What You Need to Know When You Terminate an Employee (Dental Law Radio, Episode 21)
In Stuart Oberman’s experience with clients, the biggest problem he sees with employee terminations is the absence of a plan, and more specifically, lack of documentation. In this episode of Dental Law Radio, Stuart outlines what a solid employee termination process should include to avoid the significant long-term costs caused by emotional, seat-of-the-pants actions. Dental Law Radio is underwritten and presented by Oberman Law Firm and produced by the North Fulton studio of Business RadioX®.
Intro: [00:00:02] Broadcasting from the Business RadioX studios in Atlanta, it’s time for Dental Law Radio. Dental Law Radio is brought to you by Oberman Law Firm, a leading dental-centric law firm, serving dental clients on a local, regional and national basis. Now, here’s your host, Stuart Oberman.
Stuart Oberman: [00:00:25] Hello, everyone, and welcome to Dental Law Radio. Well, this is going to be sort of part two. Last week, we spoke about how to hire an employee and some of the things that you need to include in the new hire package. And I mentioned then that it’s easy to get married; it is tough to get divorced. Well, today, we’re going to get divorced. We’re going to talk about what you need to know when you terminate an employee.
Stuart Oberman: [00:00:57] And we get these calls all the time. What do I need to know? What do I need to do? How do I need to do it? And where are my pitfalls? And I will tell you, your biggest pitfall is not having the documentation upfront, and then not having a plan when you plan to terminate. And in today’s world, firing an employee is complex and challenging. You have a lot of scenarios, wrongful termination, discrimination issues, willful termination, quitting, resigning. So, before you even think about firing an employee and will not take you long to figure out that you need to fire an employee when you make up your mind to do it, there are signs, a lot of times, already there.
Stuart Oberman: [00:01:55] So, again, the process is complex and challenging. And then how to end the termination is often the most difficult part. But I want to take a look at some key steps that you need to look at when you involuntarily terminate. Not a resignation, not those kinds of things, but when you’ve got to make the hard decision, is “I’m cutting you loose. Now, I’m going to make a plan to do it.”
Stuart Oberman: [00:02:23] So, first and foremost, you’ve got to document the process. You have to create a plan. What is your strategy for termination? We’re going to get into that. Who do you communicate the termination to with your key staff members? There are some people in your office you never want to tell you’re terminating someone because that person will find out in 15 minutes. So, you have to understand who and what positions you notify. And then, one thing you have to do is notify your IT administrator or your provider. And we’re going to go into that in a little bit because that is a key process.
Stuart Oberman: [00:03:09] So, documenting the separation of an employment process is very difficult. And I will always say, and I’ve said it in the past, when I talk to the dental schools, talk about things in writing, if it’s not in writing, it never happened; if it was not in writing, it was never a procedure; and if it was not in writing, it was never a processed. So, what happens is when you compile detailed documentation, it shows you followed the company policy through the discipline and termination process, you were already ahead of the game.
Stuart Oberman: [00:03:44] Now, that’s assuming that you have a process. So, if we’re talking about all this, and you don’t have an employee manual or process for terminating, that’s your first step. What does your employee manual say? How detailed is it? If you have an employee manual that has no instructions, it’s 20 pages, I would urge you to shred it. Call us and get you another employee manual because that is a key denominator in this whole process here.
Stuart Oberman: [00:04:14] So, you have to figure out what your effective date of the termination and record it. What day did this happen? I do not want you to rely on text. “Well, we have a text message that says they were fired on August 1st.” No, no, no, no, no, no, no. That’s not going to get it. Did you document the termination? Supporting details. Did you have performance reviews? Did you have a warning and discipline, action or process? Did you provide an official termination letter to the employee, including the date of termination? And did you outline the benefits?
Stuart Oberman: [00:04:58] Now, I’m not talking about a 36-page letter to the employee, but something in your file documenting that they received notice, and here is the separation notice, and then here is what’s going to take place benefit-wise. So, one key area is that when you fire an employee, you got a void. Who’s going to fill that position void? “Well, we’ll get around to it.” You can’t do that. You already got to have a plan in place once that employee is fired. And when you make the plan, you’ve got to outline the process and functions of that employee’s responsibility. Who’s going to take over that? Because statistically, you, as a dental practice owner, spend more time in the chair with the patient contact-wise than any other profession, face to face. You do not have the time to do this as an afterthought.
Stuart Oberman: [00:05:57] So, what happens is that when you terminate, again, you’ve got to figure out what are the key steps that I’m going to talk to my employees about? Do you have an HR reporting process? Who is that person they’re going to talk to? What is the procedure? Do you have a benefits person? Do you have a CFO who they need to talk to?
Stuart Oberman: [00:06:23] One of the most important things I want to mention right now is your IT person, whether they are in-house or whether they are a third party. When you make the decision to terminate an employee, one of the first people you’re going to call or should call and sit down with and talk to is your IT person. You’ve got to outline what access that employee has; what access they will not have; how do you cancel the computer; how do you get their phone systems back to the office, if you will; what is on their cell phone; how do you disable passwords; how do you block access? So many employees in today’s world have access after hours. How do you block that record? How do you determine whether or not that employee has downloaded your confidential information?
Stuart Oberman: [00:07:26] Again, you must have a nondisclosure agreement and a confidentiality agreement, like we discussed in part one of this podcast. How do you delete two phone messages off their phone? Where do you go with the data? That’s absolutely critical. This is one of those important steps that you can do because as soon as you terminate that employee, there are times you’re going to have to do it over the phone. There are some cases, there’s just no way around that. And I will tell you, when that person hangs up on the other end that you’ve terminated, I will tell you, they’re going to go right to their computer, and you need to shut off access immediately.
Stuart Oberman: [00:08:12] Now, what protocols do you follow? Well, how many protocols? You got to have protocols. What’s the separation package look like? Do you have a termination letter? What are the benefits? What’s related paperwork? Who is going to be their contact in HR? Do you want that former employee calling you and asking you for information? Of course not.
Stuart Oberman: [00:08:40] One of the things you’ve got to take a look at also critically from a employment law standpoint is what money do you owe them or bonuses after they are terminated? I hear so many times. “Well, Dr. Smith did some really, really, really bad dental work. I’m going to withhold about $4000 from his pay because I know there’s going to be recalls, redos, remakes.” Wrong. You can not hold money like that.
Stuart Oberman: [00:09:13] Now, if you have an employment contract that states that you can withhold a certain amount of money for a certain period of time, that’s a different scenario versus you’re a lousy employee, you’re going to cause me money after you leave, and I’m just going to withhold money from your paycheck. That will get you in trouble really quick with the Federal and State Department of Labor. So, on that employee’s final paycheck, my strong recommendation is you evaluate the final amounts, and you determine what that final amount is. If you’re going to withhold any type of compensation, you better have a really, really good reason.
Stuart Oberman: [00:10:01] Now, one thing to consider also from a benefits standpoint, does your policy manual say that they’re entitled to unused vacation, sick time, PTO time? What does your manual say? “Well, it doesn’t say anything. I don’t have that information.” That is a very, very poignant sticking point. And when that person retires, all that has to be outlined. You cannot wait to do this, or decide this or make a sort of unrushed decision after they’re terminated. So, before that employee is terminated somehow, someway, you need to make sure you’ve got their updated contact information.
Stuart Oberman: [00:10:51] One thing that absolutely drives me crazy is that employees or doctors, a lot of times will have a — I’ll use the words Gmail accounts, Yahoo accounts, Comcast account, and it’s not to single out any of those companies, but what happens is, is that the employees have their own accounts. And what happens is, also, they change their passwords without telling our doctors or employers on those accounts.
Stuart Oberman: [00:11:27] From an IT standpoint, once that termination takes place, I will tell you point blank, you’re going to lose access to that employee’s email address because they’ve changed the password. And now, you are at their ransom. What’s going to happen if that employee somehow puts the Facebook account in their name? Is there a procedure for that? What does your IT company say? Do you even have an IT company? These are the things that you’ll be long litigating items after the termination process if you do not have it squared away. Now, I would urge you to have an email address that is tied to your website and not separate Gmail accounts. Again, there’s nothing wrong with Gmail accounts, but it is very difficult if everyone has their own separate island in a dental practice or any kind of employment.
Stuart Oberman: [00:12:35] So, you’ve got to start notifying patients that this person is no longer there. And they’re going to ask why, and you’ve got to develop the company policy as to why they are not there, which is very short, sweet, to the point. You never ever give away details, You never tell exactly why. I don’t care what the situation is, but it’s got to be across the company lines.
Stuart Oberman: [00:13:06] So, one of the things we also need to take a look at is keeping employee records. You must have a secure, centralized HR to house the employee records. Never, ever, ever in your lifetime do you have employees that have control of their own personnel files because what’ll happen is when they leave, I will guarantee you that those files are gone. So, do you have backup files? Who has access to your backup files? Are you using iCloud storage? Are these records safe from interruption, natural disasters, fires? Whatever it may be, these are all contingencies. And again, I cannot stress this enough where you have to have total, total strict confidentiality with this documentation as to who the employees who are concerned.
Stuart Oberman: [00:14:11] So, those are just really a couple of things that we want to do as far as the termination process. It is very complex. Do you want to have a severance? That’s a whole another conversation. That’s a whole another day. How much do you want to pay? “Well, I don’t want to pay anything.” I will tell you, there are sometimes where it is cheaper to get rid of employees with a monetary substance and a full release of liability, and a separation notice, depending on their age. It will depend on what kind of document that looks like meets the requirements. But again, it is so much easier to get married than it is divorced, and you’ve got to have these records in order to ensure a smooth transition in the termination process. And it can get rocky, folks. As a firm, we’re on both sides of that fence. We will represent employees, and we will represent employers. So, we get really both sides of that avenue. So, we’ve got a pretty good look as to what should be there and should not be there.
Stuart Oberman: [00:15:19] Well, folks, thank you for joining us today. Two-part series, hiring checklist and what you need to know to terminate employees. Critical steps, you need both. Thank you again. If you need to reach out to us, please feel free to reach out to me at email@example.com. 770-886-2400. And we will see you soon on the radio.
About Dental Law Radio
Hosted by Stuart Oberman, a nationally recognized authority in dental law, Dental Law Radio covers legal, business, and other operating issues and topics of vital concern to dentists and dental practice owners. The show is produced by the North Fulton studio of Business RadioX® and can be found on all the major podcast apps. The complete show archive is here.
Stuart Oberman, Oberman Law Firm
Stuart Oberman is the founder and President of Oberman Law Firm. Mr. Oberman graduated from Urbana University and received his law degree from John Marshall Law School. Mr. Oberman has been practicing law for over 25 years, and before going into private practice, Mr. Oberman was in-house counsel for a Fortune 500 Company. Mr. Oberman is widely regarded as the go-to attorney in the area of Dental Law, which includes DSO formation, corporate business structures, mergers and acquisitions, regulatory compliance, advertising regulations, HIPAA, Compliance, and employment law regulations that affect dental practices.
In addition, Mr. Oberman’s expertise in the health care industry includes advising clients in the complex regulatory landscape as it relates to telehealth and telemedicine, including compliance of corporate structures, third-party reimbursement, contract negotiations, technology, health care fraud and abuse law (Anti-Kickback Statute and the State Law), professional liability risk management, federal and state regulations.
As the long-term care industry evolves, Mr. Oberman has the knowledge and experience to guide clients in the long-term care sector with respect to corporate and regulatory matters, assisted living facilities, continuing care retirement communities (CCRCs). In addition, Mr. Oberman’s practice also focuses on health care facility acquisitions and other changes of ownership, as well as related licensure and Medicare/Medicaid certification matters, CCRC registrations, long-term care/skilled nursing facility management, operating agreements, assisted living licensure matters, and health care joint ventures.
In addition to his expertise in the health care industry, Mr. Oberman has a nationwide practice that focuses on all facets of contractual disputes, including corporate governance, fiduciary duty, trade secrets, unfair competition, covenants not to compete, trademark and copyright infringement, fraud, and deceptive trade practices, and other business-related matters. Mr. Oberman also represents clients throughout the United States in a wide range of practice areas, including mergers & acquisitions, partnership agreements, commercial real estate, entity formation, employment law, commercial leasing, intellectual property, and HIPAA/OSHA compliance.
Mr. Oberman is a national lecturer and has published articles in the U.S. and Canada.
Oberman Law Firm
Oberman Law Firm has a long history of civic service, noted national, regional, and local clients, and stands among the Southeast’s eminent and fast-growing full-service law firms. Oberman Law Firm’s areas of practice include Business Planning, Commercial & Technology Transactions, Corporate, Employment & Labor, Estate Planning, Health Care, Intellectual Property, Litigation, Privacy & Data Security, and Real Estate.
By meeting their client’s goals and becoming a trusted partner and advocate for our clients, their attorneys are recognized as legal go-getters who provide value-added service. Their attorneys understand that in a rapidly changing legal market, clients have new expectations, constantly evolving choices, and operate in an environment of heightened reputational and commercial risk.
Oberman Law Firm’s strength is its ability to solve complex legal problems by collaborating across borders and practice areas.
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