Fire Well: How To Avoid Wrongful Termination And Employment Discrimination Lawsuits

by: Robert Sher

dont do it!Most executives who are fired in midsized companies are fired way too late, often after years of damage to the organization.  There are several key reasons the CEO may tolerate dysfunctional leaders and this article focuses on one of them.  The boss fears he’ll create a mess when he swings the sword, with yelling, screaming or tears, followed by anger, blame and wrongful termination and/or employment discrimination lawsuits.

Some leaders—and their lawyers often agree—give absolutely no reason for the termination, figuring there is less “evidence” if proceedings go to court.  Yet humans need some reason to help them understand their rejection. Without it, they tend to affix blame on the company and their imagination can run wild.  Other leaders believe the termination meeting is the time to prove their case that the executive is to blame, listing the wrongdoings which led to the dismissal.  Yet pinning the blame on the executive creates extreme defensiveness, which is likely to escalate into an argument, then into a lawsuit as they attempt to deflect blame onto the company.  But it doesn’t have to be this way.

In a well-executed firing the employee understands the reasons why they and the company are better off separated.  They accept the offer of severance in exchange for a legal release, and move on with their lives and careers, without any legal involvement. To make this happen, certain steps should have been taken:  some counseling leading up to dismissal day and genuine disclosure of the real reasons why the executive no longer fits with the company.  Further, the CEO must respect the departing executive, showing some consideration for their well-being as they transition to a new employer.

Own your anger
First, a word of caution to all leaders who are angry at their executive for poor performance and dysfunction.  Own your anger.  It’s your fault they were hired.  It’s your fault you didn’t hold them accountable in the past.  It’s your fault you didn’t buy them coaching (if it would have helped).   It’s your fault you didn’t fire them a year ago.  The fact that your anger has been building up over time is not their fault—it’s yours.   Don’t express that anger or show it in any way while you’re terminating them, unless you want to punish yourself and your company with a lawsuit.

Coach Coach and counsel
Each employee deserves respect every day they work for you, even when they make mistakes and under perform. The minute an executive starts to stumble, their boss should be there, coaching and counseling them. If they continue failing, they should feel significant pressure to perform and discomfort when they miss the mark. There should be no soft-pedaling the fact that there is a big problem:  that they are not meeting expectations. There should be perfect clarity (in writing) about what they must do differently to become a high performer. Yet through all of this, the leader must never convey disrespect.  Before you give in to the urge to show disrespect, fire them respectfully and move on.  I am a big proponent of repair (quickly) or replace.  Fix or fire.

Termination Day
On the day of dismissal, we can assume that they already know serious problems exist.  The goal is to explain why there is no longer a good fit between the executive and where the business needs to go.  As an example, that reason might be that the executive wants to take their department in a direction that the leader doesn’t want. (Note I’m not saying this direction is wrong; the executive could be right.)  Another reason might be that there is too much arguing, which is harming the corporate culture.  If a new CEO has arrived, they may just be picking their own team.  What is crucial is that it’s neither the employee’s fault nor the company’s.  The reason given doesn’t have to be written down, but it must be voiced.

A market-based severance package should be offered, conditional on a legal release.  Avoid going into the details of the package at the termination meeting, suggesting that they look at it later, on their own.  The dismissal meeting should be short, ideally 15-20 minutes.  The leaders should swing the sword, should look reluctant and sad at having to do it (not like Donald Trump).  They should give a concise reason, then turn the meeting over to someone else — an HR leader ideally — who can explain the termination paperwork and handle logistics.  Encourage the executive to stop thinking about why he’s being dismissed, and focus instead on the paperwork; this process gives everyone a break.  The leader should not exit the room, but should not talk; the HR leader should drive the process from there on.  The dismissal meeting is NOT meant to talk about reasons or to allow the executive to try and change the company’s determination.  The decision was made prior to the meeting, which is chiefly held to communicate the decision to the executive and to get that executive out of the building with their respect intact.

If having security on site seems wise, keep them out of sight — perhaps in an adjacent office — but well within reach. Visible security shows disrespect and mistrust.  You should prepare for the worst, but most of the time if you dismiss executives with respect they will be cooperative.  As the meeting begins, mirror the behavior of the person being dismissed.  If they are professional, you should continue to be professional, perhaps allowing them more time to go back to their office and pack or say goodbye to a few people.  If they become angry or belligerent, you must respond firmly, likely walking them out of the office quickly, if necessary, with security at your side.

Leaders who are the best at firing have these feelings:

1. Regret that they and their company made a bad hire or were unable to fix the problem.
2. Empathy with the executive
3. Faith that there is a good employer out there waiting for the executive (and all executives) and that it is just a matter of finding the right fit.
4. Eagerness to do what they can to help the dismissed executive find a new employer and to be successful in their career. If you suspect it will be difficult for them, buy them an outplacement package or career coach ($4K and up, inexpensive compared to litigation, and it shows you care).

With any high level firing, the leader ought to hold an all-hands meeting and/or issue a press release.  No reason for the dismissal should be given in these public settings, but most employees will already understand the rationale.  Again, show thanks and respect to the dismissed — they will find out everything you said — and make other executives aware that there should be no badmouthing in any setting, or in any medium.  Everyone must act with respect.

I am a big proponent of having legal oversight on executive terminations.  But the leader must run the show, not the lawyer.  The leader must balance the risk of creating the hostility that precipitates a lawsuit versus the risk of creating evidence or admissions in the records that could hurt the chance of winning a legal action.  I’ve always given a little more weight to preventing any legal action by managing the emotions of the person I’m dismissing.  Over a 23 year career as CEO with over 100 firings, my team and I used these principles with great success.  In the past few years, I’ve guided several clients through dicey dismissals using this approach with completely positive outcomes.

Firing well is a powerful skill that takes practice to hone. Find opportunities to witness a master at work then start practicing on lower risk dismissals.   Somebody needs to be good at firing and it might as well be you.  Then you’ll fire on time, avoid lawsuits, and best of all, you’ll make way for better executives.

About the Author

Robert SherRobert Sher, Contributor

I write about how CEOs lead midsized businesses.

Article source: http://www.forbes.com/sites/robertsher/2014/10/20/fire-well-how-to-avoid-wrongful-termination-and-employment-discrimination-lawsuits/

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