Life Cycle of an Employee Termination
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Transcript of Life Cycle of an Employee Termination
Life Cycle of an Employee:
TerminationOctober 8, 2015
Last but Not Least….
� Today, we will discuss the conclusion of the
life cycle of an employee—termination.
� Whether resignation, RIF, poor performance,
or other reason, employers MUST plan for
employment terminations.
� Our employment professionals are here
today to offer practical, proactive advice.
Documentation
� Previous webinars discussed (among many other
things):
� Importance of documentation.
�Significance of job descriptions.
�Use of performance reviews.
� Documentation is the link between all of the other
topics we have discussed in our past webinars and
the actual employee termination.
Reasons for Termination
� Employees can be separated or terminated from
employment for many reasons:
• reduction in force;
• termination for poor performance;
• termination for misconduct;
• resignation.
� In all of these situations, documentation is essential.
Reduction in Force
� Reasons for RIFs:– Lack of certain types of work or the elimination of a
product or service.
– General lack of work, new efficiencies, acquisitions or sales.
� Selection of employees:– Criteria?
– What does documentation tell the employer?
– Who is performing consistently with the job description?
– Who has the lowest job performance ratings?
Termination for Poor Performance
� More than any other situation, terminations for
poor performance require thorough
documentation over a period of time.
• How does the employee’s performance match
his/her job description?
• Were there previous warnings?
• Were there previous suspensions?
• Was there progressive discipline and was the
employee notified of prior examples of poor
performance that were documented?
Termination for Poor Performance(continued)
• Is the termination consistent with other situations?
• Were other employees terminated for similar poor
performance under similar circumstances?
• Were other employees allowed to continue to work
when their performance was poor?
� Documentation on all of these points is crucial.
Termination for Misconduct
� Some misconduct is so egregious that it may not
require much prior documentation.
� Some types of misconduct may not appear to be
so egregious.
• However, in many situations it may be necessary to
have previous documentation regarding such
conduct.
� Unemployment benefit implications.
Failure to Document
� A terminated employee may argue that the stated reason
for termination was not genuine, but that the termination
was because of a protected classification or activity that
other speakers will review in more detail.
� Only thorough documentation will allow an employer to
demonstrate that the motives were non-discriminatory.
Resignation
� If the employer is pleased, should action have been
taken earlier?
• Supervisors taking easy way out?
• In process of documenting issues?
� If the employer is displeased with the resignation,
why did employer lose a good employee?
• Did employee previously communicate
dissatisfaction?
• Beyond employer control?
Risk Management
� Risk Resolution
• Ensure proper documentation to support termination
in anticipation of a potential claim
• Determine the appropriateness of severance options
(monetary and non-monetary benefits) in exchange
for full release of claims
� Employment Agreements
� At-Will Employment v. Employer/Employee Risk
Factors
Employer Risk Factors
� Lack of documentation to support termination
� Lack of Company Policy supporting
termination/contrary to Company Policy or
documents
� Problematic Company Policies
� Inconsistent treatment with other employees
� Statements/documents contrary to stated reason
for termination
Employee Risk Factors
– Race
– Color
– Gender
– Gender Identity and
Expression
– Sexual Orientation
– National Origin
– Religion
– Age
– Disability
– Pregnancy
– Marital Status
– FMLA Leave
– Genetic Information
– Military Status
Protected Classifications (Generally)
Employee Risk Factors (continued)
� Discrimination/Harassment Complaint
� Whistleblowing
� Filed a Workers Compensation claim/on leave
� Protected leaves of absence (FMLA, ADA)
� Request for Disability Accommodation
� NLRA Section 7 Concerted Activity
� Filed an NLRB charge
� Discrimination Charge filing
� Other Claim Demands
Employee’s Recent Protected Activity?
Risk Management for Different
Types of Terminations
� Reductions in Force (RIF) / Layoffs
• Review Employee Risk Factors for employees
selected for RIF/layoff to identify any unintended
trends
• Confer with managers to determine whether the
stated selection criteria is accurate and applied
even-handedly
• Severance agreement/release – OWBPA Exhibits
Risk Management for Different
Types of Terminations (continued)
� WARN Act – Risk Management:
• Review Federal WARN Act requirements
• Review applicable State requirements (mini-WARN
Acts)
�Employer Coverage thresholds vary
�Exceptions vary (including sale of business)
�Threshold for affected number of employees vary
Termination Meeting Considerations
� Attendees on Behalf of Employer / Employee
� Day and Time Issues
� Location
� Security Concerns
� Disabling access to facility and information systems
� Explanation to remaining employees
Termination Meeting Agenda
� Who terminates?
� Have talking points for employee conducting termination
• Date of separation
• Reasons for separation [RIF / for cause]
• Importance of truthful reason
• If for performance or conduct, articulate disciplinary record
• What not to say or do
• Transition to benefit discussion
Termination Meeting Agenda (continued)
� Explanation of Benefits
• Availability of severance/pay in lieu of notice
• Availability of unemployment compensation
• COBRA and continuing medical coverage
• Other benefits, i.e. PTO payment, retirement, stock
options, expense reimbursement, bonuses, tuition
reimbursement, life insurance, outplacement
services
• Continuing obligations – Confidentiality/Non-
competes/ non-solicitation agreements
Termination Meeting Agenda (continued)
� Employment references
� Retrieval of company property
� How and when will employee be allowed to
retrieve personal items?
� How will employee exit the facility?
Severance and Release Considerations
� Should company pay severance?
� What is reasonable amount?
� Is termination covered by company severance
policy?
� Should a severance and release agreement be
entered?
� Valid release must be in exchange for consideration
to which employee is not otherwise entitled.
Severance and Release Considerations (continued)
� What is employee’s age?
• If 40 or over, 21/45 day consideration period and 7 day
revocation period.
• If under 40, reasonable time to consider.
� Is separation being offered to more than one
employee?
� OWBPA
� Will severance be paid in lump sum or over time?
� Importance of IRS Code 409A provision.
Severance and Release Considerations (continued)
� Other provisions that must be included in
severance and release agreements
� Provisions that should be included
� Provisions that typically are included
Post-Termination Considerations
� Let’s talk about how to protect company property
and manage post-termination claims for those
times when employees aren’t so happy.
• Protection of Intellectual Property
• Alternative Dispute Resolution
• Other Ways to Limit Claims
Protecting IP
� Executed confidentiality/nondisclosure agreement.
� Proactive measures at or before time of
termination to recover property and avoid
sabotage.
� Enforcement of those clear, signed agreements.
• Post-termination reminder letter.
• Cease and desist.
• Litigation.
Alternative Dispute Resolution
� Alternative Dispute Resolution (ADR) is an
alternative to litigation in state and federal courts.
• Mediation
• Arbitration
� Benefits
• Parties control the process and select
mediator/arbitrator.
• Can be less expensive and less formal.
• Process can be quicker.
Alternative Dispute Resolution(continued)
� Benefits (continued)
• Employers have higher success rate.
• Confidentiality.
• No class actions.
� Downsides
• Limited appeal rights.
• Can be as lengthy and expensive as court.
Alternative Dispute Resolution(continued)
� ADR policy or provision must be drafted correctly:
• Formation and consideration.
• Fairness.
• Mutuality.
• Class action waivers must be clear and conspicuous –
and watch out for the NLRB!
• Other statutory requirements.
• Other considerations.
• Consult with counsel.
Other Limitation of Claims
� You have heard a number of ways to limit claims
today, all of which are very important to limiting
claims:• Compliance with company policies.
• Documented reasons for termination.
• Careful evaluation of layoffs and WARN requirements.
• Severance agreements.
• Careful planning of termination meeting.
• Control of post-termination communications by other employees.
• Handling of unemployment claims.
� The key—BE PREPARED!
Contact Information
� Bradley G. Kafka
� Elizabeth T. Gross
� Lon R. Williams
� Judy Yi
Polsinelli PC
www.polsinelli.com
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– Blog: polsinelliatwork.com
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