Exiting Gracefully: The Termination Letter

exit_164611473Exits from a job can be graceful, as in Groupon CEO’s Departure Memo, or contentious. From the employer perspective, getting the termination letter right will go a long way toward protecting rights and ratcheting down emotions.

In addition to the information legally required to be given to the employee on termination, employers should consider preparing a termination letter with the following information:

1. Notice that the action was a termination or discharge.

2. The date of the termination.

3. The reasons for the termination. The description should give the employer a realistic chance of proving the basis for termination, and provide the employee adequate notice of the reasons for termination (e.g., “the employee failed to meet production standards”).

  • Don’t be too specific (e.g., “the employee failed to meet production quota of 18 widgets per hour three days in a row”), because this may create an insurmountable proof standard for the employer in litigation.
  • Don’t be too vague (e.g., “the employee was terminated for poor performance”), because this may unfairly fail to give the employee notice of the reasons for termination, and cast doubt on the employer’s stated reasons for termination.

4. The dates and subject matter of prior warnings. This information can be an effective deterrent to wrongful termination claims, particularly when documentary evidence supports the prior discipline.

5. Benefits to which the employee is entitled. These may include the right under COBRA to purchase continued health insurance coverage under the employer’s group plan and information on unemployment benefits.

6. Circumstances under which the employee had access to a second review or appeal of the termination. It may be of strategic benefit to the employer to agree to characterize the employee’s departure as a layoff, resignation, or retirement. State also whether the employee availed him- or herself of the right of appeal.

7. The employee’s last day of work. State what company property must be returned by that date.

8. The date, time, and place for an “exit interview.”

There’s no law that requires an employer to provide a termination letter identifying the reason(s) for the termination. Some employers don’t want to do one because of concerns that they may be used as evidence to support a wrongful termination claim. Others don’t want to use the resources to submit every letter to a human resources representative or employment law counsel for drafting or review.

But, from a purely legal perspective, well-written termination letters can be an important deterrent to wrongful termination claims. If they’re done correctly, they can provide persuasive contemporaneous support for the termination and reduce the risk of litigation.

For all you need to know about discipline and terminations, turn to CEB’s Advising California Employers and Employees, chap 17. A sample termination letter—along with many other sample employment documents and practical advice—is in CEB’s Drafting Employment Documents for California Employers.

Related CEB blog posts:

© The Regents of the University of California, 2013. Unauthorized use and/or duplication of this material without express and written permission from this blog’s author and/or owner is strictly prohibited.

2 Responses

  1. [...] interview scheduled after notifying the employee of the termination decision—preferably with a termination letter—can be an important deterrent to a wrongful termination action. Allowing the employee to discuss [...]

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