Crib Sheet: Going Separate Ways
When it comes time to part ways with an employee, the conversation is never easy—but it’s important to get it right. At the labor and employment legal practice at Messner Reeves LLP, we have seen numerous situations that haven’t been handled properly, with both parties incurring tremendous (and unnecessary) hardship. Regardless of who initiates the departure, there are a number of legal factors and recommendations for business owners to keep in mind, many of which also happen to be the right thing to do.
As an operator, you are responsible for understanding and following applicable employment laws, and it’s easy to overlook or misinterpret the nuances. Engaging an employment attorney is the best way to navigate labor and employment laws, questions, regulations, and concerns.
If an Employee Gives Notice of Resignation
At-will employees can cease employment at any time, for any reason. Should an employee of your business give notice of their resignation, there are a few things you should keep in mind:
The employer’s main responsibility upon receiving a resignation notice is to negotiate its duration.
There is no standard requirement for the length of notice an employee must offer with their resignation. Two weeks is standard, but this is not mandatory, and seeking mutual agreement of the length of notice given is a best practice for both employee and employer. Above all, it is usually best to immediately accept the resignation, and to avoid actions that convert a resignation to a firing. (A typical example is telling an employee to leave immediately after they give two weeks notice, and then not paying them for the two weeks. That can be deemed a firing.) When negotiating, you should also consider the following:
- Potential workplace issues: If the employee remains after giving notice, will they be toxic to the workplace? Will they damage company morale? Are they going to become unproductive or or disruptive? By understanding these dynamics, employers can navigate the best course of action for the company.
- Potential threats or concerns: Your number-one focus should be to quickly restrict all computer and IT access for an employee who resigns. You must also be mindful of physical property, intellectual property, and the customer experience.
Keep the relationship amicable throughout the employee’s remaining tenure.
The goal with any employee relationship is to keep it positive, productive, and respectful. This foundation shouldn’t change after an employee notifies you they are resigning.
If the Employer Must Terminate Employment
There are two typical reasons for termination: misconduct and poor performance. In cases of severe misconduct (an employee is caught stealing, engaging in workplace violence, or otherwise breaking the law), immediate discharge may be appropriate once the facts are established. But most cases of misconduct—and nearly all cases of performance problems—are not that clear-cut. In those cases, you have a responsibility to the employee and their legal rights; you should ensure you follow tried-and-true protocols to minimize your potential legal risks. Should you find yourself in a situation where an employee must be terminated due to minor misconduct or poor performance, we recommend you keep the following in mind:
Documentation is key.
With severe misconduct resulting in immediate discharge, pre-termination documentation may not be possible. However, in cases of minor misconduct or poor performance, documentation can be make-or-break. If a discharged employee decides to take their case to court and there is no written documentation, it will be difficult to defend your case—and research shows that juries punish employers that do not document. Here are some best practices:
- More is more: Document as much as you can, as often as you are able.
- Be specific: Different types of warnings are warranted depending on the severity of the situation. But all communications with an employee regarding misconduct or performance should include: the employer’s expectation or policy that is not being met by the employee; what the employee needs to do to meet the employer’s expectation; and the consequence for failing to do so, which should clearly state that further corrective action, up to and including employment termination, is possible.
Clear communication is critical—and should begin before termination in cases of minor misconduct and performance issues.
Keep performance conversations short, honest, and business-focused. Even if it’s uncomfortable to communicate candidly, it’s critical that the employee understands what the issue is and how to improve it.
Review the job description and expectations of the position.
It is crucial that your employee understands the expectations of the position, the company, and the management team. These must be clearly communicated from the outset of performance conversations. On the chance that the employee is terminated and brings a legal challenge, an outsider (such as a judge or jury) will use these expectations and the knowledge of how they were delivered as the foundation for a decision.
Create a written performance improvement plan.
If initial communications do not eliminate the misconduct or performance issue, creating a written performance improvement plan will identify key points in the employment history when concerns, feedback, and action items were noted. This plan should set clear expectations—imperative to an employee’s success—and a timeline for follow-up. A well-written performance improvement plan ideally corrects the employee’s shortcomings and helps them succeed, but if it does not, it serves as effective documentation establishing the basis for corrective action or termination.
Have the termination conversation.
Before we get into best practices, we’ll reiterate: We highly recommend you contact an employment attorney before you have this conversation with a worker. Not only can the attorney help you plan the conversation, they can also make sure you’re not unwittingly walking into an overly risky situation. Here are some additional points to keep in mind:
- Have a witness in the room: It’s always good to have a witness who is in a position senior to the employee for any performance or corrective discussions, if possible.
- Be direct and to the point: Give the employee the honest reason for dismissal. You don’t have to go into detail. If you’ve previously documented problems and/or drafted a performance improvement plan, none of your reasons should be a surprise.
- Don’t debate: Make it clear the decision has already been made.
- Pay up: Have the worker’s final paycheck (including all compensation and benefits due up to that date) in hand. If you pay electronically, you still need to pay everything they’re due the same day.
- Be respectful: Don’t embarrass the employee. Protect their dignity and privacy.
- Be discreet: Don’t announce that you’ve terminated someone to the rest of the organization. Simply say, “Karen is no longer with us.”
Consult an attorney about separation agreements.
In some cases, employers may offer an additional benefit to the employee in exchange for full release and waiver of all legal claims. We recommend any agreement of this nature is discussed with, and prepared by, legal counsel.
A Quick Note on Unemployment
Unemployment is a complicated, highly involved process. If the employee leaves by choice, they’re theoretically ineligible for unemployment. However, if the employee claims the workplace was toxic and they felt forced to quit, there is the possibility they may receive unemployment. No matter the circumstances, unemployment is not something that should be of major concern because ultimately, it’s out of your control. It’s best to focus on the factors you can control, such as performance, behavior, and communication.
Bottom Line
What is the cleanest way to part ways with maximum clarity and no retaliation? There is no way to guarantee you won’t get a legal claim, but your best defense is to be honest with your employee and have the proper documentation to provide detailed evidence, as well as justification, for your decision.
John Shunk is a partner at Messner Reeves LLP, a law firm in Denver and other U.S. locations. He regularly assists employers with labor and employment law matters. If you’re a Colorado restaurant in need of assistance, reach out to jshunk@messner.com.
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