Terminating someone’s employment is never fun, but there are five things you need to know before you fire your employee to make it as smooth and painless as possible.
1. California Labor and Employment Law
California is generally an “at-will” state, meaning either the employer or employee can terminate the employment at any time for any reason or no reason. However, there can be exceptions, such as anything written into a contract or anything that is classified as discrimination or retaliation, among other things. Before you fire your employee, you need to know if any exceptions apply to the situation.
2. Your Own Written Policies as stated in your Employee Handbook
Before you fire your employee, you need to know exactly what your own company policy is. This is more than your own sense of “how we do things here.” Review your Employee Handbook for what you’ve communicated officially and in writing to your employees and be sure your actions comply with your policies.
3. Facts about Why You’re Taking This Action
Even though California law says you can fire an at-will employee for any reason or no reason, this doesn’t protect you from claims of discrimination, retaliation, or wrongful discharge. If, despite your best efforts, you end up in in an administrative or court proceeding, you’ll need to be able to prove you had a good reason for firing your employee. So you need to gather and review the facts that have prompted you to take this action, including documented and investigated violations, incidents, prior disciplinary actions, etc.
4. A Plan for How You’re Going to Tell Them
You never want to “wing it” when firing an employee. Have a plan for who will tell the employee as well as when and where. You’ll also want to know what you’re going to tell the employee. You should stick to the facts and be clear and brief.
Also, before you fire your employee, you also need to have all of their next steps lined up. These next steps for the fired employee include their final paycheck, unemployment notices, benefits options (including COBRA), etc. Other next steps include the employee’s return of any company-owned property (keys, phones, computers, customer files, etc.).
Also, remember to plan for IT and security issues in advance to protect your confidential business information and property from being put at risk from a disgruntled former worker whose access isn’t shut off timely.
5. Consider a Severance Agreement
A severance agreement is a contract between the employer and departing employee where the employee voluntarily resigns and waives claims against the employer in exchange for some benefit – a cash payment, a job reference, etc.
Routine use of severance agreements with departing employees, or once-in-a-while use of severance agreements for high-risk situations, can go far to mitigating overall legal risk with former staff.
California has recent legislation that impacts the language that can be used in severance agreements depending on the specific situation. Be careful you are using an updated agreement, reviewed by an attorney.
We’re Here to Help
Rather than defending yourself against a wrongful termination lawsuit, it’s much better to take a proactive approach and avoid litigation altogether if possible. It’s less time-consuming, less costly, and less stressful.
It can be helpful to consult an attorney who specializes in labor and employment law.