What is the process for terminating an employee?

Takeaway: Terminating employees can carry risk of a complaint or lawsuit from the terminated employee. The best way to protect the company is typically to have a well documented written string of poor performance, coaching, and opportunities for improvement by the employee. Always document the termination in writing and try to be direct when delivering the news.

Terminating an employee is never easy, but it's a necessary part of running a startup. Whether it's due to performance issues, company restructuring, or other reasons, startups need to have a clear process in place for terminating employees. Here are the steps that a startup company should take to terminate an employee.

Review the Employee's File

Before making the decision to terminate an employee, the startup should review the employee's file to ensure that there is written documentation of any performance issues or other concerns. This documentation can be important in case the employee challenges the termination.

Develop a Termination Plan

Once the decision to terminate has been made, the startup should develop a plan for how the termination will be communicated to the employee. This should include deciding who will deliver the news, what the timing will be, and what documentation needs to be prepared.

Schedule a Meeting

The startup should schedule a meeting with the employee to inform them of the decision to terminate their employment. The meeting should be held in a private location and should be conducted in a professional and respectful manner.

Communicate the Decision

During the meeting, the startup should communicate the decision to terminate the employee and explain the reasons behind it. It's important to be clear and concise in this communication, while also being respectful and empathetic.

Provide Next Steps

After communicating the decision, the startup should provide the employee with information on next steps, such as severance pay, benefits continuation, and the return of company property.

Document the Termination

Following the meeting, the startup should document the termination by having the employee sign the Termination Certificate attached as an exhibit to the employee’s proprietary information and inventions agreement (PIIA). You may also prepare additional written documentation of their termination, which could include the date of termination, the reason for termination, and any information on severance pay or other benefits.

Notify Other Employees

Depending on the circumstances surrounding the termination, the startup may need to notify other employees about the decision. This should be done in a sensitive and professional manner, without divulging confidential information.

Conclusion

Terminating an employee can be a difficult and sensitive process, but it's an important part of running a startup. By following a clear process, startups can ensure that terminations are handled professionally and respectfully, while also protecting the company's interests.