Should a company provide a terminated employee with a reason for the termination?

Yes. Advising an employee of the reason for the termination is considered a best practice and is required in some states. Providing the reason at the time of termination can head off accusations that the termination was for an improper reason, can bolster the employer's position at later administrative hearings (such as for unemployment claims) and can cause the employer to be thoughtful about the reason for termination.

Some states require employers to provide a reason for termination in writing to employees at the time of termination; others require a termination letter be provided at the request of a separated employee. Even when there is no relevant state law, employers should consider providing a reason for termination to help substantiate the decision in the event of a claim against the company.

Below are a few tips for ensuring that a reason for termination can stand on its own merit:

• Ensure that documentation is collected and reviewed by someone other than the direct supervisor. A supervisor's recommendation to terminate an employee may raise a red flag if the employee has an established record of satisfactory performance, if the supervisor's recommendation is based on subjective reasons that are not substantiated by written documentation, or if the reason for the recommendation is based solely on "he said/she said" evidence with no clear indication of what really occurred.
• Ensure that termination decisions are fair and consistent with company policies and past practices.
• Draft a clear statement of the grounds for termination. The goal of providing a clear reason for termination to the employee is to eliminate any debate over whether termination is a sound business decision. Doing so may reduce the employee's concern that he or she was treated unfairly. Employers should include facts leading up to the termination decision and reference any specific policy statements violated.
• Do not attempt to cover up the true reason for termination by providing irrelevant facts or reasons. When the reason for termination is not clearly identified, management may make vague or inconsistent statements, which can give the appearance of deception.

An involuntary termination of employment is a stressful situation for the employee and the employer. Providing a reason for the termination that makes sense to the employee shows the employee that the employer has thoughtfully come to the decision to end the employment relationship.