If you think that firing an employee is as simple as handing out a pink slip and a severance check, think again.
In today's complex and litigious workplace, firing an employee -- can prove to be the opening salvo of a legal battle that winds up enriching the employee at the company's expense. Business owners must exercise great care in deciding whom they fire and how they do it.
"For generations, employers relied on the so-called 'at-will' provisions of the law, which held that work relationships existed at the discretion of companies and their employees," says Thomas P. Murphy, an attorney with the Washington-based law firm of Reed, Smith, Shaw & McClay.
"Put simply, this provision -- based on the English common law -- meant that either party could sever the relationship at any time for a good reason, a bad reason or no reason at all," he adds. "But this laissez-faire approach began to lose its force in recent years as the courts chipped away at the 'at-will' provision, holding that employers should have valid grounds for terminating employees and should treat them fairly in the process.
"Today this concept of fairness dominates the legal environment surrounding employee dismissals. Regardless of the technicalities of the case, juries want to know that a person dismissed from his company was treated fairly and decently by his employer."
With this in mind, employers will want to take these steps to protect their interests when firing employees for misconduct or unsatisfactory performance:
* Never fire an employee at the first sign of trouble. Instead, suspend the person with pay and then investigate the facts.
All too often, an employee accused of wrongdoing is fired in the heat of the moment without anyone taking the time to determine if he is truly at fault. If there's another side to the story, and if it can vindicate the employee, you'll want to hear it before you take action rather than learning of it in a court of law.
* Keep an open mind throughout the investigation, interviewing witnesses and examining all physical evidence. Ask those questioned to keep whatever they learn confidential in order to protect the privacy and the reputation of the parties involved.
* Interview the employee targeted for dismissal, giving him the opportunity to present his side of the story.
"The idea isn't to interrogate the person but to allow him to present his viewpoint, to offer additional evidence and to rebut the statements of those who have spoken against him," Mr. Murphy says. "This courteous treatment is critical, not only because it is the fair thing to do, but also because juries don't like to see employees subject to rubber-hose tactics. Evidence that the employer granted the employee a fair hearing holds a great deal of weight in court."
* When interviewing an employee, have a witness present to monitor the discussion and to take notes of the conversation.
If the employee confesses, get the confession in writing and have the employee sign it.
* Designate an executive to review all prospective terminations.
Before final action is taken against an employee, have the executive verify the following: a violation of company rules occurred; the case has been investigated and the investigation has been documented; the employee has had the opportunity to show evidence and refute the testimony of others; the employee's misconduct is severe enough to warrant termination and this action is consistent with the company's past practice; the termination does not violate any state or national laws (where this is questionable, an attorney's opinion should be sought).
* Hold an "exit interview," officially informing the employee that // he is being terminated.
State clearly the grounds for dismissal, avoiding such vague statements as "It just didn't work out," or "I guess the chemistry wasn't good."
The idea is to demonstrate clearly and forcefully that the firing is the result of a carefully documented decision.
"Following these guidelines may not insulate your company from litigation, or from the gripes of disgruntled employees, but if you do wind up in front of a jury, proving that you took these steps will improve your likelihood of winning," Mr. Murphy says.
Review your company's dismissal practices with an attorney well-versed in the applicable state and federal laws.