With the continuing economic layoffs, sequestration, and unemployment, employers and employees continue to deal with employment terminations, both individual and groups. Conducting exit interviews (termination meetings) with departing employees – both for voluntary and involuntary terminations – is a best practice that companies should follow for many reasons.
Exit interviews cover a gamut of human resources and legal employment issues. Apart from the obvious “why” and “how” to conduct exit interviews, the meeting is key both for giving the employee information – including the bad news (termination of employment, compensation and benefits; end of access to company Intranet, email, etc.) and the good news (severance compensation/benefits with separation agreement/release,, reference, outplacement, COBRA subsidy, etc.)
Why Do Exit Interviews?
Exit interviews in connection with employment separations – both voluntary and involuntary – are important for employers and employees, not only from a legal standpoint but from a humanistic view as well. There are at least four key reasons that employers should make it a regular practice to conduct exit interviews: 1) providing a humane, honest parting; 2) explaining the general exit process, separation benefits, post-employment obligations and related information; 3) discussing the circumstances of the separation; and 4) assessing potential legal claims and risks .
- First, common sense dictates that an exit interview, regardless of the circumstances of separation, provides a chance to say goodbye gracefully, to have an open forum for discussion to allow the parting employee to “get everything out of his/her system”, and perhaps even to obtain suggestions for improvements at work, the supervisors, the working conditions. Such a meeting and considerate treatment of the employee can go a long way toward giving employee the chance to give his opinion, and may make the individual think twice about “getting revenge” over an involuntary separation or uncomfortable situation.
- The second purpose of an exit interview is important legally, yet also can appease a parting employee, demonstrate the employer’s generosity, and chill legal claims. Specifically, the exit interview provides an opportunity for the employer to explain to the parting employee the separation benefits that will be provided and the process for receiving those, as well as the company’s general exit procedures.The law requires employers to pay salary and compensation for unused vacation which have accrued through the separation date. While it is simple and common for employers to just send or give the employee a final paycheck reflecting these payments, it is helpful in avoiding confusion and claims for wages or vacation, as well as mentally positive from a financial aspect, for an employee to know exactly what compensation she is receiving and why.Similarly, while information can be mailed to a separated employee, the termination process is smoother if the company representative explains in an exit interview any COBRA or state statutory rights, obligations and procedures for group health insurance conversion, as well as vested benefits and processes under pension, profit sharing and/or 401k plans. To the extent the company has a policy, practice or other reason for providing notice pay (e.g. two weeks’ pay in lieu of two weeks’ notice of termination); this would be a good time to let the employee know that he will receive it.Be ready to discuss 401(k)/benefit rollover and pension plans. Also, if an employer has a policy, practice or other basis for providing severance compensation or related benefits (e.g. limited continued health insurance at company ‘s expense, outplacement services or compensation, agreement not to protest an unemployment claim, reference letter), the severance package offer should be discussed at the exit interview. As a general rule, remember to apply policies consistently with similarly situated employees. There have been valid discrimination claims based on terminated employees receiving different severance packages based on protected class, e.g. gender.
Employers should be aware, however, that there is no legal requirement to provide severance and therefore, any offer should be conditioned on the employee signing a written agreement that contains the employee’s release of claims. Again, offer similar severance packages to similarly situated employees. Further, severance agreements/releases require certain legal terms in order to be valid, including specific requirements and language if employees are age 40 or older, certain additional language/terms and procedures should be used in consultation with an attorney. Large group terminations/RIFS may be subject to federal or state WARN statutes, requiring extensive notice to employees or notice pay.
It is also essential for employers to impose or remind employees of any post-employment restrictions, such as nondisclosure of confidential information, non-solicitation of customers/employees, or non-compete. Such obligations require very specific legal requirements and language which may differ by state.
Finally, the provision of benefits information and exit procedures should also include collection of company keys and property and explanation of any other exit policies, including the company’s policy regarding responses to reference inquiries from prospective employers.
- A third and very important reason for an exit interview is to discuss the circumstances of the employment termination. Even if the separation is voluntary, the interview gives the employee the chance to explain the reason for the resignation and the company should document not only the voluntary nature of the separation but the reason therefore. This may be helpful in later defending claims for unemployment compensation, unlawful termination or “constructive discharge” (i.e. employee contends she was forced to resign due to factors within the employer’s control.) In some cases, if an employee indicates she is resigning due to a problem that the company can control and rectify, the company may be able to resolve the problem and retain a good employee.Discussing the circumstances of termination is also important in the context of an involuntary termination. While most employees are generally “at will” and can therefore be discharged for any or no reason except an unlawful reason such as discrimination, whistleblowing, breach of contract, etc., the practical reality of today’s litigious society suggests that employees be provided specific reasons for termination. Without an explanation, the employee may leave with a perception or suspicion that the termination was unlawful. The supervisor or other individual conducting the interview should review the employee’s relevant performance and/or disciplinary history and documentation, as well as the relevant company policies and policy violations that led to the termination.An honest explanation, while perhaps critical and negative, demonstrates the company’s attempt to treat the employee like a human being. The explanation, related history and documentation can also chill legal action or consultation with an attorney, or at least (assuming the employee is honest with his attorney and shares the relevant documentation) can discourage attorneys from bringing frivolous claims or threats. I often hear from clients that they are afraid to terminate an employee and to discuss the reasons for termination, especially when the employee has threatened legal action or indicated she has an attorney. However, after counseling the clients as to why it is important to explain and document to the employee the valid reasons for the termination, in most cases, the clients have avoided legal claims because the employee and/or his attorney understood the legitimate reasons for the discharge.
- Finally, whether a separation is voluntary or not, the company should conduct an exit interview in order to assess any legal claims that the employee may have or perceive in connection with her employment and/or separation. Claims for unemployment compensation, wages, overtime or vacation pay should be discussed and, if valid, resolved at the exit interview. Sometimes the supervisor simply needs to explain the company policy or legal duties and the employee will realize his claim is meritless.Employers may learn at an exit interview that an employee believes that an involuntary termination is contrary to an employment contract, handbook or policy. Even absent an employment contract , unless a handbook has a clear and conspicuous “at will employment” disclaimer and does not limit termination to specified reasons, progressive discipline or termination procedures , employees may have valid claims for breach of contract if a termination is contrary to the handbook provisions. Facilities should make it a practice of discussing questionable terminations and related policy and legal issues with an attorney before proceeding with a termination. Sometimes a termination for attendance can violate FMLA or disabilities laws (no fault attendance policy can be illegal.) Also, even if a RIF is economic and involves across the board layoffs at company, selection must be nondiscriminatory – which includes even unintentional discrimination but disparate impact (e.g. most of the employees fired are over 40.)Also significant and justified by legal requirements is a determination from a parting employee of any claims for discrimination and/or harassment, including sexual harassment, based on the termination or conduct that occurred during employment. As the Supreme Court long ago made clear, and state and federal courts have followed and broadened, employers have a duty to investigate and take remedial action on discrimination and harassment claims or they may be left without a defense to related legal claims, which can result in enormous damages payments or settlements and defense costs. Even if the complaining employee is leaving, the company has a duty to investigate a complaint and take action to ensure that remaining employees are not suffering discrimination or harassment by the same alleged perpetrator. Employers should note that the legal duty also requires having a written antidiscrimination/antiharassment policy and procedure for handling complaints.If an employee raises or threatens legal claims during an exit interview, consult an attorney and consider a severance package (or increasing the package offered) and a proper severance agreement/release. At the same time, be careful not to engage or let employee engage you/HR in after-the-fact defensive arguments in attempt to save his job. For example, if termination is for repeated unscheduled absences, and employee first discloses at the exit interview that he/she may have disability (unpredictable migraines), listen to the information and discuss later with attorney. Most of the time, there is no basis to change the termination decision (and timing of decisions and notice is important), and don’t want to let employee try to argue way out.
Remember that claims can arise after termination, for defamatory statements made by company or employees both externally (e.g. job reference request) and internally. Only those with need to know should be advised; treat termination, related facts, severance agreement as confidential.
How to Conduct Exit Interviews
Much of WHY employers conduct exit interviews applies to how to conduct and what to say and ask. For example, be humane by outlining logistics and benefits.
The meeting is best conducted by a human resources or management person, with a witness. The witness should also be preferably with human resources or at least in the control group (management), and if possible, someone who employee respects and with similar demographics. Conduct meeting behind closed doors, provide privacy, and try to let employee leave gracefully without humiliation. (Note: certain terminations will need to be immediate, with removal from premises and little/no opportunity for exit interview. As best possible, a brief meeting is still recommended.)
Document the conversation, and later follow up with any issues/investigation with HR/Legal. The witness (and if possible the interviewer) should take notes, documenting reasons given for termination, pertinent statements made by you or employee, or allegations made by employee.
When you “interview” the employee, ask open-ended questions about their feelings about the company, the work, management/supervisors, working conditions, policies, any specific problems or incidents, and if resignation, the reason(s). Often reasons are simply personal such as moving or a better opportunity, but sometimes there are issues from which the company can learn from and take action if necessary.
If involuntary, meeting should include the company’s reason – be honest, and make sure the evidence and documentation exists to support the decision. The interviewer should know the information – don’t just rely on a supervisor’s file. Question the supervisor in advance if necessary and pin down the reasons so as to be prepared for discussion with employee. Documents to have available at the interview include the personnel file as well as the employee handbook. Make sure you follow the employee handbook process when terminating employment.
Note: if the termination is involuntary, then exit interview – open-ended questions of employee – may not go well and could be challenging. That’s why important to know, be honest, and document reasons for termination (e.g. tardiness, insubordination, poor performance, policy violation). Make sure have treat the involuntary exit in the same manner as similarly situated employees with similar issues. Enforce consistently.
Don’t discuss or let employee get into extraneous information. It like will only hurt, and is discoverable in litigation. Don’t get dragged into discussions of sour grapes, shift blame, claimed basis for termination that is not true. (e.g. don’t discuss absences if termination for tardiness.)
When giving the details of termination logistics, any severance/benefits, contract rights and obligations, be prepared with a “script” and the documents to give employee (more palatable for employee to walk away with something in hand, like severance agreement and terms, insurance conversion and benefit information.)
Finally, remember to take keys, IDs, company files, software, laptops, cell phones, passwords, etc from the employee before they leave.
Employers have many reasons for conducting appropriate exit interviews as a regular employment practice for all separations. There are no reasons to avoid this procedure, other than fear of honesty, reluctance to be critical, and avoidance of confrontation. From HR perspective, consider risk reduction by being humane, not only with termination itself but with counseling, warnings, notice, opportunities to improve prior to term. From a legal standpoint, often an exit interview means a satisfied former employee, and a company that’s following legal obligations. It means company keeps the upper hand – stands behind its legitimate decision, communicates its reasons to employee, and has strong position if legal claims threatened. So, when making and executing termination decisions, think about the consequences, conduct exit interviews, and take the action which is most helpful to your company in the long run.