Handling Employee Termination

For guidance on avoiding the pitfalls in a termination process, we sat down with James Crumlin, Partner in the Nashville law firm of Bone, McAllester, Norton. James specializes in the area of employment law.

Borrowman: For starters, do you have any general advice for employers about handling a termination?

Crumlin: Although it might sound simplistic, you have to figure out why you’re letting the employee go. Is it for poor performance, or a justifiable reason such as down-sizing? Once you’ve made that determination, you can decide the best course of action.

Borrowman: Let’s say it’s poor performance.

Crumlin: In that case, you want to make sure the employee’s personnel file is documented with proof of the poor performance. That could be employee evaluations, job-performance reviews that have been bad, disciplinary actions, violations of company policy, and so on. You want to make sure that those non-discriminatory things are in the file. If they are – if you’ve accumulated a paper trail – that can be a big help if the employee later comes back to claim that you fired them for a discriminatory or non-legitimate business purpose.

Borrowman: How does that advice change if there is a justifiable business reason?

Crumlin: Well, if you’re down-sizing your practice and you have to either lay off, or terminate, an employee, you always want to make sure that you are, indeed, down-sizing. You want to have your business plan or something to show that you are down-sizing or contracting your practice. You can’t turn around and hire two new employees the next month. If it’s a particular department that you’re merging or getting rid of, you want to make sure you have all of that adequately documented.

Borrowman: What about the kind of situation where you conclude that a particular employee is simply too expensive and you feel your only course of action is reduce your payroll? Maybe you’ll hire a lower-cost replacement, or maybe not.

Crumlin: That becomes very problematic because usually a higher-cost employee is an older employee, someone over 40. And, if you replace them with a lower-cost employee – usually someone under 40 – you have a potential violation of age discrimination laws.

Borrowman: What do you suggest to BV practice leaders about what they should say – or not say?

Crumlin: The best rule of thumb is to keep it straight and narrow. If the reason is poor performance, you talk only about the poor performance. Nothing else. You focus only on the facts: the performance evaluations, disciplinary actions, whatever has led to the termination.

Likewise, if it’s a situation where you’re down-sizing, you talk strictly about the down-sizing. You don’t want to talk about performance, because the performance may be just fine. Resist the temptation to “soft-pedal” the news by talking about how sorry you are to lose the person, how good they are, etc. Stay strictly with the discussion of the business reasons.

In both situations, you want to make sure there is no discriminatory intent.

Borrowman: What about a situation where an issue with poor performance might involve chronic lateness or absenteeism which can be traced, in turn, to childcare or other family-related issues?

Crumlin: Here, as well, you want to stick with the discussion of the employee’s performance. You go strictly by your company policies. When performance triggers disciplinary action, the action has to be taken according to company procedures which apply equally to everyone. If you’ve done that, you’ve given yourself what you need if and when the time comes for termination.

Borrowman: Which speaks to the value of carefully crafted personnel policies?

Crumlin: Absolutely.

Borrowman: And the importance of consulting an attorney familiar with employment law in your state?

Crumlin: Yes.