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You Know How To Hire - But Do You Know How To Fire?

As the owner of a small business, the buck stops with you.

You make all the final decisions, from budgets to personnel.

And personnel decisions can be some of the most complicated and potentially costly decisions you’ll ever make.

The decision to hire someone may be easy but if it doesn’t work out and you need to let them go, there are some serious legal implications that you need to think about before you show them the door.

Here are a few things to think about when you’re getting ready to fire an employee who just isn’t working out:

1.Think and Review Before You Act

Before you hire your first employee, you need to make sure that you have policies in place that require review by someone outside the reporting process for the person you’re about to fire.  Let someone other than their direct supervisor look at your documentation before you make the actual decision to fire them, even if that direct supervisor happens to be you.  This will give you an impartial opinion as to whether or not you’ve dotted all your I’s and crossed all your T’s.

2. You Are Ultimately Responsible If Something Isn’t Done Properly

If you have supervisory personnel and don’t directly supervise your workers yourself, get ready for an ugly truth.  Your managers will probably never give you the full story when they first approach you about firing someone.  These decisions can be filled with anger, conflicts of personalities, and a multitude of other issues.  Be prepared to ask the right questions to really get to the bottom of the issue before you approve the dismissal.  And watch for patterns in the requests to dismiss employees from each manager.  Are they laying off people over a certain age? Are they harder on women than men? Keep track of each manager’s firing decisions because, believe me, the dismissed employee’s attorney is going to go after exactly that type of information.  

Ask the questions even if they seem crazy at the time and verify the responses you get. Check and double check all the relevant facts before you approve the decision to fire the employee. 

3. Look at ALL the Documentation

If one of your managers tells you they have something documented in the employee’s file, make sure it’s actually there.  If you are sued by a terminated employee, if some action or inaction or violation is not documented, as far as the court is concerned, it never happened. 

And make sure that all your employees have documentation in their files.  If you fire someone and they are the only person in the whole company with a file containing notes from supervisors, it may give the appearance that you were treating the terminated employee unfairly and singling them out.  Consistency is key.  Treat everyone the same and be fair and professional.  No name calling or unkind characterizations should ever be included in the employee’s file.  

4. If You’re Not Sure, Don’t Do It

If you review the documentation in the employee’s file and have any question about whether or not the termination is justified, rest assured that a jury will, too.  If it’s not a slam dunk, you might want to rethink the decision to fire and delay the action until you have everything in place to support the decision.  Never act in haste with personnel decisions.  You can pay for it in the long run.

If you have any question about whether or not an employee should be terminated, get an expert second opinion.  You always have time to make sure that you’re taking the right course of action and that your decision can be legally defended. 

If you’re an independent business owner or you’re considering taking the leap to business ownership, call us today to schedule your comprehensive LIFT™ (legal, insurance, financial and tax) Foundation Audit.  As your personal legal advisors we will identify any holes in the foundation of your business and what you need to do to fix them. Normally, this session is $1250, but if you mention this article and we still have room on our calendar this month, we will waive that fee.