Terminating Totally with Limited Liability
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Terminating Totally with Limited Liability

In this day and age it is becoming more and more difficult to terminate an employee. It is difficult enough firing someone without having to worry if you’ve taken all the necessary steps and kept all the necessary paperwork in the employee’s file.

By Johnny Duncan

This article will address just some of the main points that should be considered before terminating an employee. Keep in mind that your attorney should review all decisions concerning employment law at both the federal and state levels. The laws vary from state to state and some states (you folks in California know what I’m talking about), have more stringent laws than others. This is only an outline to remind you of steps you can take to protect yourself and your company.

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  • I. Document, document, document
    You should have an employee file for every employee. If you don’t now, make it a priority to get done. There are certain records that can be kept in this file and some that should not be included. For example, all records pertaining to the employee’s medical history (i.e. annual physicals, workers compensation claims, reports of injuries, etc.) are to be kept in a separate file for the employee. Also, the I-9 Forms and anything else that your HR staff and others might see in the employee’s personnel file should be kept in a separate folder.

    Keep all disciplinary documents in the employee’s personnel file. If your employee handbook, contract, or collective bargaining agreement states that you must have a progressive record of discipline before terminating the employee, this file will save you a ton of headaches later on. Make sure that the employee signs all documentation acknowledging receipt of letters and make copies for the employee.

    II. Have witnesses
    If possible, whenever an employee is being disciplined, make sure that you take a witness with you in the office. This is especially true if the employee is your opposite sex. A witness helps you in the event that any false accusations occur. The witness will also act as a second set of ears in case you might miss something being said or are tempted to say something that may come back to bite you.

    It helps to round up witnesses of the infraction if possible. Get statements from other employees and keep those with all disciplinary records. It may be months or years down the road when you will need them and you will be glad that you kept the records on file.

    III. Keep a cool head
    As an owner, manager or human resource practitioner, it is your responsibility to keep a cool head during all communications with employees. Anything that is said in the heat of the moment can be used in defense of the terminated employee.

    If one of your managers insists on firing an employee right then and there, a simple set of questions can stall an action and sometimes usher in more cool-headed thinking. A major prescription for trouble is when the field supervisor calls his boss or human resources in the heat of the battle insisting something must be done now.

    Usually, in emotionally charged employment termination issues, now is not a great time to act, though most plaintiffs’ attorneys love it. Conversely, sometimes an overnight cooling off period will, many times, allow clear thinking to prevail. Use stalling techniques to slow an employment termination down allowing time for tempers to cool and precious time to get the true facts.

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    IV. Review all options
    Sometimes the best thing to do for you and the employee involved is to review every possible option before terminating. Let’s say that the employee is being considered for termination because of poor performance. Is the employee properly trained? Is there another position in the company where the employee may be better suited?

    Some possible terminations have been aborted after it was discovered that the employee can be better utilized elsewhere and that the employee seems happier in the new position anyway. If the employee tries to perform and poor performance is his or her only infraction, then try matching their talents and skills with other positions.

    Perhaps the employee is having difficulty learning to perform certain duties. If there is a disability involved and the company knows about it, handle this employee with care. Make sure that all requirements have been met in reference to complying with ADA regulations.

    Lastly, maybe the employee is experiencing problems at home. Although this is not the job of the employer to worry about, employees are a major part of your business. If one of your machines stopped working or worked sluggishly, you probably would not send it away. The same holds true for your employees. If you can find out, (every business has a grapevine) about the circumstances as to why Joe Worker is falling behind, maybe you can salvage the person.

    You have to make the call, but one of the best ways to create loyalty and improve moral is to lend an ear to the employee and offer time off to get things straighten out. Of course, this is only if you believe the employee is an asset. The time off can be without pay and with restrictions as to how long and what is expected when the employee returns.

    V. Be familiar with federal and state laws
    Education is your friend when it comes to avoiding litigation over employee dismissals. Keep in mind that there is no way you can become an expert in employment law and run your sign business. Leave that to the professionals. With that said, let’s look at resources you can use to at least familiarize yourself with what is right or wrong.

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    Government sites that are very helpful in this case include many. The best resource is to go to the Department of Labor’s http://www.dol.gov site and all the others are linked from there. Also, contact your favorite sign association to see if they can provide you with materials regarding employee termination.

    Again, this is simply to help you become familiar with the various laws so you can better protect yourself. Even with a base knowledge of the laws, much documentation and following the rules as best you can, there is still the possibility that a terminated employee will hire a lawyer and attempt to sue.

    Developing a defense
    Your best defense to avoid litigation from firing an employee is to make sure that you have laid down the ground rules in the beginning, kept records all through the term of employment, and armed yourself with employment law information.

    The ground rules can be set in the form of an employee handbook or an employee contract. Regardless of the size of your company, create an orientation program for all new employees. This can take place in two weeks in some companies and half a day at smaller shops. The point is to provide the new employee with all the rules that your company plays by.

    The new employee can be given your employee handbook, (have them sign for it!), or even a one-sheet form that outlines rules for attendance, sick leave, vacation, etc. The employee is now responsible for this information. In Part II of this series, we will discuss the ingredients of an orientation program including developing an employee handbook.

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