The right way to fire an employee

When Shreveport, La., remodeler Jeb Breithaupt fires someone, the employee is rarely surprised. Even a popular 64-year-old project manager told Breithaupt on the day he got his pink slip after four years at JEB Design/Build: “I knew this was coming.”

The project manager’s reliability had waned, leading unsatisfied homeowners to complain about missed deadlines and punch lists with dozens of unfinished or poorly done tasks. After admonishing him three times in four month, both in meetings and in writing, Breithaupt fired him.

The remodeler doesn’t make his employees guess what they have to do to keep their jobs. He spells it out on the day they’re hired with detailed, written job descriptions that outline what he expects.

“It’s concrete to start with,” says Breithaupt, who also conducts regular performance reviews and documents all performance-related conversations with employees.

Have a paper trail before you fire an employee

Although most states allow employers to fire an employee “at will” for any reason – or for no reason – Chicago attorney Homer Tristan, partner with Tristan & Cervantes, a business services law firm, counsels contracting firms to keep records of poor performance, issue written warnings and fire for cause.

“Create a paper trail,” says Tristan. “If you have a personnel file with nothing in it but the employee’s original paperwork, you don’t have a paper trail to show why the employee was fired. The employee can bring witnesses and examples to court of discriminatory or racial issues, and you’ve got nothing in the file to show that the person was late, didn’t follow directions or didn’t do the safety training by the deadline.

“If you’re not recording that in the personnel file, you put yourself at risk that when you go to court to defend the person’s accusations, the court will say: ‘Where is your evidence that you handled this?’ That’s hard to defend.”

Still, according to William Porter of the Sacramento, California-based Porter Law Group, “at will” means there’s no need to give an employee a reason for the termination. “Once you get into the reasons why, there are grounds for challenging that reason as false or contrived,” says Porter, whose firm specializes in employment and construction law. “It’s easier to defend yourself when you haven’t already stated the reasons for the termination because there’s nothing to challenge.”

Use a written offer

Both attorneys agree that every new hire should receive a written offer letter that makes it clear the employment is “at will” and not guaranteed for a specific time period. Construction business owners can unwittingly void the “at will” provision by using language in the letter that implies an employment contract; that seems to promise continued employment as long as the employee performs well; or that the company cannot fire the new hire without first issuing warnings or evaluating performance.

“At will” doesn’t grant the employer permission to fire someone illegally. Illegal terminations often involve discrimination for race, gender, pregnancy, age over 40, religion, sexual orientation or gender identity, or disability. You may fire employees in those “protected classes,” but not because they’re members of those classes. And you can’t fire an employee for reporting that discrimination.

Employees most often claim discrimination when they observe that a manager penalizes one worker or group for doing something that another colleague or group does without penalty.

“If everyone regularly shows up late,” says Tristan, “and then one person, who is female or over 40 or pregnant is late, and she is fired or disciplined, that could be thrown back in the face of the owner who has not enforced rules in a manner that’s consistent.”

Know employees’ rights

Another practice that can land you in court is firing an employee with poor English-language skills when the worker’s job doesn’t require good English.

In a recent lawsuit, the U.S. Equal Employment Opportunity Commission (EEOC) charged a Wisconsin manufacturer with discrimination based on national origin after the company fired a group of Hmong and Hispanic employees with poor English, even though English was not needed for their jobs and their performance evaluations were satisfactory.

It’s also illegal to fire someone in retaliation for something the employee has the right to do, like complain about legal, health or safety violations on a jobsite; refuse to do work they deem unsafe; or reporting those unsafe conditions to authorities.

And you can’t fire someone for filing a worker’s compensation claim; for taking time off under the Family and Medical Leave Act; or for missing work to vote, serve on jury duty, report for military duty, or attend a court hearing to get a restraining order or to appear as a crime victim.

Create and enforce an employee handbook

Construction firms should have policies for how employees are expected to behave and publish them in an employee handbook. Then they should enforce those policies uniformly.

“Most small companies think they’re too small to need an employee handbook,” says Tristan. “Even if you have only six or seven employees, that’s an error.”

Company policies can deal with everything from work hours to paid and unpaid leave to how to file a complaint to professional decorum, including what kind of language is acceptable on a jobsite.

Tristan says he has dealt with small construction company owners whose all-Hispanic crews relate to each other “like family” and give each other nicknames that they find funny, but that outsiders could construe as racially or personally offensive. When one of the crew gets fired, the employee claims it’s because his colleagues and bosses believe he is fat or dark or whatever his nickname implies. “It’s fun and games until someone gets fired,” says Tristan.

Porter suggests construction firms avoid writing policies that promise an employee will not be terminated until a manager has issued a certain number of warnings or has put the worker on probation for a certain length of time. He advises not to make regular performance evaluations a stated policy.

“The problem is that employers say they’ll give annual reviews, but they don’t get around to it,” he says. “Or they terminate someone but didn’t give them three warnings. The employee can turn around and say, ‘You didn’t give me the warnings and suspension. It can be argued that the employer has violated the standard.”

Still, Porter says leaving such policies out of the handbook doesn’t prevent the employer from giving reviews or issuing warnings. It simply doesn’t require the company to do it.

How to give notice

When you fire an employee, Tristan and Porter say the conversation should be brief and official. “Make it short and sweet,” says Tristan. “You’re not there to apologize; you’re there simply to deliver the message.”

That message, he says, should include a demand for an immediate exit from the premises. He says fired employees who are allowed to stay on for a week or two are often tempted to sabotage the company, trump up a discrimination or harassment charge, or even to get injured and say they were fired because of the injury.

Porter recommends having another manager in the room during a termination, and suggests both managers write down what happened during the meeting. Then keep the reports in the employee’s personnel file.

–By Sharon O’Malley