Strategic HR: Writing a Strong Termination Letter

Writing a termination letter can be a daunting task when you realize that so much can rise or fall on what it says. A few straightforward strategies can help you prepare a termination letter that provides all the benefits and helps you manage the risks that accompany all termination decisions.terminated

What to Leave in and What to Leave Out

A termination letter is obviously a critical document. It will be scrutinized by the employee. Every word will be parsed by the employee’s lawyer. And, if necessary, jurors will review it during their deliberations to decide whether you proved the legitimate reasons for termination you explained in the letter.

That said, you should view the letter as an opportunity to boldly communicate why termination is the right result under the circumstances. With a few guidelines, you can write termination letters that communicate strength and confidence.

Deliver the News

A termination letter must directly and factually state the reasons for the termination—the purpose and strength of your decision. While the form of that statement may change depending on the situation, it should include a detailed summary of the employee’s conduct or performance that supports the decision. If appropriate, the letter should specifically refer to the company policy the employee violated. Also, to the extent that past disciplinary actions or performance management efforts support the decision, the letter should review those efforts.

When the decision is based on misconduct, the letter should consist of a summary of the employer’s investigation findings:

We have concluded, following our investigation, that your conduct toward other employees on January 16, 2018, violated the company’s antiharassment and discrimination policy. In particular, your display of sexually suggestive photographs in your cubicle and your explicit language in describing those images to others were direct violations of company policy. Also, you received a written warning and additional training on your obligations to avoid such conduct in October 2017.

Some investigations of misconduct require the employer to decide who is telling the truth. When the employee has denied the wrongdoing that supports the termination decision, your statement of the termination reasons should explain why you discounted his version of events:

We understand that you deny posting the offensive photograph, but other witnesses contradicted your denial and informed us during the investigation that you told them about printing the photograph and that you were thinking about putting it on the wall of your cubicle. Also, employees reported seeing the image in your cubicle over the course of several hours, including while you were present.

Performance-based terminations may require a broader explanation:

We have concluded that your performance does not meet the requirements of the technician position. In your 2016 performance appraisal, your supervisor noted that you needed improvement in your technical skills and attention to detail. The company provided you with two additional weeks of task-specific training with a coach during the first quarter of 2017. However, the performance problems continued throughout 2017. Your supervisor gave you three written reminders of the need for performance improvements in 2017 and again noted the need for additional improvement in your 2017 performance appraisal. Since that appraisal, it has become apparent that your job performance simply is not consistent with the requirements of your position.

Again, regardless of the reason for the termination, it’s important to remain focused and factual. Be detailed, but don’t resort to the “shotgun” approach of including every misstep the employee made over the last several years.

It’s sometimes tempting to “pile on” with the employee’s entire history, but some courts have noted that an employee can raise evidence of pretext (a discriminatory cover-up) by attacking the credibility of any of the employer’s reasons if the employer has asserted several reasons to support the decision. Stick to the events and past disciplinary action or performance management that actually contributed to the termination decision, and don’t rely on stale issues to bolster your reasons.

Also, avoid inflammatory characterizations of the employee’s conduct. A statement like “You sexually harassed your coworkers” or “Clocking out late amounts to stealing the company’s money” is likely to motivate rather than discourage legal challenges. Identify the policy or performance expectation the employee violated and how his conduct fell short. Leave out the adverbs and adjectives.

So What?

In situations involving performance problems unique to a particular job or misconduct that may not be understood outside your workplace, it may be necessary to explain the significance of your reasons for the termination by describing the impact on coworkers or the organization. Recall that a termination letter will have several audiences after the employee receives it. Part of the purpose of the letter is to help those audiences understand the decision:

Repeated tardiness, even just a few minutes, and failure to call in before missing a shift cause a ripple effect through the entire production department. One employee being late causes stress for all the others because they have to work faster to catch up so their down-line coworkers have the parts needed to complete their work. Also, delays in production of even a few units per day add up over time and make it more difficult for the entire organization to meet its goals.

The employee may quibble with your description of the impact of her actions, but the support for your statement should be self-evident if you have a policy that defines your expectations and you can relate those expectations to your business needs. Also, connecting the employee’s actions to their impact on coworkers helps balance the bottom-line focus of many termination decisions.

Implement the Termination

Once the reasons are explained, the termination letter should address the administrative details:

  • The letter should note if the employee’s final paycheck is enclosed and, if not, when the paycheck will be mailed or deposited. The letter should explain how much accrued vacation or paid time off will be included in the check.
  • The continuation of insurance benefits is one of the first questions raised by recently terminated employees, so informing the employee of when to expect benefits information and who will send that information may prevent some anxiety and confusion.
  • If the employee has been issued company property, the letter should specifically list the property that must be returned. Don’t forget things like work in progress, intellectual property, software, and data or data storage media that the employee may have transferred to a personal computer or otherwise removed from the work premises.
  • The employee should be notified of the arrangements for returning to his office, workspace, or locker to gather his personal belongings or how you will return personal items, if appropriate.
  • The employee should be reminded of his posttermination obligations under any confidentiality agreements or covenants not to compete.
  • If the company has a grievance procedure, attach a copy of it to the termination letter. If you provide the employee a copy of the grievance procedure within 7 days of his termination, his failure to use the grievance procedure is a complete defense to wrongful discharge.

Avoid Offers of Severance Pay

Employers will often consider an offer of severance pay conditioned on the employee’s willingness to waive all legal claims related to the termination. While you may see such an offer as a matter of compassion or risk management, employees sometimes view a severance offer as a sign of weakness and the amount as an insult.

Because of the potential for mixed messages, we advise employers not to include offers of severance in the termination letter. Once the termination is complete, you can negotiate severance pay from a position of strength.

Bottom Line

Termination letters are the important final step to making and communicating a well-reasoned, defensible termination decision. We encourage you to consult counsel whenever you’re making termination decisions and involve your attorney in reviewing the termination letter. With those safeguards, termination letters can help you strongly promote and defend your decisions, regardless of the audience.

Jason Ritchie, an editor of Montana Employment Law Letter, can be reached at jritchie@ritchiemanning.com.

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