With many offices having limited schedules and lack of work generally, some terminations are going to occur. For some businesses, this is an opportunity to cut some of the more difficult employees to work with. Unfortunately, many practices may have no other option but to cut back on operations or eventually shut down.
In lowering headcount, there’s a lot to consider, this is a minefield for California employers. The following are the ways to overcome the challenges to allow for valid termination during the pandemic.
1. Business decision and action
First, management needs to formalize a decision to reduce labor costs. These can be in the form of layoffs, furloughs, reduction in compensation or total closure. What I really care about is specifically outlining a business purpose for the layoff, furlough, or termination. All these are considered as an adverse employment action. And with any adverse employee action, there’s a real danger that the employee will use that to their advantage in the form of a lawsuit.
Another issue to watch out for is when reducing their compensation, either pay or benefits, including messing with their vacation pay or sick time. You still need to go through the same process to document the rationale for your decision. The decision needs to be well-documented, non-discriminatory, and legitimate to defend. This is one of those areas that’s really easy to screw up, so please over-document rather than under-document.
2. Post Adverse Event Responsibilities
Even when you’ve made the decision and have terminated the employee, there’s a few issues you may need to consider.
a. Recovery of Property. This part requires cooperation with employee as there Is a need to return company property and protect confidential information received in the course of employment. Pay close attention to employee’s access to confidential information, particularly patient lists. Consider having employees sign a confidentiality agreement some time before they get wind of a pending termination.
b. Severance Agreements. Like most lawyers, I’m a huge fan of these. A relatively small sum paid at the end of termination in exchange for never being sued by that employee again? Yes please, I’ll take two.
3. Retaining Counsel
I realize that this recommendation is self-serving, but I’d recommend you CALL or EMAIL me prior to terminating an employee. Due to the sensitive and emotionally charged nature that is termination, please let me walk you through it.
