Termination - Horton Management Law

You’re in charge of managing a workforce. Maybe you own the company. Or you could be in human resources. Or another aspect of management. I assume you want to be considered one of the good employers, right?

In that case, here are 5 things you should never do!

1. Date Subordinates

Okay, you know what I’m talking about. But let’s start with what I’m not talking about. Especially if you own or help operate a small business, it’s reasonable that your spouse or longtime partner may also become involved. I’m not strictly advocating “no nepotism” policies. But don’t cross dangerous lines needlessly!

No matter how well you and your direct reports get along, it needs to stay professional, or at most friendly. Dating, where it could become romantic, isn’t worth the risk. Sure, it might work out great. But there are many ways it could go south.

First, advances may be rebuffed. If that happens, then the relationship between the two of you may be permanently tainted.

Second, even if a relationship develops, what are the motives? Is your employee only dating you to keep the job, to get ahead, to set you up? This just isn’t the right way to look for love!

Third, even if the relationship is real and works out, other employees may not like it. They might see it as creating a bias in favor of the employee you’re dating. And, let’s face it, you probably would, even should, be biased in that situation. What happens if the employee’s performance drops below an acceptable level and you have to fire your significant other?

Fourth, sexual harassment claims. By your desired paramour. From other employees. And these could come months or years down the road in some cases. These claims are a big hit for otherwise good employers!

If you nonetheless do find yourself dating an employee that reports to you, figure out a way to minimize the risk. Yes, there are even so-called “love contracts” where both parties make representations in writing to help the employer avoid liability. Hopefully, you don’t have to go that far in most cases. Reassigning the employee may solve, or at least help, the problem. But don’t just assume you can date an employee and have everything go smoothly. It probably won’t.

You don’t have to just take my word for. Get The Scoop on Love Contracts.

2. Keep Problem Employees

Any business with multiple employees over time will eventually end up with a bad one. This doesn’t necessarily mean someone with bad motives, but it can. More often, it’s just an employee who isn’t the right fit for the job for whatever reasons.

Some good employers think they can right the ship no matter what. “I hired this guy . . . I can fix him.” But that philosophy doesn’t always work. Okay, it usually doesn’t work.

Even if you could retrain a chronically underperforming employee, it probably isn’t worth the effort. You could find someone else better out there right now.

And if someone lies to you once or twice, can you afford to give them another chance?

This doesn’t mean you should have a zero tolerance policy in all respects. It just means you need to be realistic. If someone isn’t the right fit now, they probably won’t be in six months either.

Here’s another secret. The longer you employ someone, the more it costs to get rid of them. There are many inputs in this calculation. They may include training costs, severance pay, risk of litigation, etc. Do the analysis earlier rather than later, compare the cost of trying someone else, and make the difficult decision. You’ll be glad you did.

Check out my 5 Tips for Firing Problem Employees!

3. Hire People Like You

We are all predisposed to like people who resemble us. We’re automatically more comfortable and familiar with them. We know how they think, how they behave, and what motivates them. Or, at least we assume we do.

There are two big problems with hiring based on similarities:

The first is a legal concern. Discrimination. If you only hire/promote people similar to you in race, age, gender, etc., then you may be systematically disadvantaging particular classes of candidates. This can mean litigation, legal fees, and settlements or damages awards. Not good, obviously.

The second is a business concern. Do you really need more people like you? You already do you better than anyone else. What you need is a mix of “not-yous” to complement your strengths and weakness.

This doesn’t mean you can or should only hire people who are nothing like you. To be sure, only hiring employees of a different race or sex may also constitute discrimination. But good employers embrace diversity of experience, personality, characteristics, etc., not only because it’s the right thing to do, but because it works for their business too!

While you’re at it, Don’t Ask These Questions During Job Interviews!

4. Ignore Complaints

No one is perfect. Your business is going to make mistakes, or at least the people working for you will. It’s better to foster a culture where people are open about their mistakes so that they can be corrected. Otherwise, they build on themselves, making matters worse.

So, how do you foster this positive culture? First, don’t overreact. Try not to scream or disparage someone when you find out they did something wrong. If this is simply a performance matter, then try to correct it and move on. Obviously, consistent poor performance is another issue, addressed above.

Now, let’s say you find out about a mistake because another person files a complaint. And let’s say this complaint alleges harassment, discrimination, or other mistreatment. Then you have to investigate, but, again, don’t overreact.

Just because someone complains about a co-worker, it doesn’t always mean they want to sue you. Often, your investigation will reveal a misunderstanding that can be remedied. Other times, you may discover that someone has crossed the line. But even then, it doesn’t necessarily mean they meant to. Where possible, correct the mistake and make sure it doesn’t happen again.

Especially in the harassment context (sexual, racial, age-based, etc.), the potential liability often arises once an employer knows of misconduct and fails to act. But acting doesn’t have to mean firing anyone, or even transferring employees. The investigation may be sufficient.

But if you don’t take a complaint seriously or don’t try to get to the bottom of things, then you create a big target if the unwelcome behavior persists. Yes, this often increases the employer’s legal responsibility for this conduct. More importantly, it increases the likelihood that the complaining employee will go outside your organization to seek redress.

Be prepared for these situations in advance. Read my post on Responding to Employment Discrimination Complaints.

5. Forego Overtime Pay

Overtime is a major compensation issue that many employers, including good employers, get wrong. Yes, it’s nice to have employees who are willing to work as much as you need them to. But if you don’t pay them as required, it can cost you tremendously.

Lawyers representing employees are eager to file lawsuits against employers for failure to pay overtime. Not only can they recover handsomely for their clients. They also receive their fees from the employer if they win. Don’t be a target for these lawyers. Do it right!

The basic rule is that employees who work over 40 hours in a week must be paid overtime at time-and-a-half. Some employees can be exempt, meaning they don’t have to receive overtime pay. And, in some cases, different hour thresholds and payment requirements apply.

Here are some of the common mistakes:

Not accurately recording all hours worked.
Not paying overtime when earned.
Providing “comp time” instead of overtime pay, which isn’t allowed for private employers and has specific limits for public employers.
Improperly classifying an employee as exempt.
Miscalculating the overtime rate.

Remember, in most cases, employees can’t simply agree not to be paid for overtime. The law requires it, so any such agreement probably won’t hold up. If there is a claim in court or with the Department of Labor, then it’s the employer’s burden to show compliance with the law.

Keep in mind that the U.S. Department of Labor is in the process of reviewing its overtime exemption rules.

My Most Important Tip for Good Employers Like You!

There are so many traps in the employment law minefield. And the laws and workplace realities simultaneously change all the time. You need to stay up-to-date on what’s going on if you want to remain one of the good employers out there. My free email newsletter can help you be one of the great ones! Sign up here now!

Employees are critical to the success of your business. But sometimes problem employees cause more trouble than they are worth. In that case, the best decision is to move on.

There are many things to consider when firing problem employees. Here are 5 tips to get you started:

1. Have a Good Reason

Yes, many employees have “at-will” employment. That theoretically means they can be terminated for any reason or no reason at all. However, there are numerous employment discrimination laws that an employee may rely on to contest their termination. Thus, you should definitely have and identify a good reason for firing an employee before you do it.

For problem employees, this shouldn’t be too hard. Good reasons for letting someone go include poor work performance, attendance problems, bad attitude, misconduct, etc. Just make sure you know the answer to the question, “why did you fire me?” before you do it.

That being said, you don’t necessarily have to tell the employee every detail of the decision. Still, you should be prepared to make a general statement about your reasoning. And I mean something more than “it just isn’t working out.” Employees often interpret that vague assertion as a cover up for some improper basis. They may hear “you’re too old,” “we’re tired of accommodating your disability,” or “we really want a man for this job.” You should say enough to make it clear none of those is what you mean. Otherwise, you might find yourself responding to a discrimination complaint.

2. Don’t Leave Room for Debate

When you have made the decision to move on from an employee, tell them and move on. Some employees will refuse to accept the words “we’re letting you go.” They’ll try to debate your assessment of their performance, make excuses for their attendance issues, promise to do better, etc. It’s too late for any of that at this point.

You may find yourself using the exact words, “the decision is final.” That’s fine. Accept that most employees won’t like the decision. They will be emotional in some way. This is not the time to try to have a back-and-forth conversation. Tell them what they need to know–“don’t come back tomorrow,” “we’ll pack up your stuff and deliver it to your home,” “here’s your final pay check”– and send them on their way.

You aren’t being heartless here. You’re trying to end a difficult situation as smoothly as possible. You can and should let them know whom to contact if they have questions. But give them some time to process the news before they ask those questions. “Call tomorrow.” “Call next week.”

3. Cut Off Their Access

Most people, even problem employees, are generally trustworthy. They’re probably not going to try to sabotage your business just because you fired them. But that doesn’t mean you shouldn’t take precautions.

In the termination meeting, you are obviously going to ask for keys, ID cards, access badges, etc. If possible, you want those immediately. If they’re back at the employee’s desk or at home, then you need to address that. Have a checklist. Get everything back as soon as possible. If necessary under the circumstances, you may even have to change some locks.

These days many employees also have electronic access to various company systems. Log-ins, passwords, email, etc. The best practice in most situations is to have someone cut off the employee’s access while they are being told of their termination. That way the employee can’t leave the meeting and still get into company email or documents from his smartphone or laptop from his car, home, etc.

4. Preserve Their Computer

If the employee had a portable company computer, you’ll obviously be wanting that back immediately. Ideally, that would be before they walk out the building. But if it’s at home, then the employee will potentially have the opportunity to access it before returning it. Either way, you should consider whether there may be something on the computer that should be preserved exactly as it was upon return to the company.

You should ask the same question for an employee’s desktop computer in the office. Could it ever be relevant what they did on the computer? Might it support the reasons for their termination? Have they been copying company information to use against you? Or even just are there documents that they have been working on that you’ll need to pick up where they left off?

If there is any reasonable chance that they employee’s computer contents could be critical in some way going forward, you might want to have the hard drive forensically imaged (i.e., perfectly copied). This will preserve the computer exactly as the employee left it. Then you can still use the equipment and the data on it as necessary for the business. But if anything comes up down the road, you can use the backup copy to prove what the employee was doing.

5. Move On from Problem Employees

If there are lessons to learn from the situation that didn’t work out, then learn them. Should you restructure the position? Was the hiring process defective? Do you need to provide more training up front? Could the supervisor(s) be more effective?

At the same time, it could just be the person who didn’t work out. Don’t project their failings on the next person in the job. Also, don’t reduce your standards. Just because the new person is better than the last person (who clearly wasn’t good enough), that doesn’t mean that the new person is meeting your standards.

The next person might not work out either. Once you have had to fire one person in a position, use the experience to know what to look for in the next employee. Start monitoring those things earlier, provide additional training and supervision where warranted, document deficiencies, and make the difficult decision sooner if necessary. Eventually you will find the right person.

Category: Termination

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