What do I need to do not be sued after the employee termination?

by on May 22, 2009 · 0 Comment POSTED IN: HR Info Center

Severance packages and relief of claims waivers are a major defense against employee termination lawsuits

After the employee termination, consider providing a severance, and if you do, get a waiver and full release of claims. It’s relatively inexpensive after the employee termination to file a charge of discrimination or retaliation They have nothing to lose in doing so. And seeing it through to an award of damages may get costly, but the burden of the initial investigation is for the most part borne by the government agency and the employer. So it’s not hard for the employee to do it.

Employee termination and severance packages
The separated employee is offered a severance agreement or a severance package that includes a waiver and it makes the payment of severance dependent on the execution of a waiver of claims. The cost of filing a discrimination charge is really the value of the employee termination severance package – that cost plus any cost to pursue the case to conclusion, including attorney’s fees. So severance agreements probably eliminate thousands of discrimination claims each year. It’s a very, very good thing to do when you’re terminating someone.

On the other hand, you never want to provide any other added benefit above and beyond that without getting a relief of claims in a waiver from that employee in exchange for the benefit you’re providing after the employee termination.

Make a relief of claims waiver part of your employee termination severance package
Employers believe that if they just give them a few weeks of severance pay without getting a relief of claims or a waiver and the employee may just go away quietly. Well, that’s not the case. Several weeks later, the employee is likely to return with a lawsuit and seek even more money. Do you really want to protect your company? You’re getting a waiver and a full relief of claims. This may be an issue for HR or your Legal Department to handle. But it’s good to know that severance packages and releases are an option to avoid post employment termination lawsuits.

It’s something that you can suggest. Make sure you’re aware of whether or not your company has a severance policy. If you do, make sure you’re offering that as you terminate someone. And get that release, because it really can avoid a claim down the road.

Placement services
Another option is to provide or offer out placement services to the employee like employee assistance plans, particularly the long standing terminated employees, that will help them get back on their feet after their employment is terminated. This shows compassion on the part of the employer, to help the employee. For some employees who may have been out of the search market for really long time, it may be the only positive advice they’ll receive, and may displace the advice to get a lawyer. It minimizes damages and it focuses the employee on the future rather than on the past. So if you or your company can provide help on how to prepare a resume interview skills, it can go a long way. And maybe they get beyond the pain of the termination and just move on. So if it’s possible, these services should be provided as part of a severance plan, including a waiver of claims.

This is the edited remarks from the Rapid Learning Institute webinar “Firing Employees Without Getting Sued -What Supervisors Really Need To Know” by Laura Liss, Esq. held on October 5, 2006.

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