Employment Separation: A Compliance Centric Approach

Thomas Fox - Compliance Evangelist

Thomas Fox - Compliance Evangelist


Welcome back to our blog series on building a more effective compliance program! In today’s episode, we dive into the challenges compliance professionals face when dealing with employment separation, layoffs, and managing whistleblower allegations. We’ll explore practical advice and data-driven insights to help you navigate these complex situations. So, let’s get started! While compliance practitioners may be thinking about these issues, HR professionals may not be fully aware of their significance. By working together, compliance and HR can ensure that exit interviews are conducted with the necessary guidance and attention to compliance-related matters.

One key aspect is the importance of collaboration between the compliance, legal, and HR departments. By working together, you can identify high-risk employees who may be subject to layoffs. This proactive approach allows you to plan ahead and ensure that all compliance requirements are met during the separation process. To further strengthen your compliance program, consider involving a compliance professional in the exit interview process. This individual can ask detailed questions and emphasize the importance of compliance and ethical conduct. By doing so, you create an opportunity to address any potential concerns or ethical issues before they escalate.

Exit interviews serve as a goldmine of information for improving your compliance program. By asking detailed questions about what works, what doesn’t work, and what the employee would like to see, you gain valuable insights into the organization’s strengths and weaknesses. This unfiltered environment allows departing employees to freely share their thoughts, providing a unique perspective that may not have been voiced during their tenure.

During exit interviews, it is essential to ask probing and insightful questions specifically related to compliance. This helps uncover any compliance issues that may have contributed to the employee’s departure and identifies areas for improvement. By understanding the employee’s role, the structure of their business unit, and their supervisors, you can tailor questions to gather the most relevant and actionable information.

When planning layoffs, it’s crucial to consider the impact on hotlines, whistleblower reports, and retaliation claims. Data mining the hotline for employees who have reported violations and promptly investigating those allegations is essential. By demonstrating that layoffs are part of a consistent and fairly applied employee separation program, you can mitigate the risk of retaliation claims.

Treating departing employees with dignity and respect is not only the right thing to do but also essential for maintaining a positive compliance culture. Rushing employees out the door without consideration can increase the risk of retaliation claims or whistleblowing. Instead, take the time to listen to their concerns, answer their questions, and provide information on employment separation issues and state unemployment law. Offering assistance in finding future employment can also help ease the transition.


Treating departing employees with dignity can also turn them into powerful advocates for your organization. In today’s highly mobilized social media world, compliance ambassadors play a crucial role in defending your organization’s reputation and recommending it to potential employees. These ambassadors can also help communicate with stakeholders, third parties, customers, local communities, board of directors, and shareholders, reinforcing your commitment to compliance.

Compliance ambassadors can be a powerful tool when regulators come knocking. Their firsthand experiences and insights can provide additional resources and support in navigating regulatory challenges. By leveraging the knowledge gained from exit interviews, organizations can better prepare for compliance audits and demonstrate a proactive approach to regulatory compliance.

Separation documents must meet Securities and Exchange Commission (SEC) requirements regarding disclosures on whistleblowing and reporting to authorities. Failure to include language specifying that employees can go to authorities has resulted in major fines against US corporations by the. Ensure that your separation documents comply with these SEC requirements to protect both the company and the departing employee.

In conclusion, a comprehensive and respectful approach to employment separation and managing whistleblower allegations is crucial for maintaining an effective compliance program. By collaborating with HR, involving compliance professionals in exit interviews, addressing whistleblower reports and retaliation claims, valuing departing employees, and ensuring SEC-compliant separation documents, you can mitigate risks and foster a culture of compliance within your organization. Failing to plan for this eventuality may result in the ex-employee being uncooperative with the company or government. By considering the potential value of a laid-off employee, you can better prepare for these situations.


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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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Thomas Fox - Compliance Evangelist

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