Employment Law

What to Include—and Not Include—in a Termination Letter

You may come to the conclusion that it's time to terminate the employee when they violate company policies, act inappropriately, or perform below par. You might avoid a legal headache by carefully crafting the letter.
"A termination letter should be used when letting an employee go against their will. Although more information, if well-crafted, can typically lessen a former employee's desire to file a lawsuit, certain states do not require such a letter "said Merrick Dresnin, a consultant in human resources with MD-HR Consulting Services in Washington, D.C. People value open and honest communication.

According to Experian Employer Services, a Costa Mesa, California-based HR consulting company, 18 states mandate that employers give employees a written termination letter or particular documents at the conclusion of their job.

Employees with contracts or collective bargaining agreements will also require formal notice of their termination from their employer.

Sara Jodka, an attorney at Dickinson Wright in Columbus, Ohio, said: "I urge employers utilize termination letters in situations when the employment at issue is governed by an employment agreement that contains termination processes." "A formal, written notice of termination might be necessary in those circumstances. If the employment agreement specifies that there must be a reason for the termination, I advise drafting the termination notice's language in accordance with those terms, or referring to the relevant part of the employment agreement." Employers should take their time and thoroughly prepare the letters.

What to Put In
Termination letters should be formal, understandable, accurate, and timely.
The letter must contain "the grounds for the separation, a request for the return of any corporate property or equipment, a mention of COBRA rights, and a request to schedule any future visits to the company through human resources. The criteria for content vary by state "Added Dresnin. The corporate policy the employee broke or the dates of any verbal or written warnings may need to be mentioned in the letter in specific circumstances.

According to Kimberly Prescott, president of Prescott HR in Columbia, Maryland, the letter should also include "the last date of employment, date of the last paycheck, vacation/PTO [paid time off] payout, the last date of the different benefits, how to access pay stubs, and the process for accessing the 401(k)." The letter can also include a reminder of any nondisclosure or confidentiality agreements the employee has signed. Verify their home address and personal email address.

Either a printed copy or an email can be used to convey the termination letter. A printed page, in my opinion, demonstrates that the organization takes this choice seriously. "Any separation ought to be conducted with the utmost formality," Dresnin added.

What to Leave Out
Employers don't want a termination letter to be used as evidence in a later case for retribution or discrimination. The termination letter should not contain insults, jokes, sentimental sentiments, or excessive information. The language should be polite and straightforward.

Keep to the facts, Dresnin commanded. "A termination letter should include a brief explanation of the reason for the separation, any necessary details that would be helpful to the former employee, the HR professional's signature, and not much else. There should be no feelings, opinions, or apologies in this letter."
Prescott disagreed with him on one thing, though: "I highly urge against including any information that might be used as justification for termination. The state will make a direct request for the information if it is required for an unemployment claim."

An Illinois case demonstrates a situation in which the employer's efforts to obtain information backfired. A medical practice was sued by two workers for unpaid overtime wages and retribution. Their termination letters emphasized their lack of professionalism, rudeness, and patient concerns. The staff members submitted a motion to compel the medical facility to disclose the names and contact details of the patients. As a provider of healthcare, the employer asserted that the workers' interest in revealing patient information during the legal processes was exceeded by the patients' right to privacy. The employees' request to learn the names and contact information of the patients was granted by the U.S. District Court for the Northern District of Illinois in 2014.

As long as it doesn't amount to discrimination or retribution, employers are legally permitted to terminate most employees at any time for any reason or for no reason at all. Every state, with the exception of Montana, presumes that employment is at-will.

The termination letter shouldn't include any mention of legally protected traits including sex, gender, race, color, religion, national origin, disability, pregnancy, or age in order to prevent discrimination litigation.
How things could go wrong for the employer is demonstrated by a recent instance. A vehicle dealership in California was sued in 2020 by the U.S. Equal Employment Opportunity Commission (EEOC) for firing a title clerk who was receiving cancer tests. The office assistant had told her boss about her hospitalization, cancer screening, and impending return to work. Soon after disclosing that information, she received a letter of termination informing her that her dismissal was unrelated to her performance and advising her to "concentrate on her health." The EEOC claimed that the letter was evidence that the company had treated her unfairly due to a condition that was protected by the Americans with Disabilities Act. A resolution was reached on January 19, 2022.

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Source: SHRM