The Law @ Work

Do Employers Have to Give a Reason for Terminating an Employee?

by Erica E. Flores

Terminating an employee is never a pleasant experience.  No matter how well-deserved, termination strips an employee of income and benefits for an indeterminate period of time, creating financial stress that can fray relationships, impact children, and have health consequences.  Paying for heat when temperatures are below zero is a lot harder without a steady paycheck.  So it is understandable that employers might look for ways to soften the blow of termination.  Some offer severance, some continue salary and benefits for a while, some offer not to oppose an application for unemployment, and some even downplay the employee’s role in the termination.  These gestures make us feel good about ourselves, help us sleep better at night, and keep a glimmer of humanity alive in an increasingly ugly world.  But do employers have to tell employees why they are being terminated?  In our opinion, the right question is not what employers must do, but what they should do.

Some states do require employers to tell employees why they are being fired.  But even in states where employers aren’t required to give a reason for termination (like Massachusetts), employers should never leave an employee wondering why they no longer have a job.  Saying things like “we’ve decided to let you go” or “we no longer have need of your services” tells the employee nothing about the basis for the decision, inviting the employee to think back on past events and conversations, to reflect on workplace relationships, and to make comparisons to other employees.  Combined with the shock and ensuing stress of the termination itself, those kinds of thoughts could lead the former employee to assume that discrimination or some other unlawful reason was behind the decision, which leads them to consult with an attorney, which ultimately leads them to file an avoidable charge or lawsuit.  Accordingly, employers should always give a terminated employee a substantive reason for the decision to separate, and that reason should always be the real reason.

Imagine a decent, hard-working, middle-aged employee, with a disabled husband and two young children.  She works a clerical job, earns about $45,000, and relies on her job for affordable medical benefits.  The problem?  She stinks.  She misses deadlines, forgets to relay messages, mixes up files, has terrible grammar and is regularly late to work.  Now imagine that you are her supervisor.  You have tried repeatedly to help her improve.  She has been counseled, patiently and repeatedly.  She has been given verbal warnings, written warnings and performance improvement plans.  She apologizes profusely, blames stress at home, and promises to get better.  And she does, for a little while, until she slides backward and the cycle repeats itself.  Finally, after two years on this painful merry-go-round, you have decided you have to let her go.  You feel awful about it, because you are a decent human being and you know how hard this decision will make things for her, but the work isn’t getting done properly and it is becoming a real problem.

So after putting it off and putting it off, you sit her down and very gently tell her that the higher-ups are restructuring your department and have decided to eliminate her position.  Of course, it isn’t true – you will be filling her position as soon as possible – but you don’t want to kick her when she’s down.  And when the Department of Unemployment Assistance sends you a request for information, you cheerfully continue your ruse, and tell the DUA that she was laid off.  It’s just a little white lie, right?  She would probably have qualified for unemployment anyway, and it makes you feel so much better knowing that she will be able to collect while she is looking for a new job.

The problem?  After a few weeks, you fill the vacant clerical position.  Your new employee is fresh out of college, single and eager to please.  She is working out just smashingly.  Things could not be going better . . . until you receive a copy of a charge of discrimination that was recently filed by your former employee with the Massachusetts Commission Against Discrimination.  She has gotten wind of her replacement, and is now claiming that your story about the restructuring was false and a pretext for age and associational disability discrimination.  Worse, you learn that the DUA has launched an investigation, alleging that you knowingly made false statements that may have resulted in the erroneous payment of unemployment benefits.

They say nice guys finish last.  In this situation, it is absolutely the truth.  Misrepresenting the reason or reasons for an employee’s termination, whether to the employee herself, to any branch of government or to anyone else, is never a good idea, no matter how good the intentions behind doing so.  You put yourself and your company at risk not only of civil liability, but also the myriad harms associated with a governmental investigation.  The do-gooder warm and fuzzies you get from sparing the employee’s ego and ensuring that they will receive unemployment are just not worth it.

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