Always Check the Ice – What Employers Need to Consider Before a Termination

Terminating an employee without taking time to implement proper steps is like skating onto a lake in December without checking the ice: full of risk. While deciding to terminate an employee may seem like a straightforward process, employers can unwittingly find themselves on thin ice if they fail to think through the following big-picture considerations.

It should not be a surprise. Yes, Minnesota is an at-will employment state, meaning that employers do not need a reason to terminate an employee. However, there obviously is a reason for the termination, and that reason should be apparent to the employee based on prior communications and discussions with them. An employee surprised by their termination usually means greater risk.

Assess risks. Would the employee have reason to think that a protected characteristic contributed to their termination? Has the employee recently engaged in protected activity? Is there disagreement among HR and management about terminating? Has the motivation of the person who proposed the termination been evaluated? While the possibility of a lawsuit (even if frivolous) cannot be evaded entirely, a proper risk assessment will better inform the decision and may allow for the process to be tailored towards mitigating those risks.

Consider obtaining counsel. This is not a sales pitch. The easiest and most cost-effective time to consult with an attorney regarding a termination is before it happens. If there are risks, an attorney can help evaluate them and consider the options for mitigating them, such as a severance agreement. Consulting with an attorney will be cheaper than defending a lawsuit.

The who, what, and where. Arrange for a meeting in a private place and know in advance what will be conveyed. If giving a reason for the termination, determine that prior to the meeting. If the employee is being terminated for performance or behavior issues, it may be beneficial to have the employee review and sign a write-up summarizing the conduct. The interaction must be professional, and free of any wavering or hesitancy. HR and management need to be on the same page concerning the message. Special rules apply if the employee makes a written request for the reason for the termination, so be familiar with the timeframe required for responding to that.

Final paychecks, COBRA, and benefits. Requirements for issuing a final paycheck differ when the employer terminates an employee. Be prepared to process the final paycheck prior to normal payroll, if required under the circumstances. If COBRA applies, be sure to provide the COBRA notice. Also ensure that other benefits are handled properly, according to law and company policies.

Company equipment. Be sure the “where, when, and how” of returning company property is addressed. Know what the lawful options are for addressing unreturned or damaged property. Hint: it is almost never a deduction from the employee’s final paycheck.

Concluding Thoughts. Consider whether an exit interview makes sense under the circumstances. Give thought to how the departure will be communicated internally. And ensure that final documentation is placed in the personnel file.

The next time you think a termination is warranted, giving due consideration to these items could spare you from an icy plunge.

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