Preventing Employee Claims While Disciplining and Terminating

Preventative Measures for the Termination Process

Like the disciplinary process, the termination process should be objective and based on well-documented facts and details, including statements from the employee and other witnesses. It’s usually not a good practice to fire someone on the spot; a comprehensive investigation should be conducted first. After a thorough investigation, if you determine an employee must be terminated, you should follow a fair protocol to avoid a lawsuit.

Some sources say the best time to terminate employees is midweek instead of a Friday afternoon. Timing is critical; whatever day you choose to terminate an employee, ensure it will minimize the risk of humiliation to all parties involved and will cause the least disruption to company operations.

Use these steps to prepare for the termination meeting:

• Gather copies of documentation for the employee, including information about COBRA and severance packages.
• Compile a list of company equipment that the employee must return.
• Assess potential security issues.

Keep these points in mind during the meeting:

• Meet in a neutral location.
• Have one or two others present, including a representative from your HR department.
• Give a clear and consistent explanation of why you terminated the employee.
• Avoid talking too much during the meeting or making promises you can’t deliver, such as helping the employee look for another job.
• Treat the employee with dignity and respect during the entire process.
• Allow the employee to vent if they get angry, but refrain from arguing about the decision.

After the meeting is finished, do the following:

• Collect company property from the employee before they leave.
• Unless the employee was terminated for stealing or a violent offense, don’t embarrass the employee by having them escorted out by security.
• Don’t belittle the employee to other staff members after they leave.

Be wary of statements that your company makes to the media and on social media sites, such as Facebook, about the terminated employee. You are not legally protected for comments that are not true or are made with the intent to damage someone’s reputation.

To avoid post-termination claims, it’s also essential to avoid impinging on the employee’s future employment. Direct all reference checks from other employers to your human resources department, or confirm the dates of employment and the last position the employee held.

Another Line of Defense: EPL Insurance

Employee claims can still happen even when you think you’ve done everything to mitigate the risks. Even if you aren’t found liable, lawsuits can be time-consuming and costly. Employment practices liability (EPL) insurance protects your company from costs associated with employee lawsuits. Depending on the limits negotiated with the insurance carrier, EPL insurance provides coverage for defense expenses associated with employee claims highlighted in this article.

What can you do to prevent lawsuits that result from this process? Gaining an awareness of the different types of employee claims and having objective company policies and procedures in place is critical. Although you may be unable to prevent all claims, maintaining accurate documentation about all incidents related to the employee’s disciplinary and termination action will bolster your case, whether the claim is handled at the company level or in court.

First Line of Defense: Objective Company Systems

Establishing a foundation of objective company systems can quell a claim before it happens. Employees are less likely to file claims if treated consistently and fairly. That’s why the following systems should be in place:

• Well-defined company policies—Well-defined employee policies are the backbone of a company culture where employees are treated fairly. Policies should cover harassment, retaliation, and a company’s code of conduct. An outline of procedures for company actions such as performance evaluations, performance improvement plans, and the disciplinary process is also essential.
• Employee handbooks—Once a foundation of fair and impartial company policies is established, employers should communicate the policies to employees through an employee handbook. If written correctly, the handbook could prevent a lawsuit from happening, or it could be a solid piece of evidence in the case of litigation. Necessary for organizations of all sizes, the handbook outlines your expectations of employees and what they can expect from you. Topics such as family medical leave, dress code, work schedules, compensation, harassment policy, and an employment-at-will disclaimer should be included and reviewed by an attorney or human resources department.
  • An “employment-at-will” disclaimer gives the employer the discretion to terminate an employee at any time for a just cause. When you give new employees the handbook, have them sign an agreement to confirm receipt and keep copies in each employee’s personnel file.
  • The handbook should be reviewed and revised regularly, especially when company policies change. Not only is it essential to have a handbook, but it’s critical to enforce the policies consistently and fairly among all employees.
• Accurate employee files—Maintaining up-to-date employee files, including copies of all performance evaluations and detailed reports of employee incidents, is imperative in the event of a lawsuit. All documents in the files should be truthful, accurate, and written using plain, nontechnical language. If an employee disputes a disciplinary or termination action, they will be less likely to sue if there’s a detailed paper trail to back up your decision.

Preventative Measures for the Disciplinary Process

Disciplining employees may be an unpleasant task, but avoiding it could exacerbate the situation and lower the efficiency and morale of your workforce. Employees should be disciplined or terminated only for legitimate, job-related reasons. Under a disciplinary system, employers usually want employees to correct their problematic behaviors and continue as productive workforce members.

Before disciplining an employee, conduct an unbiased investigation of the incident or problematic behavior. In some cases, the employee should be suspended to prevent further misconduct. After the investigation, follow these steps:

• Set a meeting with the employee to discuss the problematic behavior.
• Listen to the employee’s side of the story.
• Inform the employee of future consequences if they do not improve.
• Provide written documentation of the disciplinary action. Have the employee sign the documentation or make a note if they refuse to sign. Provide a copy to the employee.
• Follow up by acknowledging the employee’s improvements. If the employee continues to violate company policies, consider subsequent disciplinary action or termination.

Preventative Measures for the Termination Process

Like the disciplinary process, the termination process should be objective and based on well-documented facts and details, including statements from the employee and other witnesses. It’s usually not a good practice to fire someone on the spot; a comprehensive investigation should be conducted first. After a thorough investigation, if you determine an employee must be terminated, you should follow a fair protocol to avoid a lawsuit.

Some sources say the best time to terminate employees is midweek instead of a Friday afternoon. Timing is critical; whatever day you choose to terminate an employee, ensure it will minimize the risk of humiliation to all parties involved and will cause the least disruption to company operations.

Use these steps to prepare for the termination meeting:

• Gather copies of documentation for the employee, including information about COBRA and severance packages.
• Compile a list of company equipment that the employee must return.
• Assess potential security issues.

Keep these points in mind during the meeting:

• Meet in a neutral location.
• Have one or two others present, including a representative from your HR department.
• Give a clear and consistent explanation of why you terminated the employee.
• Avoid talking too much during the meeting or making promises you can’t deliver, such as helping the employee look for another job.
• Treat the employee with dignity and respect during the entire process.
• Allow the employee to vent if they get angry, but refrain from arguing about the decision.

After the meeting is finished, do the following:

• Collect company property from the employee before they leave.
• Unless the employee was terminated for stealing or a violent offense, don’t embarrass the employee by having them escorted out by security.
• Don’t belittle the employee to other staff members after they leave.

Be wary of statements that your company makes to the media and on social media sites, such as Facebook, about the terminated employee. You are not legally protected for comments that are not true or are made with the intent to damage someone’s reputation.

To avoid post-termination claims, it’s also essential to avoid impinging on the employee’s future employment. Direct all reference checks from other employers to your human resources department, or confirm the dates of employment and the last position the employee held.

Another Line of Defense: EPL Insurance

Employee claims can still happen even when you think you’ve done everything to mitigate the risks. Even if you aren’t found liable, lawsuits can be time-consuming and costly. Employment practices liability (EPL) insurance protects your company from costs associated with employee lawsuits. Depending on the limits negotiated with the insurance carrier, EPL insurance provides coverage for defense expenses associated with employee claims highlighted in this article.