Communicating termination reasons to other employees
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My CEO would like to share the reason for terminations at a high level with other employees. (Like - performance issues, core values issues, etc.) How much can you share with other employees about why someone has been asked to leave the company?
I'd be willing to bet a great many of your employees know about the termination, and why, before it even occurs. Having said that, I don't believe there are any laws prohibiting it specifcally. However, think about it. Would you really want your supervisor to be talking about why you were terminated? Why would you want to do that to anyone else? If a reason really has to be given, why not just go with "it wasn't working out" and leave it at that?
I don't really see much good coming from this.
We have issues in that individuals who are still on the team are upset by the fact that we're "losing great people". (When in reality the person was a performance issue.) It causes a bitterness toward the leaders on the team. Being able to share with those left on the team who come to complain about why we lost someone they liked would help to heal the rift between team and management. I can't imagine ever sharing details or even sharing high level information broadly, but for those instances where you have a valued team member who is very upset by the exit of someone they liked, being able to give them a response that makes sense of the situation would be helpful. (IE: I know you liked Sue, unfortunately, there were some performance issues that you are probably not aware of and that I'm not going to disclose to you. Or - Sue didn't do a good job of aligning to our core values, etc.)
I would be very very careful. Because anything you do say could later be used against you in either an unemployment claim or any type of discrimination claim. And often what you say is not what a person hears and repeats. It truly is not their business, but I do see how they can see it as unfair because they are not privy to all the facts. Even if you state what you posted above, there are going to be some that disgree with you on the decision. The best thing you can do is to treat your good employees well. So that when you have to make a hard decision, they can trust it.
Defamation should be a concern. At least one court has held, contrary to the majority view, that truth of the published statement is not necessarily a defense to a claim for libel. The case involved an email truthfully explaining that the employee had been fired for violating the company's travel and expenses policy. Just do a search on "is truth always a defense to defamation?" Most people who still have a job want to know why someone else lost theirs. Most people who lost their job want to maintain their privacy and dignity. I think you need a good reason to satisfy current employees' morbid curiousity at the expense of a former employee's dignity.
Moreover, to the extent a former employee feels wronged, adding insult to injury may increase the likelihood that they will sue you. As a lawyer friend once joked, "Do you know how to tell if an employee is properly classified (exempt/non-exempt)? I'll tell you. If they are happy, they are properly classified." So, by further irritating former employees with an assault on their dignity, I think you invite additional misery for yourself.