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You have accepted that you made a hiring mistake when you hired Jason just over two years ago.

He is a smart inside salesperson but he complains about everything from the brand of his laptop to the location of the water bottles in the break room. It is impossible to discuss problems with him because he is hyper-sensitive to criticism and defensive. He puts you off whenever you ask for progress reports, blames co-workers when customers complain about an order, and always calls in “sick” on inventory day. You decided to use your “at-will” privilege to end this miserable employment relationship. No problem. You got good HR advice, had his check prepared, and called him to the conference room.

You recited exactly what you were coached to say, “Jason, we have decided to make a change. We are ending your employment with our company today. I have your check here, which includes two weeks of pay in lieu of a notice. Sonya will help you with your personal things.” When Jason pressured you to explain why he was being fired, your only word was, “Performance.” At the end of the day, you were feeling good about ending that bad relationship, but in a few days, Phase II of this termination appeared.

Managing the people process is neither simple nor easy. There is much to know, plan and execute to avoid time-consuming, worrisome, and expensive post-employment problems. After such good planning what could cause more problems with Jason? How is it possible that Jason qualified for unemployment? He has also demanded a year’s pay because he said you are in breach of a contract to him. What contract? He filed a complaint with the Wage & Hour Division of the Department of Labor for unpaid overtime. Finally, he sued the company for wrongful termination because he did not have a performance review. What? This is simply nuts. This guy did not do his job and now he wants to use the law to fleece the company. You feel as if you were skewered, hung over a hot pit, and slowly roasted! Sound familiar?

When you look at some of the most common mistakes made when managing employees, it will become more clear how HR navigates these murky waters as we implement the regulations that apply to our businesses, and what you should have done differently to manage this employee separation.

Guarantee a New Employee a Year’s Pay

When you sent Jason his offer letter, it clearly stated you would pay him XX dollars per year. You did not say your payroll is bi-weekly based on hours worked. You did not say he would receive a weekly salary. You promised to pay him by the year and now he wants his year of pay. Can he make that stick since he has only worked three weeks into his third year? Repeatedly, we are reminded that we must “pay what we promise.” The offer letter is a commitment and it is very important to craft the language to state employees are paid for actual work performed. Jason is contending that you have breached a contract by failing to pay for the entire year. What?

Pay Salary and No Overtime to Wrong Employees

Whether or not an inside sales position is exempt from overtime is contentious. The Department of Labor will pick that job apart to make certain it qualifies to be exempt from overtime. Some inside sales employees are exempt and some are not. A large, respected national salary survey company lists 53 percent exempt and 47 percent non-exempt. If Jason makes his case that he was just a sales clerk with a fancy title, he could claim back pay for all of the extra hours he has worked while he was with you and you can be certain he will pack them on! Keep in mind, the exemption status is based on the scope of the work and inside sales employees cannot be exempt under the outside sales exemption. Over in HR, we just try to figure out what the regulations mean.

Skip the Required Annual Review

You told Jason that you terminated him because you “decided to make a change.” But, when he pressed you for the reason, you said it was for “performance.” In your employee handbook, you state that employees will have an annual review. But, the branch manager did not give Jason a review last year. Given that Jason was terminated for performance, he is now contending that you had no right to terminate him because no one reviewed his work and told him his performance was unsatisfactory. If you say you “will” provide a performance review at a specific date, then you are vulnerable when you try to terminate people for poor performance and who have had no review. This is an example of how we use great care when we write policy. If you don’t plan to live with it, don’t say it.

Charge Employees for Mistakes

You remember getting a nice little check from the fast food restaurant where you worked as a student because your manager forced you to pay for cash register shortages? Never would you make the same mistake with your employees because you know that wage and hour laws forbid employers to force employees to pay for shortage and breakage. Any deduction from payroll, except those mandated by law (taxes, garnishments, child support, or other court orders), needs a written authorization.

Ask for a Non-Compete for Nothing

Jason signed his non-compete agreement as a condition of employment, before he started to work and cannot claim he was required to sign after he was already employed. You handled that exactly right. Since a non-compete agreement is a contract, requiring the employee to sign it after starting to work requires an added incentive. Otherwise, it is not likely we can make it stick. I know there are some places where non-competes are not even legal, but in most instances, they are just poorly written.

Talk Too Much at Termination Interview

You used your “at‑will” and told Jason he was being replaced. That should have been the end of the conversation. Adding that the termination was the result of “performance” opened the door for Jason to claim he was “discharged for cause” and he had not been given a timely review to address his performance issues. If you wanted to replace him without cause, then it was inappropriate to change the reason in the middle of the termination interview. When using the “at-will” privilege that is allowed in your state, the reason is this: “You decided to make a change.” However, always keep in mind that you can never use “at-will” to hide wrongful termination. The best lawyer in the country won’t make that disappear. Certified HR professionals sign a code of ethics and are forbidden from engaging in unethical behavior, such as using “at-will” to force an early retirement (age discrimination) or any other unethical dismissal.

Many of these management mistakes end in expensive legal problems, loss of goodwill, morale problems, and/or damage to the company reputation. Most are avoidable when the owner or manager acquires the knowledge, is well-trained and prepared, and does not allow ego to overpower good judgment.

MANA welcomes your comments on this article. Write to us at [email protected].