Laying the Legal Groundwork: How & When to Fire Someone

Red clippers pruning a brance

In the worst case scenario, being fired is shocking, distressing, and hurtful. In the best case scenario, it’s a relief. However, more often than not, the experience is an emotional one. This mix of intense emotions makes firing someone difficult and awkward.

But, it’s something startup founders and small business owners might have to do at some point in their career.

An employee’s performance might not always meet your established expectations, producing low quality work or lacking the skill necessary to complete their work. Or, they might break a company policy, behaving unethically or being excessively absent.

Learning how and when to let an employee go can make potentially challenging or awkward situations go over more smoothly, for both you and the employee.

Having to fire someone doesn’t always have to be completely negative. If you are firing the person for the right reasons, it can provide a learning experience for them and allow them to reflect on what happened. Oftentimes firing means that expectations were not met or that you hired a person that didn’t suit your needs.

In this article, we’ll review how and when to fire an employee (for the right reasons).

Accountability is Important

Sometimes when you are letting a team member go, they simply weren’t capable of doing what you needed them to do.

Their poor performance never improved, and you weren’t able to provide them with the resources or training to sufficiently do their job via a performance improvement plan. Most likely, you’ve already provided written warnings. Despite the efforts, it’s just not working out. The accountability is not there.

Other times it might not have to do with performance issues. A person may not have been managed properly or not given proper instructions on how to complete their job. Perhaps you hired someone whose skills you thought were going to be invaluable, but later turned out to not need those skills when your product or service shifted paths.

An important part of the firing process is stopping and parsing the information that you have in regard to what happened. If you didn’t end up with the right person, go back and speak with the people they interviewed with and what their references said about them. Were there any signs that they weren’t going to be a good fit?

Being thorough with the references provided at application can help mitigate many issues down the road. Setting expectations during the interview process can also prevent some of these problems. 

The worst thing you can do after firing someone is to not spend the time to look into the causes of the issue and address what can be fixed to prevent further incidents.

Hire Slow, Fire Fast

Taking your time bringing on employees is almost always beneficial.

Providing opportunities for interviewees to speak with employees allows them to get a better insight into what you do and if they are a fit, while also allowing your employees to get a feel for who they may end up working with and allowing them to bring up concerns they may have with potential hires. 

Firing for any sort of malfeasance should be a one-strike policy. Whether it is theft, fraud, damage of company property, harassment, or anything else, you should fire the individual causing the problem immediately.

Trying to change the people that you bring on in your limited free time is not feasible or advisable, and can lead to a strained work environment. It is better to hire slowly, finding great people who you can thoroughly vet, rather than try to change the habits and idiosyncrasies of someone who doesn’t quite fit the bill. 

The Legal Steps You Must Take

When firing someone, it’s extremely important that you do so legally, adhering to your state’s employment laws as well as federal laws. It is probably obvious, but you want to avoid any wrongful termination.

If you work in a state that has “at will work,” you do not need to provide a reason for firing them. However, if the employee is under contract, you’ll have to adhere to the employment contract’s terms when considering termination.

Furthermore, there are some exceptions to at will employment that you should be aware of, including just cause, discrimination, and public policy. This article on how to legally fire an employee does a good job of explaining the exceptions, as well as the steps you’ll need to take to legally fire employees.

Now, performance aside, if you find an employee committing ethical or company policy violations, fire them quickly and directly. If you wish to do so, offer the option of giving them severance and an immediate resignation or the option of being fired with no severance and being escorted out of the building.

It is also recommended to pair this with a release of any potential employment-related claims, especially in the cases where severance or unemployment benefits are offered, where requiring the release to be signed before payment makes good sense. Terminated employees will typically pick the severance, as few would choose to be fired instead.

That said, the legality of firing someone is typically handled by a human resources manager, who will be present and play a large role in the termination meeting.

If you already have an established HR department, you won’t have to be as involved in the legal process of letting someone go.

However, if it’s just you, you might have to consult with an HR consultant or legal representative to make sure you’re not firing an employee unlawfully and without proper documentation.

Wrapping Up

Employee termination is a tough topic, and can lead to legal issues if you’re firing people for no good reason. But, at the end of the day, it’s something that many founders have to deal with at some point or another.

That said, if you have doubts about someone in your company—their performance is consistently poor, they’ve proven to be a problem employee—it might be best to fire them.

While gut feelings aren’t always correct, they often are good indicators that something is wrong. If a person has multiple people in the company feeling like they aren’t a good fit then you should also likely get rid of them.

Additionally, knowing how to create a smooth termination process will help you and your former employee part ways on good terms, hopefully.

As long as you are learning from your mistakes and being fair, hiring slowly and firing quickly is the correct way to keep your company on course for success and your employees happy and productive.

These articles are designed to be informational and do not represent legal advice. Before making any legal or financial business decisions, you should consult with a professional who can advise you based on your situation.