Tips for a Smart Termination Letter and Exit Interview
Terminating an employee is never an easy thing to do. But by paying careful attention to the termination letter and exit interview, HR professionals and in-house lawyers can help make sure the termination of a worker goes as smoothly as possibleand keep the potential for post-employment lawsuits to a minimum.
In two recent blog posts about termination letters and exit interviews, Julie Brook, blogger and blog editor for Continuing Education of the BarCalifornia (CEB), offered tips for employers when theyre faced with dismissing a worker.
Drawing from the independent nonprofits practice area books on employment law, Brook highlighted key dos and donts to consider when drafting a termination letter or conducting an exit interview. From the employer perspective, wrote Brook, taking those steps can help ratchet down emotion and minimize vulnerability to wrongful termination claims.
Brook said employers should state clearly:
- Notice that the action is a termination
- The date of the termination
- The reasons for the action (be specific, but not too specific)
- The dates and subject matter of prior warnings
- Benefits to which the employee is entitled
- Whether or not there was a review of the decision
- The date of the workers last day
- Time, place, and date for an exit interview
Even as the job market shows some signs of improvement, both employers and employees are still clearly experiencing the effects of the recession. David Peyerwold, CEB publications attorney, told CorpCounsel.com that the parties are feeling its impact in different ways.
Employers want to cut their costs, and one logical way to do that is to trim their workforce, he says. But from the employees perspective, he says, the job market is tight. A termination is a serious thing, he says. They cant just bounce to another job. Peyerwold says a discharged employee may be desperate and willing to take a chance on filing a wrongful discharge or retaliation claim.
Amy Jensen, a labor and employment attorney in the San Francisco office of Hinshaw & Culbertson, notes that in recent years good employees have been caught off-guard by economy-related dismissals. They sometimes think they were unfairly selected because, for example, they took time off to care for a relative or because of their gender.
Termination by itself isnt unlawful, but if an employee perceives that they were fired unjustly, they will be more likely to sue.
Once a decision to terminate has been made, she counsels clients to examine all of the risk factors. Employers should ask, Has that person taken any sort of leave in the past year? Have they filed a workers comp claim? Have they had a baby? Are they over 40? What is their racial or ethnic or national origin background? Have they recently complained about something?
Jensen says that well-constructed termination letters and exit interviews dont work in every situation. But employers should always make sure that the dismissal is documented. Whether that means that you actually hand something to the employee or not, she says, thats up to the employer under those circumstances.
She also recommends having a third party present whenever an employee is being fired. If the employee wont sign off on their termination documentation, she says, the witness can attest to the fact that it was issued. If the employer suspects the disgruntled employee might sue, Jensen recommends offering severance. In exchange, you get [them to sign] a release, she says.
If the terminated employee agrees to an exit interview, Brook said that employers should have it conducted by someone other than the employees supervisor. The interviewer should issue the final paycheck and notify the employee of benefits to which theyre entitled, such as coverage under the 1986 Consolidated Omnibus Budget Reconciliation Act (COBRA). Explain the type of reference that will be given and how the termination will be classifiedpotentially as something other than a firing. In certain circumstances, Brook said calling it a layoff, resignation, or retirement can help the employee save face and move on with a stronger résumé.
But if it is a firing and youre pretty sure an employee is going to file a claim against you, says Peyerwold, it may be important to indicate the termination was for cause. It could be of strategic benefit to use the subsequent unemployment hearing in a for-cause termination to ascertain what a legal case against the company would entail.
One of the most important benefits of an exit interview is that it provides the employee a forum for talking about the company and their termination. It gives them an opportunity to speak their mind a little bit, says Brook. Assuming the person theyre speaking to can stay completely neutral, not be defensive, and take it in politely, it gives that person a chance to be heard while ratcheting down the emotions that come with a termination.
And what should employers do in the future if theyre contacted for a reference?
The employer can be limited in terms of what they can and cant say about an individuals employment. Jensen points out that in many states, there are specific tort claims related to interference with a persons ability to get a job.
Most employers will only give dates of service, she says. Some will also give the last position held or whether or not the employee is eligible for rehire.
Some large employers use third-party services, which allow the employee to authorize the disclosure of information, such as salary, that the employer wouldnt otherwise give out. Otherwise, an employer would never do that, she says. Its too risky. There are too many opportunities to interpret that as potentially interfering with their ability to get a job. Its best to keep it to dates of service and position held.
Most HR personnel wont give a glowing reference to even the most stellar of employees.
Individual managers, on the other hand, often do. Its important, Jensen says, to make sure employees arent giving out recommendations for people willy-nilly.
Social media sites such as Twitter and LinkedIn, which offer the potential to endorse or recommend an individual, can also be dangerous. When your company has a policy that you only provide certain information, you have to make sure everyone follows it.