Creating a Successful Termination Program and Exit Interviews

By Bradley T. Adler, Freeman Mathis & Gary, LLP

It is estimated that over 80% of all employment lawsuits arise from termination or disciplinary proceedings. Therefore, actions related to such proceedings should be undertaken carefully, responsibly, and tactfully.

One of the best ways to avoid potential future conflicts is by conducting discharge meetings and/or exit interviews. These meetings are a highly underutilized method of learning information that may benefit the employer by finding out causes of employee turnover and also help the employer identify potential lawsuits at a very early stage and avoid them through early discussion or conciliation with the employee. An employer should take all necessary measures to insure that the discharge meeting is conducted in a sensitive and fair manner. The following discussion outlines some important considerations the employer should examine prior to, during, and following an employee’s separation from the employer.

Step 1: Is The Termination A Surprise?

The Termination Decision Should Not Come As A Surprise To The Employee If The Employer Has Adhered To Its Disciplinary Program.

More often that not, a good indicator of the future disgruntled former employee who decides to sue his or her employer is whether the employee would be legitimately surprised with the decision to terminate his or her employment. Of course, there will always be the employee who refuses to see that he or she had ever done anything wrong, despite the employer's best efforts to place the employee on notice of its dissatisfaction with their performance. However, if the employer made every effort to notify the employee of specific performance issues through written warnings and verbal discussions, the employee should have seen "the writing on the wall" by the time the issue of his or her termination is raised. On the other hand, if the decision is "out of the blue," the employee may begin to consider whether the "real" reason behind the termination was based on unreasonable or unlawful motives.

Therefore, before you act, ask whether the employee will be surprised. If the answer is in the affirmative, the employer should consider whether other disciplinary procedures, such as written and/or verbal warnings, should first be utilized prior to termination.

Step 2: Write It Down

In Advance, The Employer Should Prepare A Written Separation Notice Stating The Reason For The Employee’s Discharge.

While virtually every manager today recognizes the need for documentation, the lack of adequate documentation still remains the single most common mistake in making termination decisions. Managers must recognize that their companies may have to explain a termination decision long after it occurs. Documentation is necessary when memories are dim as to the circumstances of the termination or when the individuals involved are no longer with the employer. See Fuentes v. Perskie, 32 F.3d 759 (3d Cir. 1994) ("an employer which documents its reasons for taking adverse employment action can often be more suitably described as sensible than devious"). In addition, the absence of documentation may allow the terminated individual to create an inference that the employer’s motivation for an employment action was for reasons other than those stated.

While the need to document is clear, it is equally important that managers understand that poorly prepared documentation may well hurt an employer’s case. Just as good documentation is the key to successfully defending a case, bad documentation may place the employer in an untenable position. While there is no particular required format, the manager should ensure that all disciplinary documentation contains the following elements:

Required:

1. the date of the termination;
2. the signature of the person with proper authority to terminate the employee;
3. the signature of the employee (if presented in person to the employee);
4. the specific reason for the termination in detail;
5. notification of employee rights and the rights of any qualified beneficiaries to continue health care coverage under COBRA after the termination; and
6. contact information should the employee have questions about COBRA or other matters contained in the termination notice.

Optional But Good Ideas:

1. request that the employee return employer property and/or equipment;
2. request that the employee return the employer Handbook;
3. request that the employee return keys, credit cards, entry cards, and/or ID cards;
4. request that the employee deliver all email and computer-related passwords;
5. request that the employee clean out his or her desk, office, locker, etc.;
6. information regarding employer-provided life insurance plans and/or the transfer of pension plans or 401K plans.

Importantly, the employer should make certain that the reason for the employee’s termination can be substantiated. Therefore, the employer may wish to temper the reason for the termination to the actual information known to the employer at the time of the termination. For instance, if the employer desires to terminate an employee due to stealing employer funds, however, the employee has yet to be convicted of any crime, the proper termination notice would state the reason as "terminated due to suspicion of theft of employer property, " rather than "terminated due to stealing." The key word in the notice is suspicion.

The employer’s subsequent inability to prove the stated reason for the discharge understandably makes the reason suspect. Moreover, the inclusion of a reason that is not truthful may expose the employer to a defamation claim when the employer includes that reason in other documents prepared in connection with the termination.

Step 3:The Termination Meeting

Conduct An Unemotional Termination Meeting With The Employee And A Witness.

At the termination meeting, the management official conducting the meeting should explain as objectively and unemotionally as possible the reasons behind the employer’s decision to discharge that employee. A witness also should be present. The individual assigned the responsibility of terminating the employee should never suggest that he or she does not agree with the decision. Most importantly, the substance of the termination meeting should be documented by one of the individuals present, preferably the witness who is otherwise minimally involved in the discussion. It generally is not advisable to tape-record the meeting. Instead, the employer should take notes of what occurs.

The participants should endeavor to maintain their objectivity and avoid any heated discussion regarding the circumstances of the termination. Where the termination meeting is conducted in a manner that is highly emotional, the employer subjects itself to potential liability for intentional infliction of emotional distress. Discrimination plaintiffs often include a supplemental state law claim of intentional infliction of emotional distress with their Title VII discrimination claims. In most cases, the termination of an employee is generally not extreme or outrageous conduct, and thus does not support a claim for intentional infliction of emotional distress.

After the termination meeting, the following checklist should be considered by the employer:

1. Place the termination notice in the employee's personnel file.
2. After reviewing their accuracy, place any notations made during the termination meeting in the employee's personnel file.
3. Has the employee been compensated for hours worked and any unpaid but accrued leave that the employer agrees to pay or state law requires to be paid? If not, have an appropriate check cut.
4. Have 401K and pension plan administrators been contacted in order to ascertain the options available to employees, as well as the proper methods to be used in informing employees of their rights under the plan?
5. Have the appropriate COBRA forms been delivered to the employee?
6. Have the appropriate Department of Labor forms regarding unemployment insurance compensation been sent to the correct agency?
7. Have the employer's property and equipment been returned?
8. Have the employee's computer and email passwords been delivered and/or deactivated?
9. Have the employee's keys, credit cards, entry cards, and/or ID cards been returned?

Given that the vast majority of employment lawsuits arise out of involuntary terminations, it is important that companies consistently assess their policies and procedures related to the discipline and, if necessary, the termination of their employees. Such policies and procedures, if created, maintained and followed by all employees, can have a substantial impact on employees and the number of lawsuits a company faces. They can, in some instances, prevent an employee from filing suit. In other instances where a lawsuit has been filed, they can help the employer defend its actions. In any event, they provide the employer with a tool to help build a good working environment and eliminate improper actions by rogue or even well-intentioned managers.

Bradley T. Adler is an attorney in the Labor Law and Employment Litigation Section of the Atlanta law firm of Freeman Mathis & Gary, LLP. Mr. Adler represents public and private sector employers on a national, regional and local basis in resolving labor and employment related issues, including employment discrimination claims, wage and hour claims, family and medical leave claims and disputes regarding non-compete, non-solicitation and non-disclosure agreements. Employers are advised to contact competent legal counsel for advice on issues in their unique workplace.