Saying Goodbye to an Employee

Dear Erin,

So, as you know, that person is no longer with our organization. It is no fun when an employee on the team isn’t working out. It’s also complicated. And, while it is time for us to past this unfortunate incident at work, while all of this is fresh in my mind, I figured I’d write it down, just in case you ever find yourself needing the information.

Firing an independent contractor is something you can do when the person or company is not meeting the terms of the “statement of work” (SOW) that you should have in place before you start. Similarly. As a contractor yourself, the person who hired you to dance should provide you a contract with a clear expectation of time, product, service, dates and payment. The choreographer cannot change the dance cast in the middle of rehearsals on a whim and “fire” you and not pay you what is in the contract if you have that contract in hand.

But today I’m focusing on employees. And, for anyone who might stumble on this blog, I am NOT an attorney and laws vary by state. If you need representation and definitive information, look elsewhere. This is simply an overview of what I picked up over the years and my understanding of how it all works.

First of all, AT WILL. Almost every state is an “at will” state, meaning you can quit and they can fire you at any time for no reason. Exception: you cannot be fired for illegal reasons, like discrimination or retaliation for whistle-blowing. If you are in a union or working in the public sector, you may have a contract that says there needs to be just cause for firing you, but for the majority of us, that is not the case.

If you quit your job, you cannot get unemployment benefits unless you quit because you can prove some hazardous work condition. Unemployment is for people who lose work through no fault of their own, not because you don’t like your job anymore.

If you are fired, with no reason given, you likely can file for unemployment. Unemployment benefits are paid when an employee is out of work through no fault of their own. It is important to note that unemployment benefits are a form of insurance, paid by the employer. Unemployment benefits are not just some payout from the government akin to welfare or public aid. It’s more like social security - payments are made along the way so that you can receive the benefit. Unemployment insurance is paid be the employer and should employees file for unemployment benefits, the employer will have to pay more, kind of like car insurance. If you get in an accident, your future insurance premiums increase.

That’s important, because many employers would prefer that you do NOT collect unemployment benefits to save the employer money. The employer can file an appeal to get your benefits cancelled. However, the burden is on the employer to prove that the employee was fired for misconduct or illegal activity (theft, harassment, created a dangerous workplace). The definition of misconduct can vary by state but regardless, the employer is going to need some sound written documentation in place to prove that the employee was written up, given a warning, got the right training, etc. and still willfully acted in a way that harmed the employer.

“Wrongful termination” is something else - it means your employer fired you for an illegal reason. In this case, you may be able to sue your employer. But know that “illegal reason” almost always means discrimination for race, gender, religion or other protected class or means retaliation for getting the employer in trouble. Can your employer fire you if s/he just doesn’t like you? Yes. Will you win if you sue? Probably not. But you can collect unemployment because your have lost your job through no fault of your own and your employer cannot prove misconduct.

Now, if you have an employment contract, which TBH is rare, the contract may say that you can only be fired for “just cause.” In that case, “your employer just doesn’t like you” is NOT just cause, and you might have a lawsuit. Depends on your contract. A similar situation may arise if your employer has an employee handbook which outlines termination procedures. If, for example, the handbook says that before being fired, you will be given an oral warning with 30 days to fix whatever problem has been identified and then a written warming and other 30 days to remediate, then your employer cannot legally fire you without going through that 60 days process. Not all employers have employee handbooks; if yours does, read it carefully. If you are writing one of your own, be careful what you write and be prepared to follow it.

Summary: in most cases you can quit at any time and be fired at any time. In most cases, if you quit, you cannot collect unemployment. If you were fired, you can, unless you were doing something illegal or if your employer can prove misconduct. In most cases, it is going to be hard to sue your employer unless you were discriminated against, fired for whistle-blowing or reporting unsafe conditions, or let go in violation of the employer’s own policies and procedures.

Fired vs laid off: what’s the difference?

Fired means the employer tells you to go, with or without reason. Possibly you did something wrong. “Laid off” means the employer is downsizing and it is not your fault. Perhaps the company doesn’t need your position anymore, or is changing your position or has three people in your position and only needs one. Usually it means there is an organizational change that means fewer, or different, people are required to move forward. You can most certainly apply for unemployment benefits if you are laid off.

Since, as we said above, in most cases you can still get benefits, does it matter? Well, getting fired typically has negative connotations and can mar your employment record and reputation. You don’t want a future employer calling your past employer and hearing, “yeah, we had to fire her” especially since often they won’t give a reason or let you tell your side of the story. It just looks bad and it hangs out there. But, if your future employer calls the past employer and hears, “yes, unfortunately, we had to lay off that whole division,” then that leaves you pretty much blameless in the whole affair and much more likely to find a new position easily.

As an employer, you cannot lay off someone and then hire someone new into exactly the same position. That leaves you liable for a lawsuit, especially if you have violated your employment policies or let go someone in a protected class and replaced that person with someone who leaves you open to discrimination accusations. For example, don’t let go an older employee and replace them with a significantly younger employee and call that a “lay off.” Not a good look. Leaves you exposed legally (not to mention just bad).

But, speaking of “looks,” often an employer will negotiate a departure with an employee who isn’t working out as a sign of goodwill. Specifically, the employee will be “laid off” and maybe even given a severance package to soften the landing even if the issue is more about the employee’s fit for the job. Firing someone is never nice, and if it is possible to set the employee up for future success elsewhere by letting them save face as they go, that could be better for all in the long run. It does come at some financial cost to the employer, but may provide value in terms of brand and reputation, especially in a community setting. However, the employer still will need to do some organizational restructuring for it to legitimately count as a “lay off.”

I mentioned severance agreements. Someone also brought up the notion of “two week notice” earlier this week. Neither are required by law. You can be fired today and told to pack up and go home and that’s it. You’ll get paid for today and that’s the end of it. “Two weeks notice” is a thing from previous eras, I believe. But maybe some people still do it. That means that you are told today that you are fired but you will be paid for another two weeks. I suppose that is the flip side of the professional expectation that you give an employer two weeks notice before you quit. Legally, you don’t have to… but it is the professional thing to do. Don’t expect a good reference if you walk out with no notice. Similarly, an employer can be a kinder, gentler entity by giving two weeks (or more) additional pay, regardless of whether you are sent home the day you are fired and asked to stay on for two weeks to transition out, finish a few things, pass on the passwords, etc.

A severance payment is something on top of the two weeks notice. In a severance pay situation, your employer gives you a lump sum at any amount the employer decides, again to soften the blow of losing your job. Firing almost never comes with severance; getting laid off often comes with severance, but not always. Similarly, your health and other benefits stop on the day you are fired. In some situations, the employer may provide health benefits until the end of the month. If you are getting benefits through your employer and you lose your job, you can usually get COBRA (that’s some acronym, I forget what it means) which is the same health insurance you had, but now you have to pay 100% of it instead of the employer sharing in the cost. That one you are going to have to look up. I don’t know if COBRA is the same deal if you quit, get fired or get laid off.

One last thing and I’m done. However and whenever you leave your job, by law you must be paid for any accrued paid time off or vacation that your earned but did not take. That should be paid out in the last paycheck you receive from the employer. Pro tip: make sure you know how many hours you are owed and that the employer pays it. Employer systems aren’t always the best at tracking that, especially in small organizations.

Labor laws: it’s complicated, and it varies by state. The bottom line here is that if you quit, it’s on you. If you get fired or laid off, you can probably collect unemployment. If you weren’t doing a very good job, your employer might appeal your right to receive benefits but to do so successfully, the employer will need rigorous proof of misconduct. If you feel like you’ve been treated unfairly and want to sue, know that it’s hard to win the lawsuit unless your employer acted illegally or counter to its own internal policies. However, employers are still very much afraid that you will sue them, so there is often lots of paperwork involved in your termination that they are going to want you to sign, especially when you are with a professional organization. Read it before signing. And, when you are the employer, get your ducks in a row in terms of employee handbooks and policies to limit the likelihood that a misstep can lead to a lawsuit against you.

That’s all I got. It’s been a long week. I’ll call you this weekend.

Love, Mom