Discipline and Termination for Small Businesses

Yes, you should have a policy in your handbook stating that you reserve the right to discipline employees at your discretion up to and including termination.

Such a policy will go a long way in helping reduce the risk of litigation and can form the core of more elaborate termination procedures governing both voluntary termination and involuntary termination.

In case of a voluntary termination, a termination policy can provide the necessary information an employee needs to obtain benefits and tie up any loose ends.

Involuntary termination can take either of these two forms: Reduction in Force (RIF) or Disciplinary Termination. Both tend to be associated with negative emotions. A documented termination policy can reduce the probability of conflict.

Yes, it is always safest to have an attorney’s advice.

In the real world, many businesses do not contact an attorney every time they terminate someone. It can backfire. In 2016, the Pennsylvania Superior Court sided with an employee who had repeatedly refused to work overtime. She was paid $121,869.93 in damages, and her employer had to reinstate her into her former position.

Such scenarios can be avoided if an employer consults a lawyer before proceeding with termination. In our case, when clients ask us if they can terminate an employee, we look at the offer letter, handbook, and performance documentation to help them make the call. We advise that it is always best to run it by an attorney, and if it’s a situation that could be particularly risky (such as issues involving discrimination, social media, etc.), we strongly suggest they obtain guidance and provide a severance agreement to the employee.

All states fall under the employment-at-will doctrine, which means unless you have a contract with the employee stipulating otherwise, you can terminate an employee at any time, for any reason, with or without notice or cause. There are exceptions, of course.

You cannot terminate someone in these scenarios:

1. You do not like your employee’s age, national origin, sexual orientation, gender, or marital status
2. Your employee is a specially-abled individual
3. Your employee served in the military
4. Your employee participates in an investigation related to discrimination or reports a legal violation
5. Your employee avails his or her right to take time-off

This list is not exhaustive. There may be additional exceptions, depending on the state you are in. The safest course of action will be to consult an HR firm and adopt sound termination practices to avoid common pitfalls.

Yes, we will conduct the termination with the employee’s manager or other company representative present. We can also coach your team on how to conduct the termination themselves if you prefer to handle internally.

No, separation agreements, or severance agreements, need to be drafted by an employment attorney (we know plenty we can recommend who do a great job with this). The agreements can vary by state, an employee’s age, and the reason for separation, and if not written correctly, can easily be invalidated by a court of law.