How to Protect Yourself When You Fire Someone

As a business owner, there are times when you just need to say goodbye to an employee. Most entrepreneurs don't enjoy firing people, but it can be a necessary part of the job. I'm not talking about laying someone off due to economic pressures, either. Sometimes you need to fire an employee for their performance.

Even when you have legitimate reason to fire someone, you need to make sure that you follow proper procedure and that you protect yourself. If you don't fire someone the “right” way, you could end up in legal hot water, the defendant in a wrongful termination suit, or embroiled in some other legal action.

Offer a Warning

When firing someone due to his or her performance, you should offer a warning first. As part of the review process, let the employee know that he or she is not performing up to snuff, and that their job is on the line. If you give the employee four to six weeks, and noticeable improvement isn't made, then you can consider firing him or her. As long as the termination is part of the regular review process, it won't be much of a surprise when the news comes — and the employee will have less to reproach you with.

Back Up Your Decision

As an entrepreneur, you might be used to makin gut decisions and taking a chance — even before all the data is in. Before you fire someone, though, you need to make sure that you can back up your choice with data. Document warnings given, and save performance reviews. In some situations, it makes sense to evaluate based on sales goals, productivity, and other more objective measures. Keep track of this information so it can be used to validate the decision to fire.

Take Precautions when Presenting the News

Now that you have given the employee a chance to improve, and you have evidence that supports your decision, it's time to do the deed. When you decide to fire someone, you should follow these steps:

1. Find a private space: Do not fire someone in a public area. Not only can the former employee come back and accuse you of humiliating them in front of co-workers, but a scene is something you want to avoid. Go into an office or conference room to take care of the situation.
2. Have someone else present: Never make a firing alone. Make sure you have at least one other person in the room, preferably a human resources representative (if possible) or maybe someone who can act as security. Make sure you have witnesses, and, if applicable, record the meeting and/or take good notes.
3. Be honest, yet compassionate: Don't lie about why the employee is being fired. Try to be compassionate, but also be straightforward about the situation. Don't let the situation turn into a discussion, either. Avoid talking too much, and trying to justify yourself. Keep it short and simple. “We've discussed your performance, and this job just doesn't seem to be working out. We're letting you go.” Emphasize that the decision has been made.
4. Provide important information: You need to make sure that you let the now-former employee know what his or her options are. Let him or her know about severance packages (if applicable), career counseling possibilities, and COBRA information. If you have offered any sort of benefits, you need to address those items, including retirement accounts.

Don't encourage the employee to gather up his or her things immediately. Instead, let him or her leave, and then come back at a scheduled time to pick up items under supervision. Many bosses prefer to fire their employees at the end of the day, when there are fewer co-workers about.

Carefully consider your options, and consider consulting with an employment attorney prior to issuing a pink slip.