The process of employee termination is fraught with pitfalls for the unwary employer. Not only can emotions run high during this time, but failure to comply with all applicable state and federal laws can lead to legal liability for your company. One wrong step in this process, even if it is unintentional and made with the employee's best interests in mind, can mean big troubles for an employer. Now more than ever, employers need to make sure they handle the termination of employees the right way.
However, conducting the termination properly is only the first step in protecting the company from liability. In today's increasingly litigious society, employers are required to take additional steps to ensure they are protected from claims by former employees. The best way to achieve this is to enter into a separation agreement with the departing employee. Only by entering into a valid, binding separation agreement where the employee waives his or her rights to sue can an employer sleep well at night knowing the company is protected from exposure. Yet like many aspects of workplace laws and compliance, there is no "one size fits all" separation agreement to cover all scenarios. How much severance is enough? What claims are released? Do I have to give the employee a reference? What if they apply to be rehired? These are all important questions that must be addressed when preparing the separation agreement and tailoring it to fit the circumstances of the termination.
In addition, today's electronic and digitized workplace makes it easier than ever for disgruntled employees to walk out the door with your valuable confidential information. Unless steps are taken at or before the termination stage, your company's most valuable assets can walk right out the door with the terminated employee.