What You Must Do When An Employee Leaves You

Companies with employees know that sometimes employees leave, whether through resignation, layoff or termination.  Ending the relationship is never a comfortable conversation, but it must be handled well for legal, professional and morale reasons.  Here are some tips:

  • Your Employee Handbook should have a policy in place that employment is “at will.”  Either the employee or the employer has the right to end the relationship at any time, for any reason.
  • If the employee has an employment contract, there should be specific sections saying what the company’s and the employee’s obligations are in the event of termination.
  • If the employee has signed a non-compete or non-solicitation agreement, now is the time to remind them of its terms.
  • If the employee is resigning, ask them for two weeks notice, to give you time to find a replacement.   The employee does not have to give notice, but it is a professional courtesy.
  • If the employee is being terminated for cause, make sure that you have followed the discipline policy that should be outlined in your Employee Handbook.  Document every disciplinary action and discussion.  This is critical to protecting the company if issues arise in the future.
  • Have an exit interview with the employee.  Ask them in confidence how the company can improve in the future.  You may find out some things you did not know.
  • The employee may ask for a reference.  Have a policy in your Handbook.
  • Communicate final pay, benefits continuation, whether you will pay for unused vacation in accordance with state law (this should be in your Handbook).  Arrange to have all company property and keys returned.  Notify your IT administrator to change passwords and access codes.
  • Wish the employee well.  The employment relationship may have ended, but neither side should burn bridges.  In a world of instant communication, reputation is very important and should be protected, on both sides.
  • Communicate to your other employees as well.  When someone leaves, all existing employees evaluate their situation.  Keep your ears open and offer some reassurance that all is well.

Sample Policy

LEAVING THE COMPANY

General Policy

 All employment with the Company is “at will” employment. This means that you have not been hired for a specified duration, but that you can terminate your employment or the Company can terminate your employment at any time, with or without cause, and with or without prior notice. Your at-will employment status can only be changed by a written agreement between you and the Company, signed by both you and an Officer of the Company.

 Resignation

If you decide to leave for any reason, the Company would like the opportunity to discuss the resignation beforehand to understand the reasons and see if there are any alternatives.  However, if you still decide to leave the Company requests at least two (2) weeks written resignation notice.  If an employee does not provide advance notice as requested, the employee will be considered ineligible for re-hire.

Final Steps

Upon separation of employment you must remove your personal possessions.  Any company property (uniforms, cell phones, keys, computers, identification cards, etc.) must be returned to the Company at the time of separation.

The Human Resources Department will conduct an exit interview, arrange for the return of all Company property and equipment, and arrange for your final pay and any accrued benefits that are due upon termination.  If you are covered by the Company medical plan, you will receive separate information on benefits continuation options.

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