As an employer, one of the most distasteful parts of your job is when you have to terminate an employee. There are many reasons that employees may need to be terminated, but poor job performance tends to be at the top of the list. But are employers allowed to terminate employees solely for poor performance? The answer, in most cases, is “Yes.” However, there are some exceptions and guidelines to be aware of before handing out that pink slip.
States with At-Will Employment
Basically, if a state has adopted an “at-will” employment policy, it means that an employer can fire an employee at any time, for any reason, or for no reason at all. Currently, with the exception of Montana, all of the states in the US have adopted an at-will employment policy. As such, about 74% of the US workforce falls under the category of at-will employees. Because Maryland is one of the at-will employment states, you can fire an employee for poor performance. However, there are some exceptions:
- If the employee has an employment contract that in some way exempts them from being fired solely for poor performance;
- If the employee works in the public sector (these are not generally considered at-will employees); and
- If the employee is part of a union that has a collective contract that exempts them from the at-will status.
Reasons You Cannot Fire an Employee
Employers must always keep in mind that it is never legal to fire someone based on discrimination or any legally protected status. So if you say that you are firing someone for poor job performance, be prepared to back up your claim. If an employee is able to prove that their termination was not solely based on poor performance, you could get into trouble with the Equal Employment Opportunity Commission (EEOC) or other governmental agency. You might even eventually find yourself the defendant in an employment lawsuit. Here is a quick, non-exhaustive list of reasons that you are not allowed to fire someone.
- The employee was asked to do something illegal and was fired for refusing to perform the illegal act.
- The employee was fired for being part of a protected class under the Civil Rights Act of 1964 or against any state laws protecting against discrimination.
- The employee was fired in retaliation. The rule is that an employer cannot retaliate against an employee for “blowing the whistle” on any illegal activities happening at the company, for filing for disability or workers’ compensation, or for filing a complaint against the employer with the EEOC or union.
- You cannot fire someone if their actions are protected under the public policy or if they refuse to violate public policy.
Please note that, in a minority of states like Alabama, Louisiana, and Georgia, the last two exceptions do not apply. This is why it is important to work with an experienced employment legal team to find out what laws apply in your state.
How to Terminate an Employee for Poor Performance
We now know that an employer is allowed to fire an employee based solely on poor job performance. However, knowing both why you can fire an individual and how to fire them properly can minimize your exposure to an EEOC complaint or other retaliation.
Document everything. Although it is time-consuming, you need to document everything related to your employees. Especially if you begin to suspect that you may have to fire someone in the foreseeable future, keep good records of interactions that you have with that employee. Also, keep records of any examples of infractions or poor performance by the employee. The greater the paper trail, the more evidence you have to defend your actions against unfounded claims of discrimination.
Review the job description with the employee. Your company should have an employee manual or some documentation regarding job descriptions and employee expectations. But even so, do not assume that your employee has read their manual. Review job descriptions and company policies with employees to make sure that they are clear about what is expected of them on a daily basis.
Set clearly defined expectations. Make a performance plan and set clearly defined goals for each employee to help them meet or exceed company expectations. Set deadlines and dates for follow-up sessions to review the employee’s progress. Coach them, if necessary, on how to achieve those goals and, of course, document the interactions as well as the expectations thoroughly.
Follow up with the employee. Be sure to meet with the employee on predetermined dates for follow-up sessions, and counsel the employee on their progress. Keep them informed about any aspect of their job performance that needs improvement. Again, document every detail of these meetings.
Terminate the employee. If clearly defined deadlines have been given and the employee shows no improvement according to their specific improvement plan, then termination is likely justified. After so much notice and opportunity to improve, it would be pretty difficult for an employee to claim that they were unjustly terminated. At this point, termination should come as no surprise to the employee. Even so, be sure to review your documentation before conducting the termination interview. It is best to have the timeline clear in your head, and refresh your memory as to all of the reasons for termination. If the employee has an employment contract, you should review it with legal counsel to be sure you are not running afoul of a binding contract. Also, be sure to follow your state’s guidelines for termination pay.
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