Essentials For Making Sound Termination Decisions

By Bud Holmes

Because most individuals are hired as “at will” employees, many employers believe they are free to make termination decisions without the threat of later being held accountable for their decisions. As most HR Professionals know, however, it’s not that simple.

Over the years, courts have significantly eroded the “at-will employment” doctrine. In addition, federal and state statutes have created various categories of protected employees, specifically prohibiting certain forms of employment discrimination. As a result, the vast majority of all termination decisions are subject to some form of review by outside third parties, including arbitrators, state and federal court judges and juries, and the Equal Employment Opportunity Commission (EEOC).

As a result, it’s important for employers to take great care when making termination decisions, to improve their ability to withstand any subsequent review. This article discusses a few general practices and considerations that will help employers make better termination decisions, i.e., decisions that will appear reasonable and justified in the eyes of those reviewing them in the future.

Prior to making any termination decision, employers should ask these specific questions:

1. Will the termination decision be consistent with company policy?

2. Is the employee in a federally protected category due to his or her race, color, sex, pregnancy, age (40 or over), genetic information, religion, veteran status, disability, national origin, citizenship, etc.?

3. Is there proper documentation for the decision?

4. Were all facts pertinent to the termination decision investigated in a fair and objective manner?

5. Was the employee forewarned of the possible consequences of his or her poor performance or misconduct?

6. How has the company treated employees with similar issues in the past?

7. Have options other than termination been considered?

If the above questions are properly considered prior to making a termination decision, the risk of having an EEOC claim or lawsuit filed regarding the decision should be reduced.

Documents Important to Supporting Termination Decisions

Proper documentation is vital to making sound termination decisions. Recent surveys indicate that juries strongly believe that before an employer terminates an employee, the employee should receive fair warning of the consequences of his or her poor performance or misconduct. Thus, proper documentation of an employee’s work performance and misconduct should be an important factor in making termination decisions that can withstand outside scrutiny from third parties.

Performance Evaluations

Employers need to consistently provide employees with realistic feedback regarding their work performance. When preparing performance evaluations, it is important to be open, honest, and frank, ensuring not to “sugarcoat” poor performance. If performance evaluations are properly prepared, they should provide important documentation necessary to explain and support termination decisions.

Disciplinary Warnings

Effective disciplinary warnings/documents are equally important. Disciplinary warnings/documents should be written in a way that the reasons for the discipline can easily be understood by anyone reading them, including outside third parties. Company rules or policies that have been violated should be specifically identified in the warning/document. Finally, it is important that all disciplinary warnings/documents maintain a professional non-abusive tone.

Job Descriptions

Having well-written, accurate and thorough job descriptions, often provides essential support or justification for a termination decision. This is particularly true when an employee is terminated for poor work performance or being unable to perform his or her job.

Employee Handbooks

Employee handbooks are also extremely helpful, as they typically include important company policies relating to the employer’s expectations concerning employee conduct and work performance. In addition, employee handbooks contain the company’s policies and procedures relating to employee discipline and termination procedures. If these policies and procedures are consistently followed when making termination decisions, they will provide additional support for the employer’s decisions.

Decision Making Process

Prior to making a final decision relating to the termination of an employee, the following steps should be taken:

– Involve human resources and/or an employment attorney

– Get approval/concurrence of at least two managers

– Complete administrative details relating to the final paycheck, termination notice, COBRA, and so forth.

– Decide who should conduct the termination meeting

Termination Meeting

Once the termination decision has been made, a termination meeting should be held with the employee. The proper execution of this meeting is an important step in the termination process and maintaining the appearance of a reasonable and justified termination decision. During the meeting, the person conducting the meeting should:

– be honest

– get directly to the point

– communicate the basis of the termination

– not argue or apologize. Avoid hostility. At all times behave professionally

– not encourage hope that company might change decision

Additionally, when the violation of a specific work rule or company policy is the basis of the termination decision, the work rule or policy violated should be referenced during the meeting. When appropriate, the employee should be shown where the work rule or policy is included in the employee handbook.


There is no one correct way to bulletproof termination decisions, as each situation presents different sets of issues and problems for the employer. When all else fails, remember to always take the time to be thorough, get all the facts, carefully review the employee’s personnel file and review relevant company rules and policies. If the termination decision process follows these basic rules and the general practices described above, it should help reduce the number of EEOC claims or lawsuits filed against a company as the result of its termination decisions.

Charles (“Bud”) V. Holmes, Partner FordHarrison Memphis bholmes@fordharrison .com

Charles (“Bud”) V. Holmes, Partner
FordHarrison Memphis