Life Cycle of an Employee:

TerminationOctober 8, 2015

Last but Not Least….

� Today, we will discuss the conclusion of the

life cycle of an employee—termination.

� Whether resignation, RIF, poor performance,

or other reason, employers MUST plan for

employment terminations.

� Our employment professionals are here

today to offer practical, proactive advice.

Documentation

� Previous webinars discussed (among many other

things):

� Importance of documentation.

�Significance of job descriptions.

�Use of performance reviews.

� Documentation is the link between all of the other

topics we have discussed in our past webinars and

the actual employee termination.

Reasons for Termination

� Employees can be separated or terminated from

employment for many reasons:

• reduction in force;

• termination for poor performance;

• termination for misconduct;

• resignation.

� In all of these situations, documentation is essential.

Reduction in Force

� Reasons for RIFs:– Lack of certain types of work or the elimination of a

product or service.

– General lack of work, new efficiencies, acquisitions or sales.

� Selection of employees:– Criteria?

– What does documentation tell the employer?

– Who is performing consistently with the job description?

– Who has the lowest job performance ratings?

Termination for Poor Performance

� More than any other situation, terminations for

poor performance require thorough

documentation over a period of time.

• How does the employee’s performance match

his/her job description?

• Were there previous warnings?

• Were there previous suspensions?

• Was there progressive discipline and was the

employee notified of prior examples of poor

performance that were documented?

Termination for Poor Performance(continued)

• Is the termination consistent with other situations?

• Were other employees terminated for similar poor

performance under similar circumstances?

• Were other employees allowed to continue to work

when their performance was poor?

� Documentation on all of these points is crucial.

Termination for Misconduct

� Some misconduct is so egregious that it may not

require much prior documentation.

� Some types of misconduct may not appear to be

so egregious.

• However, in many situations it may be necessary to

have previous documentation regarding such

conduct.

� Unemployment benefit implications.

Failure to Document

� A terminated employee may argue that the stated reason

for termination was not genuine, but that the termination

was because of a protected classification or activity that

other speakers will review in more detail.

� Only thorough documentation will allow an employer to

demonstrate that the motives were non-discriminatory.

Resignation

� If the employer is pleased, should action have been

taken earlier?

• Supervisors taking easy way out?

• In process of documenting issues?

� If the employer is displeased with the resignation,

why did employer lose a good employee?

• Did employee previously communicate

dissatisfaction?

• Beyond employer control?

Risk Management

� Risk Resolution

• Ensure proper documentation to support termination

in anticipation of a potential claim

• Determine the appropriateness of severance options

(monetary and non-monetary benefits) in exchange

for full release of claims

� Employment Agreements

� At-Will Employment v. Employer/Employee Risk

Factors

Employer Risk Factors

� Lack of documentation to support termination

� Lack of Company Policy supporting

termination/contrary to Company Policy or

documents

� Problematic Company Policies

� Inconsistent treatment with other employees

� Statements/documents contrary to stated reason

for termination

Employee Risk Factors

– Race

– Color

– Gender

– Gender Identity and

Expression

– Sexual Orientation

– National Origin

– Religion

– Age

– Disability

– Pregnancy

– Marital Status

– FMLA Leave

– Genetic Information

– Military Status

Protected Classifications (Generally)

Employee Risk Factors (continued)

� Discrimination/Harassment Complaint

� Whistleblowing

� Filed a Workers Compensation claim/on leave

� Protected leaves of absence (FMLA, ADA)

� Request for Disability Accommodation

� NLRA Section 7 Concerted Activity

� Filed an NLRB charge

� Discrimination Charge filing

� Other Claim Demands

Employee’s Recent Protected Activity?

Risk Management for Different

Types of Terminations

� Reductions in Force (RIF) / Layoffs

• Review Employee Risk Factors for employees

selected for RIF/layoff to identify any unintended

trends

• Confer with managers to determine whether the

stated selection criteria is accurate and applied

even-handedly

• Severance agreement/release – OWBPA Exhibits

Risk Management for Different

Types of Terminations (continued)

� WARN Act – Risk Management:

• Review Federal WARN Act requirements

• Review applicable State requirements (mini-WARN

Acts)

�Employer Coverage thresholds vary

�Exceptions vary (including sale of business)

�Threshold for affected number of employees vary

Termination Meeting Considerations

� Attendees on Behalf of Employer / Employee

� Day and Time Issues

� Location

� Security Concerns

� Disabling access to facility and information systems

� Explanation to remaining employees

Termination Meeting Agenda

� Who terminates?

� Have talking points for employee conducting termination

• Date of separation

• Reasons for separation [RIF / for cause]

• Importance of truthful reason

• If for performance or conduct, articulate disciplinary record

• What not to say or do

• Transition to benefit discussion

Termination Meeting Agenda (continued)

� Explanation of Benefits

• Availability of severance/pay in lieu of notice

• Availability of unemployment compensation

• COBRA and continuing medical coverage

• Other benefits, i.e. PTO payment, retirement, stock

options, expense reimbursement, bonuses, tuition

reimbursement, life insurance, outplacement

services

• Continuing obligations – Confidentiality/Non-

competes/ non-solicitation agreements

Termination Meeting Agenda (continued)

� Employment references

� Retrieval of company property

� How and when will employee be allowed to

retrieve personal items?

� How will employee exit the facility?

Severance and Release Considerations

� Should company pay severance?

� What is reasonable amount?

� Is termination covered by company severance

policy?

� Should a severance and release agreement be

entered?

� Valid release must be in exchange for consideration

to which employee is not otherwise entitled.

Severance and Release Considerations (continued)

� What is employee’s age?

• If 40 or over, 21/45 day consideration period and 7 day

revocation period.

• If under 40, reasonable time to consider.

� Is separation being offered to more than one

employee?

� OWBPA

� Will severance be paid in lump sum or over time?

� Importance of IRS Code 409A provision.

Severance and Release Considerations (continued)

� Other provisions that must be included in

severance and release agreements

� Provisions that should be included

� Provisions that typically are included

Post-Termination Considerations

� Let’s talk about how to protect company property

and manage post-termination claims for those

times when employees aren’t so happy.

• Protection of Intellectual Property

• Alternative Dispute Resolution

• Other Ways to Limit Claims

Protecting IP

� Executed confidentiality/nondisclosure agreement.

� Proactive measures at or before time of

termination to recover property and avoid

sabotage.

� Enforcement of those clear, signed agreements.

• Post-termination reminder letter.

• Cease and desist.

• Litigation.

Alternative Dispute Resolution

� Alternative Dispute Resolution (ADR) is an

alternative to litigation in state and federal courts.

• Mediation

• Arbitration

� Benefits

• Parties control the process and select

mediator/arbitrator.

• Can be less expensive and less formal.

• Process can be quicker.

Alternative Dispute Resolution(continued)

� Benefits (continued)

• Employers have higher success rate.

• Confidentiality.

• No class actions.

� Downsides

• Limited appeal rights.

• Can be as lengthy and expensive as court.

Alternative Dispute Resolution(continued)

� ADR policy or provision must be drafted correctly:

• Formation and consideration.

• Fairness.

• Mutuality.

• Class action waivers must be clear and conspicuous –

and watch out for the NLRB!

• Other statutory requirements.

• Other considerations.

• Consult with counsel.

Other Limitation of Claims

� You have heard a number of ways to limit claims

today, all of which are very important to limiting

claims:• Compliance with company policies.

• Documented reasons for termination.

• Careful evaluation of layoffs and WARN requirements.

• Severance agreements.

• Careful planning of termination meeting.

• Control of post-termination communications by other employees.

• Handling of unemployment claims.

� The key—BE PREPARED!

Contact Information

� Bradley G. Kafka

– bkafka@polsinelli.com

� Elizabeth T. Gross

– egross@polsinelli.com

� Lon R. Williams

– lonwilliams@polsinelli.com

� Judy Yi

– jyi@polsinelli.com

Polsinelli PC

www.polsinelli.com

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