Executive Summary: Employers in New York should take several key steps before terminating an employee, including documenting performance issues, reviewing internal policies, avoiding potential discrimination claims, and conducting the termination meeting professionally. These actions reduce the risk of legal disputes and help protect the business.
Letting someone go is never easy, but doing it the wrong way can land your business in court or cause an investigation with the Federal or State Department of Labor. Terminations often trigger lawsuits, and even when the employer is in the right, legal defense costs time and money. According to a study by Hiscox, the average cost of defending and settling an employment claim in the U.S. is $160,000. It’s worth getting this part of your operations right.
Whether the reason for termination is performance, conduct, or restructuring, employers need to treat the process carefully. Here’s a practical checklist to help avoid the common legal pitfalls.
1. Document Performance and Conduct Issues
Termination should never come as a surprise to the employee, especially if the reason is poor performance or misconduct. If you haven’t been documenting issues along the way, your justification can be harder to defend. Keep detailed records of:
- Verbal and written warnings
- Performance improvement plans
- Attendance logs
- Incident reports
Don’t rely on memory or informal conversations. If there’s a paper trail showing a pattern, you’re in a much stronger position.
2. Review Policies and Contracts
Before taking any steps, review the employee’s handbook, employment agreement, and any union rules or severance plans. Are there procedures you’re obligated to follow? Are there any promised benefits or protections in place? Failing to follow your own policies can lead to breach of contract claims or questions about fairness.
Also, check whether the employee is at-will. Even at-will employees can sue for wrongful termination if the firing is discriminatory or retaliatory.
3. Avoid Discrimination and Retaliation Traps
Review recent events: Did the employee recently take protected leave? File a complaint? Request an accommodation? If so, the timing of a termination could appear to be retaliation, even if it isn’t.
Be sure your decision isn’t based—even subconsciously—on race, age, gender, disability, religion, or another protected characteristic. A clear and consistent reason for the termination, backed by evidence, helps show that the decision was lawful.
4. Prepare for the Exit Conversation
The termination meeting should be short, clear, and respectful. Avoid long explanations or debates. Let the employee know the decision is final. If you offer severance or a separation agreement, provide sufficient time for the employee to review it, especially if it includes a waiver of legal claims. Under federal law, employees over 40 must be given 21 days to consider such agreements. Also consider what state your employee is working from, especially if they are remote, the state they reside in may have specific details about notice and time to sign a separation agreement.
Have another manager or HR person present, and stick to the facts. Don’t speculate, don’t joke, and don’t personalize it. The goal is a professional, calm conversation.
5. Handle the Aftermath Thoughtfully
Plan how to communicate the departure to other employees. Avoid bad-mouthing the employee or disclosing private information. If the employee raises concerns about discrimination or mistreatment during or after the termination, don’t ignore them. Document the conversation and follow up appropriately.
If you collect company property or revoke access to systems, do it smoothly. Ensure that final pay, unused vacation, and other benefits are paid out in accordance with New York law.
Need help reviewing your termination process or handling a tricky situation? Rodriguez-McCloskey PLLC can provide clear, proactive guidance. Contact us today.
