Why Employers Should Tell Employees the Truth When Firing

When an employee is terminated and seeks out legal counsel, one of the first questions they’ll need to answer is, “what reason did your employer give for firing you?” The answer to that question is what steers that rest of that legal consultation, and ultimately the decision on whether this ex-employee may have a claim against you.

For an employment law attorney, one of the best answers to that question is, “they didn’t give a reason for firing me.” 

Drumroll please: if this is the case, your disgruntled ex-employee and her attorney now get to make up their own termination story.

“My attorney told me not to give a reason.”

It is very possible that you were told by an attorney that you don’t need to give a reason for termination. If that’s the case, double-check that you were talking to someone who regularly practices employment law – not business law, not corporate law, or any other type of law. 

Employment law is its own complicated beast. You don’t go to a podiatrist for your heart issue, so don’t go to a real estate attorney for employee issues.

That being said, there are certainly lawyers who give this advice. In their mind, employees are at-will and therefore the employer doesn’t need a reason for terminating. Unless you’re in Montana, where you need “cause” to terminate, this is true. But it’s still a pretty short-sighted plan.

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Treating your departing employee well means treating them with honesty and respect.

Our goal at CEDR isn’t just to tell you the law — it’s to help you follow the law in a way that also reduces your risk of any claims. The truth is, you do have a reason for terminating that employee — and CEDR members certainly know better than to terminate for an unlawful reason. So why wouldn’t you tell your departing employee your legitimate, legal, and (ideally) documented reasons for why they’re no longer a fit for your business?

It’s in your best interest to treat this departing employee with dignity and respect, just as you should while they’re working for you. Leaving them with unanswered questions about what just happened is not serving them, or you, well.

Don’t make it seem like you’re hiding something.

It’s very common for terminated employees to call up an attorney because they believe you’re required to terminate for cause. They might also be under the impression that you must give a reason for terminating them, or to at least give a certain number of warnings before termination. The attorney is going to be a bearer of bad news on those fronts, but they will assess the situation to see if you may have acted unlawfully. Not saying why the person was terminated is a big red flag to the attorney, as it suggests you were trying to hide something.

At that point, the attorney and your ex-employee are going to talk through what happened over the course of employment. They’ll be looking for anything that might be evidence that you terminated them for an unlawful reason – filing a workers’ comp claim, getting rid of the person before they could file a workers’ comp claim, raising concerns about workplace policies, complaining about a manager’s behavior, the employee needing time off for medical reasons, etc.

The lawyer may stumble upon something that has absolutely nothing to do with your reason for terminating. But, if you failed to give a reason for the termination, now the tables have turned and you’ll need to defend yourself. Part of that defense will be providing the real reason for termination, which is simply going to look suspicious since you “covered it up” in the first place.

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“I don’t want to hurt their feelings, so I’ll just call it a layoff.”

Another common mistake is giving a reason for termination, but not the real reason. Employers frequently want to call it a layoff rather than a termination, as it sounds a lot nicer. Unfortunately, this is evidence of you lying unless it’s a true layoff. Hint hint — lying does not look good to anyone (other than the ex-employee’s attorney).

A layoff means you have eliminated a position, meaning that there are no immediate plans to fill that position again. Think about how easy it is to disprove a layoff. The second you post a job ad, you’ve been caught in a lie.

So, here you’ve given a reason for termination, but it’s not the real reason. Which begs the question, why are you lying? What didn’t you want the employee to know? Maybe you’re covering up the fact that you don’t want to employ someone who might get pregnant, or someone of a certain age or race.

Let’s say the person you “laid off” was over 40, and you turn around and hire a 30-year-old to replace them. You’ve just handed the lawyer evidence of age discrimination. Had you simply documented their performance concerns, raised them with the employee, noted a lack of improvement, and then terminated for those performance reasons, you’d be in a lot better shape. 

You may think you’re being nice to your departing employee by not giving a reason or not giving the truthful reason for termination, but the person you’re actually being kind to is their attorney. You have gifted them a potential lawsuit simply by not owning up to the reason for your employment decision. 


This post authored by CEDR Compliance Director Jennie McLaughlin.

Jul 17, 2019

Friendly Disclaimer: This information is general in nature and is not intended to provide legal advice or replace individual guidance about a specific issue with an attorney or HR expert. The information on this page is general human resources guidance based on applicable local, state and/or federal U.S. employment law that is believed to be current as of the date of publication. Note that CEDR is not a law firm, and as the law is always changing, you should consult with a qualified attorney or HR expert who is familiar with all of the facts of your situation before making a decision about any human resources or employment law matter.

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