Typically, the employee's direct supervisor and an HR representative attend a termination meeting. This approach helps avoid a situation in which it is one person's word against another's as to what occurred during the meeting. Generally, an employee should not be allowed to bring a co-worker, family member, or attorney to the meeting.
Termination Best Practices: A Toolkit to Protect Your Business
Support your workforce and reduce risk with proven strategies for involuntary terminations. Address compliance, communication, and legal risks to safeguard your organization and employees.
Involuntary termination of employment occurs at the end of the employment cycle but also impacts recruiting, retention, employee relations, morale, and productivity.
Effective termination practices are not only good business but also help reduce legal risks that may arise when an employer fires an employee. Depending on the situation, a discharged employee might pursue legal action against the employer, decision-making managers, or co-workers.
In the United States, “employment at will” refers to a relationship where either party can end employment without notice, at any time, for any lawful reason. This doctrine is the default employment rule unless a formal contract exists.
However, state and federal laws, along with court-created exceptions, have restricted when employers can terminate employees without facing challenges. Legal claims from terminations may stem from common law, federal or state statutes, or local ordinances. Keep these factors in mind when planning terminations.
Termination Preparedness
Managing the risks associated with involuntary terminations of employment requires planning that begins before hiring and continues throughout the term of employment. Unanticipated circumstances are inevitable, so the prudent course of action is to control those variables that can be controlled.
Before Hiring
Devoting attention to these considerations during the hiring stage will prove beneficial in the event that a decision to terminate employment is made later.
- Applications: Require applicants to fully disclose their prior work history without gaps in time and to give the reasons for termination of prior employment. Inform candidates that false information on the application, or material omissions of requested information, will be deemed grounds for rejection and, if employed, termination of employment. Either the application or a stand-alone document should authorize the employer to conduct appropriate background investigations and reference checks.
- Interviews: Clearly convey to applicants what the employer's expectations will be, including standards for attendance, performance, workplace conduct, and employee ethics.
- Release agreements: The organization should consider whether to address severance pay in exchange for a release of claims on an ad hoc basis or by means of an established severance plan subject to the Employee Retirement Income Security Act of 1974 (ERISA). As to employers covered by the Age Discrimination in Employment Act of 1967 (ADEA), a release of claims under the ADEA must comply with the detailed requirements set forth in the Older Workers Benefit Protection Act of 1990 (OWBPA).
New Hires
Clarifying mutual expectations for new hires helps foster transparency, minimize misunderstandings, and set the stage for a successful and collaborative working relationship from the outset.
- Policy review: Give each new hire a copy of the organization's employee handbook and any written employment policies and practices, including the organization's employment-at-will policy. The employer should obtain the employee's written acknowledgment of having received and read the handbook and policies.
- Employment agreements: For some positions — particularly for executive, temporary, or seasonal positions — it may be appropriate to enter into written contracts with new hires.
- Proprietary considerations: It may also be appropriate for some positions to have new hires sign agreements that protect intellectual property, prohibit competitive employment for a specific period and geographic area after termination of employment, or prohibit solicitation of co-workers to leave the employer.
Ongoing Considerations
Planning for involuntary terminations continues during employment. Employers should develop and consistently apply uniform performance standards for each position. These standards may be established in job descriptions, management-by-objective agreements, policies and procedure manuals, and performance evaluation forms. Promptly and thoroughly investigate serious misconduct allegations such as harassment, workplace violence, and theft or destruction of organization property, and take appropriate remedial measures if necessary.
Recognizing that an appropriate course of corrective action for disciplinary issues may be different from an appropriate course of corrective action for performance improvement, organizations should consider whether to adopt policies on progressive discipline and corrective action.
Often, employees disagree with the employer about the appropriateness of corrective action. Consequently, you may want to develop an internal dispute resolution program to guarantee that termination decisions are made only after the affected employee has been afforded due process.
SHRM Resources
Pro Tip
Use applications for all positions, not just lower-level positions, because resume fraud is a problem that occurs at all levels.
Deciding to Terminate
If a manager concludes that an employee should be discharged, at least one other person — perhaps someone in the human resource department, the manager's own supervisor or legal counsel — should carefully and independently review the decision before the termination occurs. In such a review, include a careful examination of all facts leading to the manager's desire to terminate the employee and a thorough review of the employee's entire personnel file.
Managers must work in tandem with HR to ensure there is the proper rationale and documentation for dismissal.
A supervisor's recommendation to terminate an employee raises a red flag when:
- The employee has an established record of satisfactory performance.
- The supervisor's recommendation is based on subjective reasons that are not substantiated by written documentation.
- The reason for the recommendation is based solely on “he said/she said” evidence and there is no clear indication of what really occurred.
- Prepare documentation of the termination review process and finalize the ultimate decision before the termination meeting.
Pro Tip
When considering termination, it helps to account for the key issues a plaintiff's attorney would consider when determining whether to bring suit for wrongful termination.
Legal Advice: Involuntary Termination for Both HR and Employees
In this episode of SHRM's All Things Work podcast, employment Attorney James “Jim” Reidy, partner of Sheehan Phinney Bass & Green, shares actionable steps for employees to regain control and protect their rights, and guides HR on legal essentials and best practices.
Notification of the Termination Decision
Notifying an employee that their employment has been terminated is a delicate task, and employers should think through the four W’s (and H) before delivering the news.
Individuals in charge of delivering the news of a termination should always plan out what to say in advance. Essential topics to cover include the following:
- That a decision has been made to terminate employment.
- The reason(s) and key facts supporting the decision.
- The effective date of separation.
- A review of the separation package and benefits.
- A review of the policy and procedures for giving references.
- A review of applicable post-termination restrictions, such as noncompetition or nondisclosure agreements.
- What will happen immediately following the meeting (e.g., cleaning out the employee's workspace, returning organization property, being escorted from the building).
- Other exit activities (e.g., an exit interview questionnaire or outplacement meetings).
- Whom to contact about post-termination issues.
There is no “right” day of the week or time of day for every discharge. A Friday afternoon termination may allow the employee to cool off over the weekend and make it more difficult to immediately contact an attorney, but it may also give the employee an entire weekend to stew with a spouse, friends, or attorney-acquaintances. A midweek termination may permit the employee to take immediate constructive steps, such as seeing a counselor or outplacement advisor, revising a resume, applying for unemployment benefits, or networking to find a new job. Recent data indicate that Tuesdays are the most popular choice for termination meetings, as HR will be available the rest of the week to answer any follow-up questions the terminated employee may have.
Termination at the end of the day may make sense if the employer has reason to believe the employee may be disruptive or threatening. Termination midday may allow the employee time to say goodbye to co-workers and clean out their workspace. A termination first thing in the morning may relieve managers from worrying about the meeting all day long, but it may leave the employee feeling as though the employer wasted his or her time by making the employee come to work unnecessarily.
Termination meetings are best held in a neutral, private setting such as a conference room. Individuals delivering the news should select seats that minimize the risk that an angry or violent employee will be able to block the exit.
Employers should be prepared in advance to do the following:
- Block computer system access.
- Change pass codes.
- Remove the employee's name as a signatory to bank accounts or post office boxes.
- Collect keys, identification badges, and organization property.
- Obtain adequate personal security if the situation becomes hostile.
Pro Tip
The tone of a termination letter should be respectful and direct. Avoid including harsh language, emotional statements, or too much detail.
HR’s Role in Resolving Workplace Retaliation Issues
In this episode of SHRM’s All Things Work podcast, Louis Lessig, partner at Brown and Connery, LLP, shares practical steps for HR, people managers, and employees to address claims. Spot red flags, balance confidentiality with open communication, and navigate resolution strategies.
Post-Termination Interactions
Employers should prepare for a variety of post-termination communication challenges, including inquiries from other employees, government agencies, prospective employers, and the former employees themselves. Discharged employees are justified in expecting to be treated professionally and courteously in post-termination communications concerning their employment, including having telephone calls returned promptly.
Announcements
The employer should prepare a clear, brief, and general explanation about why the employee is no longer with the organization to share internally with those affected by the employee's departure. A general announcement to all employees should indicate who will be handling the former employee's responsibilities for the time being. If the termination is causing disruption or rumors among the remaining employees, you may wish to work with counsel to craft a statement for dissemination.
Exit Interview
Consider whether to use an exit interview or questionnaire to collect the discharged employee's views about areas of concern for the business. Although most organizations do not conduct exit interviews in discharge situations, hearing about employee complaints this way may be better than learning about them later from an employee's attorney or the Equal Employment Opportunity Commission. Additionally, a discharged employee may speak more candidly about very real problems with the organization than any employee on staff ever would.
References and Employee Records
Reference inquiries about the discharged employee from prospective employers should be handled in accordance with the organization's reference policy and procedures.
Consider whether a former employee has the right to obtain a copy of their personnel file, if requested, under company policy or as required by state law. Some employers permit this even when not legally mandated to do so. This is because refusing to provide a copy of or access to the personnel file may provoke the terminated employee into calling an attorney and may later appear to a jury to have been an unnecessary and hostile act on the part of the employer.
Limited-reference policies can assist employers in reducing liability, but managers and co-workers can undermine their effectiveness when they bypass them to assist colleagues in securing new roles.
Retain employment records relating to former employees as required by applicable laws. When records are no longer needed to satisfy legal retention requirements or business needs, destroy them to prevent misuse of the sensitive information they contain, some of which could be used to perpetrate identity theft. Be careful to thoroughly destroy electronically stored information as well as paper records.
SHRM Resources
Pro Tip
Avoid negative comments or gossip about the individual, as this can damage your company's reputation and potentially lead to legal issues.
SHRM Workplace Investigations Specialty Credential
Develop the skills to conduct fair and effective workplace investigations with the SHRM Workplace Investigations Specialty Credential.
Templates and Tools
Having the right tools and templates helps handle the termination and offboarding process professionally, legally, and with empathy. Here is a curated selection of resources to support you in managing the complexities of employee termination while maintaining compliance and professionalism.
Have a termination question? Use your member benefit.
FORM
Letter of Termination — Without Cause
Use this template to guide your company in delivering consistent, transparent messages during employee separations.
FORM
Termination Letter Template
Access a comprehensive termination notice to help your company ensure compliance and clarity during the employee separation process.
POLICY
Involuntary Termination of Employment
Equip your HR team with a clear policy that promotes transparency, legal compliance, and respectful offboarding for all employees.
Q&A
Advising an Employee of the Reason for the Termination
Get clarity on whether companies are required to give a reason for dismissal. Review key legal considerations and HR guidance for managing employee exits.
FORM
Reference Release Authorization — Post Employment
Streamline your post-employment reference process with this practical template designed for HR leaders and executives.
FORM
Return of Company Property Letter
Facilitate efficient asset recovery with this document, crafted for HR professionals seeking to enhance offboarding and protect company resources.
Legal Issues
HR must abide by several laws to protect the organization as it considers or conducts termination of an employee. Train managers to remain consistent in their verbal and written communications. Review employee handbooks yearly to verify they do not unintentionally create implied contracts. Always stick to the facts during offboarding conversations.
Common-Law Claims to Watch Out For
While the at-will doctrine applies in most U.S. states (except Montana), giving employers the right to terminate employment at any time, courts recognize several exceptions. Discharged employees may file claims based on:
- Contractual obligations: Breaching written agreements, employee handbook promises, or verbal commitments.
- Tort claims: Actions causing harm, such as defamation during reference checks, invasion of privacy, or emotional distress.
- Constructive discharge: Making working conditions so intolerable that the employee had no choice but to resign.
- Public policy violations: Firing someone for refusing to do something illegal or for performing a civic duty like jury service.
Federal and State Legislation
A web of laws protects employees from discriminatory discharges and retaliation. Key federal frameworks include Title VII of the Civil Rights Act of 1963, the Americans with Disabilities Act (ADA), the Age Discrimination in Employment Act (ADEA), and the Family and Medical Leave Act (FMLA).
Use objective, data-driven criteria for layoffs and individual terminations. Document all performance issues thoroughly before taking action. Run regular disparate impact analyses if your company plans a reduction in force.State laws frequently shield employees from termination for legal off-duty conduct, whistleblowing, or serving as a witness. They also regulate final paychecks, noncompete agreements, and access to personnel records.
Actively audit termination policies to avoid two main types of illegal discrimination:
- Disparate treatment: Consciously considering a protected status (e.g., race, gender, or age) during a termination.
- Disparate impact: Using a neutral policy, such as layoff criteria, that disproportionately hurts a protected group.
Employers must be careful and consistent in what they say, both in writing and orally, to avoid claims for wrongful discharge.
Preventing Retaliation
Federal and state laws make it illegal to fire an employee in retaliation for exercising their workplace rights. This includes opposing discriminatory practices, filing a complaint, participating in an investigation, or using job-protected leave.
If such a workplace rights defense is possible, HR should separate the termination decision-makers from anyone involved in an employee's recent internal complaint. Maintain clear timelines showing that performance issues began before the employee engaged in any protected activity.
Pro Tip
Be sure to consult current state and local laws in the jurisdiction where the employee actually works, as these often provide greater employee protections than federal mandates.
Expert Advice
Watch these SHRM webinars for more expert advice on HR practices. Earn professional development credits (PDCs) and gain a competitive edge.
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