clients regarding their intellectual property rights, employer/employee rights, potential liability with regard to claims from competitors or creditors, compliance issues, ethics, governance issues and obligations under a variety of contracts in numerous industries. She can be reached at [email protected].