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How You Fire Someone Matters
Editor's Note
How You Fire Someone Matters
My friend, Jay Shepherd, already wrote the book on how to get terminations right. It's called Firing at Will (An Unlawyerly Handbook for Management's Riskiest HR Decision). I highly recommend it to managers, HR, lawyers, executives, and anyone who deals with terminations of employment.
The way we handle terminations could not be worse. So please read Jay's book. He walks you through the hows, the whys, and the what ifs from a pragmatic, kind, sensible, and legal perspective. He is also a marvelous writer. I promise you will laugh. (I do not get paid to say any of this. And it's been too long since I caught up with Jay.)
While you are waiting for the book, here's some of my advice on terminations.
1. Terminations happen
When humans realize things aren't working in a relationship, we fix it, do nothing, or make it much worse so we can rationalize ending the relationship.
If you think I'm going to suggest that we need to do better at fixing relationships, I'm not. I don't think any of the options above are effective. In fact, each of them can be damaging—in its own special way.
The trouble with trying to fix relationships is that it takes intention, time, and effort. Unless the relationship is really important to us, we don't even try to fix our relationships. We just move on. And that's okay.
Our time and attention are limited, nonrenewable resources. It's essential to spend them on the relationships that matter to our lives and our work. And that looks different at different times in our lives.
Doing nothing doesn't solve anything and just buries the problems until something bad enough to end the relationship happens. In the meantime, nothing is really working well and everybody knows it.
This is why people often decide to make things worse faster. They see the inevitability of the outcome but have done nothing so far. So they set the person up and start exaggerating the significance of past issues, blame the employee and demand things change, then go through the painful motions of pretending like there is a chance to improve the situation.
Don't do this. Once you know it's not working, create an exit plan that will work for everyone, which brings me to the second point.
2. Fire fast
The biggest problem with terminating employees is that we wait until it's too late. This is a disservice to everyone involved. The employee has to go through being set up for termination while usually being kept in the dark.
Then the team—the people you're keeping— has to watch it happen, is often asked to take sides, wonders if they are next, then has to pick up the slack when the person finally leaves.
The employer has months of productivity and engagement issues, usually followed by retention issues. When the employer handles the situation poorly and the team suffers as a result, great people start leaving. Why would they stay?
Once you know it isn't the right person for the role, let them go and find the right one.
3. Own your part in it
Terminations are always caused by the employer. Except in cases of egregious misconduct (which are often the culmination of a whole lot of doing nothing by the employer), the decision to fire someone is entirely the employer's decision.
The employer also spent significant time and resources hiring this person and presumably, training them and providing them with the resources they need to succeed. (You'd be surprised how often this is not true. Well, maybe not too surprised.)
Employees generally don't fail on their own. If it's not working, the employer has to own at least some of the responsibility. And the employer is the one who can do something about it.
4. Offer severance
When firing someone is the right decision, make it happen as soon as you know, don't blame the employee, own your part in it, and pay severance.
Even when there are performance or behavior issues on the employee's part, it's often smarter, cheaper, lower risk, and wiser to offer severance pay in exchange for a complete release of claims.
Everyone walks away with an agreement they can live with. The employer has eliminated the risk of claims down the line. The employee has some pay and time to find the next role where they will be appreciated and happier.
Here's more on the legal risks of doing nothing then trying to blame employees for their termination.
- Heather Bussing
Terminating an employee can be one of the most consequential decisions an employer can make. The best way to mitigate risk? Honesty.
While employers generally have wide discretion to terminate at-will employees—this discretion is not without limits. A critical legal risk arises when the real reason for termination is concealed or poorly communicated. This can lead to a finding of “pretext.”
What Is Pretext?
Pretext is a false reason given for an adverse employment action (like termination). While sometimes the fake reason is intended to cover up the real, unlawful reason—such as discrimination based on race, gender, age, disability, or retaliation for protected activity; more often, the fake reason is provided to spare the employee’s feelings, avoid providing negative feedback, or because it seems like the easier approach. Not only is a failure to provide accurate feedback a disservice to employees, it creates significant risk if the termination is challenged.
Under the McDonnell Douglas burden-shifting framework, once a plaintiff establishes a prima facie case of discrimination, the burden shifts to the employer to articulate a legitimate, non-discriminatory reason for the termination (McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973)). If that reason is proven to be false or unworthy of credence, the finder of fact may infer that discrimination was the true motive.
Why Honest Feedback Matters
- Prevents surprises that invite litigation
Employees who receive little to no feedback about performance issues are more likely to view a termination as unfair or discriminatory. Even modest efforts to document concerns and provide coaching can dramatically reduce the perception of injustice. - Builds credibility in litigation
Consistent, contemporaneous documentation—including performance reviews, written warnings, emails to yourself, and meeting notes—strengthens the employer’s credibility in court. If an employer claims “performance” was the issue but has no prior documentation or feedback to support it, it opens the door for a jury to find pretext. - Deters juror sympathy and punitive damages
Juries are far less likely to award punitive damages or high emotional distress damages when they see that an employer acted fairly, transparently, and gave the employee an opportunity to improve.
Best Practices to Avoid Pretext Claims
- Provide clear and honest feedback early and often
Avoid sugarcoating performance issues. Use objective language and provide measurable goals for improvement. Keep a written record. - Document the decision-making process
Keep internal notes or memos that detail the reasons for termination, who was involved in the decision, and what alternatives were considered. Courts closely scrutinize whether similarly situated employees were treated differently. The easiest way to do this is to send yourself an email: it is date and time stamped. - Be consistent
Avoid giving different explanations to different audiences (e.g., saying “budgetary reasons” to the employee but “performance” to others). Any inconsistency can be fatal to the defense. - Follow policies and apply them equally
Deviation from established procedures—like skipping steps in a progressive discipline policy—can be cited as evidence of pretext unless clearly justified. Review your policies to ensure progressive discipline is not mandatory. - Train your supervisors
Supervisors should be trained on how to provide effective and lawful feedback. Often times, employees who lack experience or who are not comfortable providing feedback are promoted into supervisory roles. They need to understand that honest feedback is a gift to employees, provides employees with an opportunity to improve, and that failure to provide the same is unfair to the employee and the company. HR should also be on the lookout for potential evaluation inflation. - Hold a separation meeting with documentation
At the time of termination, provide a clear, factual explanation that aligns with prior feedback. A signed termination memo or exit interview notes can be helpful if litigation arises later.
Conclusion
While it may not be easy, being honest with employees about performance issues and reasons for termination is not just good practice—it’s an essential legal safeguard. Employers who avoid difficult conversations may find themselves defending against expensive and reputation-damaging lawsuits; the cost of being candid is far lower than the price of being accused of pretext.
