How to Fire Someone (Without Getting Sued)

On paper, it looked like the perfect fit. The applicant had all the experience you wanted, an engaging interview, and proficiency in three languages. But a few months (or years!) into the job, and you just aren’t feeling it anymore. That’s usually the time I get a call from the entrepreneurs I work with saying, “It’s just not the right fit. Can we fire them?”

Of course you can. But…how to do it and what the risk level is depends on the individual facts. Here’s the process I walk through with clients contemplating a termination:

Is termination fair? Does the employee know that their performance or conduct isn’t up to par? If they have violated a company policy, is the policy in writing, and has the rule been enforced equally?

Does the employee have any potential legal claims? Have they been paid properly, given mandatory meal breaks or overtime?

Consider the timing. Has the employee recently complained about working conditions or pay? Has the employee taken sick leave or had any medical issues? You want to be careful that the timing doesn’t seem retaliatory for any complaint or protected time off.

Once you’ve decided to move forward, you have to prepare for that difficult termination meeting. I can offer some pointers to hopefully make a tough transition a bit less painful:

Don’t wait.

There’s never the perfect time, and there’s always an excuse not to do it today. There’s no best day of the week or time of day that makes it easier, but waiting to notify the employees comes with the potential risk that they get injured at work, diagnosed with an illness, or even get pregnant, making the termination timing seem retaliatory.  If you must wait to conduct the termination, document your decision internally and the reason that you are waiting. Perhaps draft an email to your business partner saying, “I agree we need to terminate Sally because of the performance issues we discussed. Let’s plan to do this next Tuesday when you are back from vacation.” That way, if something comes up before the termination date, you have some protection against a retaliation or discrimination claim.

Identify the best way to communicate.  

Make every attempt to do it in person rather than by phone or Skype.  Have a company witness present. Give the employee a chance to respond or tell their side of the story, even if it can’t change the outcome. Tell the truth about the reason for termination; don’t make it a fake layoff if you are replacing the position. Whatever you say can be used to discredit you in the event an employee does pursue legal action.

Consider any security issues.

This includes employee security, data and technology resources, and confidential company information. Be sure you have electronic access to everything you need for business continuity purposes, get any confidential material before the employee leaves the premises, and if you think the employee is prone to violence, hire security to assist.

Have the paperwork ready.

Some states, including California, require that employees be paid at the time of termination, so check the state in which your employee is located to make sure you are issuing final pay properly (including accrued but unused PTO if required by law or your policy). Also check on any state-mandated termination documents or letters that you need to give a terminating employee.  You may also want to consider whether offering severance pay in exchange for a release of legal claims makes sense. It’s usually cheaper than resolving a claim on the back-end, and if you are seeking capital, it’s helpful for potential investors to know the company has cleaned up any potential employment liabilities. Check with an attorney who can assist in preparing all termination documents.  The dollars spent up front are far less than those spent to resolve a claim on the back-end.

Communicate to the rest of the staff.

While you need to be mindful of employee privacy, you can’t really ignore the fact that they just watched a coworker pack up their desk or just received a text from. Address employee morale with empathy and a plan for moving forward, e.g. “I know Sally was an important part of the team, and we have already taken steps to find someone with XXX experience who we think will be a better match for the upcoming team projects.”

Sahara Pynes is an attorney at Fox Rothschild LLP whose practices focus almost exclusively on minimizing liability against lawsuits through preventative counseling on a range of employment issues.  She works directly with business owners and their management teams to enhance company culture and provide practical strategies to manage human resources and risks. Sahara was named one of Angeleno Magazine’s Most Dynamic Women of 2018.  If you’re a business owner who doesn’t know what forms to give a new hire, how to properly classify and pay employees/contractors, or just wants to button up their HR issues, reach out to Sahara at SPynes@Foxrothschild.com to see if she can help.

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