Generic or Specific Termination Letters: What's in Your Company's Best Interest?

​Karen recently joined a plastics manufacturing company as its director of HR and administration. An employee needed to be terminated, and Karen was asked if it would be better to provide a generic termination letter, provide a detailed termination letter or simply to notify the individual verbally that the company was choosing to move forward with dismissal.

Like so much else in human resources, it depends: Providing accurate and specific termination letters may be in the company's best interests because details of the situation serve to demonstrate that the termination was legitimate, consistent and based on sound business reasons. Further, well-written and substantiated termination letters can dissuade plaintiffs' attorneys from taking on a case. On the other hand, Karen is aware that a poorly constructed termination letter could do enormous damage should the matter proceed to litigation, which is why certain defense lawyers recommend only generic letters with few or no details—and some recommend providing no letter at all.

[SHRM members-only form: Checklist: Termination]

"It's not so much which style is better—it's which style best suits your organization's history and culture, as well as the particular circumstances surrounding the termination decision," said Chris Olmsted, shareholder at Ogletree Deakins in San Diego. "Terminations without explanation can give rise to incorrect assumptions about the company's motives. For example, terminating a witness in a harassment investigation without explanation may give rise to the belief that the company retaliated against the employee, even if the employee had a history of performance problems. A well-written and accurate letter of termination could provide contemporaneous evidence establishing the legitimate basis for termination.

"On the other hand, if the termination letter is poorly written or includes wrong facts or incomplete information, then the company's credibility could suffer in litigation. For example, if the termination letter references a reduction in force but the company then immediately hires a replacement, the offered reason might be seen as pretense."

While it's true that advising an employee of the reason for the termination is considered a best practice and may be required in some states, the employer generally retains the discretion to express the reasons for termination specifically or generically and either verbally or in writing. 

Consider the Company's Investigation and Documentation Style

"Look first to see how well the company conducts its investigations, documents its findings and engages in consistent practices across similar cases," said Travis Griffith, vice president of human resources and administration at Azubu, a global e-sports broadcast network provider in Sherman Oaks, Calif. Inconsistencies in either the documentation itself or the organization's investigational practices in the past could raise doubts around fairness and consistency.

"After all, if you've not documented your investigational efforts consistently over the past few years, if you've investigated some cases but not others or if your termination decision doesn't seem to square with the particular policy that was violated, then limiting the specific facts in your termination letter probably makes most sense." But if you're rock-solid in terms of your investigational efforts, consistent in your findings and have a past practice of providing detailed justifications for terminations, then continuing that practice will likely benefit the company over the long term.

Issues of Performance vs. Conduct

Another key consideration lies in your company's approach to performance versus conduct terminations. It may make more sense to provide details in performance-related terminations, Griffith said, where an employee has failed to meet the terms outlined in progressive disciplinary warnings. For example, if the company issued verbal, written and final written warnings to a worker for substandard job performance that was clearly within the individual's control, then a specific termination letter may be a better choice. In such cases, the specific termination notice should outline the particular policy that was violated, the dates of prior disciplinary events, the progressive levels of corrective action that were taken and the final incident that violated the terms of the final written warning, thereby justifying the termination.

"Providing detailed findings in a termination letter may not always be the best approach when the circumstances involve egregious misconduct that results in what's known as a summary [or immediate] dismissal," Olmsted said. In cases where behaviors like theft, fraud or extreme harassment take place, it's probably better to provide general statements and conclusions. "The letter could end up in anyone's hands or even be posted on the Internet. An overly specific letter may contain sensitive details that, if disclosed to others, may harm the company's reputation."

Although the company's investigation file ought to contain the specific details, you're not obligated to tell the whole story in a termination letter, especially if it's complicated or debatable or if it's possible that certain key facts or sides of the story could be left out. "Just understand that the termination letter will likely be a key focus of the plaintiff attorney's litigation claim, so regardless of whether the letter is general or specific, be sure that its findings are beyond reproach," Olmsted said.

Formatting the Termination Letter

A generic termination letter may simply reference the fact that you've discussed the reason for separation with the individual verbally:

"As you know and as we have discussed, we have determined that you have engaged in inappropriate workplace conduct that violates company policy. As such, we have decided to terminate your employment, effective immediately. Thank you for your service to XYZ Corporation."

On the other hand, if you're planning on providing details that justify the termination, your documentation might look like this:

"This is to inform you that you are being terminated immediately for failure to perform your work at an acceptable level. On Aug. 7, 2016, you received a verbal correction notice for substandard work performance and an unwillingness to perform properly assigned work duties. On Oct. 4, 2016, you received a written warning for substandard work performance and equipment breakage. On Nov. 2, 2016, you received a final written warning for substandard work performance.

"Today you committed a serious error in the handling of company equipment. Namely, you failed to place the Unit X2137 in the rack washer after spraying it down with acid. Because you did not notify your co-workers about this exception to standard operating procedures, a fellow worker handled the acid-covered unit and was subsequently injured. Your failure to properly process equipment demonstrates an ongoing inability to perform at an acceptable level and a lack of focus in your job. We consequently have no choice but to immediately sever this employment relationship, effective immediately."