This page addresses the following topics:
Take a cautious approach to everything that you and your employer say and do about the termination. Anything your employer puts in writing about your termination and the documents you sign before leaving can have important implications for your future. If it’s important enough to be in writing, it’s important enough to examine with a fine-toothed comb. Ask questions and seek an outside opinion if you don’t fully understand the answers before you agree to or sign anything.
You will probably see a lot of papers before your last exit. Some, like a summary of your retirement plan status, are fairly routine. However, if you are asked to sign any type of document, take your time. Read the document thoroughly to make sure you understand what you are signing.
Before you take your final leave be sure to obtain letters of reference, make certain you understand the reason for your termination, negotiate the best severance package possible, and make use of all outplacement services available.
At this stage your goals are twofold: avoid burning bridges and keep lines of communication open while you still have one foot in the door!
If you were fired, attempt to obtain a written statement of the reason(s) for your termination. In some states, your employer is required to give you, upon request, a statement in writing of the reason for your termination. This statement is called a “service letter.” States currently requiring such a letter are: California, Maine, Minnesota, Missouri, Montana, Nebraska, Nevada, Oklahoma, and Washington.
If you cannot obtain a statement in writing ask your supervisor or manger to tell you the reason. Then write down for yourself the stated reason and include the date, time, and place (and any witnesses) that the statement was given. Read it to the supervisor and make a note of the date he or she confirmed its content.
When the end of your career with the company seems imminent, or if your working environment has become unbearable, you may be tempted to simply terminate the employment relationship voluntarily by tendering a resignation. Sometimes, a resignation can be helpful. When you apply for new jobs, you can honestly say that you quit the company voluntarily. Your employment record at your old company should reflect that you quit and not that you were fired. For some large companies with numerous affiliates or divisions, an employee who resigns from the job is eligible for rehire with the company at a later date, whereas an employee terminated for cause would not be.
However, the difference between being fired or discharged and voluntarily quitting is significant in a number of ways. Whether to resign or be fired is a matter of strategy and depends on the facts of your situation. Before you resign, consult an employment attorney if you can. An attorney will be able to give you specific information about how a resignation will affect your position. The information below gives some of the general reasons that resignation can be either helpful or harmful depending on the circumstances.
It may be that your employer wants to fire you and is making life at work difficult for you, hoping you will quit. The company may refrain from terminating you out of fear that the dismissal would be illegal. Under these circumstances, you may be better off not resigning. If you resign voluntarily, you may be unable to claim an illegal discharge. Assume your employer wants you out but doesn’t want to take the possibly unlawful step of discharge. You then can increase your bargaining power with your employer by staying and refusing to resign. You can use the company’s desire for your departure as leverage for obtaining a generous separation package in exchange for your resignation. In general, you should try to remain at the job as long as you can to increase your bargaining position. Finally, if your company has an internal grievance procedure, you can appeal the wrongful discharge. If you quit you may not have the right of appeal and your chances of regaining your job (if that is your objective) would be greatly diminished.
If your employment situation is unbearable because of illegal discrimination, you should still try to remain on the job as long as possible. Meanwhile, contact the Equal Employment Opportunity Commission (EEOC) or the state agency that investigates claims of discrimination. You are protected from retaliation for filing an EEOC charge or contacting an EEOC investigator. Therefore, any plan to fire you may be put aside at least while the investigation is going on, since the employer does not want to appear to have fired you for filing with the EEOC. For more information about filing a discrimination claim, please see our section on discrimination.
Ordinarily, when an employee proves that he or she was discriminated against by a former employer, the employee is entitled to “back pay,” the amount that the employee would have earned at the company had he or she not been discriminatorily terminated. However, if you resign your position because of harassment or discrimination, you would not be entitled to recover back pay unless your resignation is considered a “constructive discharge.” To prove constructive discharge, you must prove that your employer made your working conditions so unbearable that you had no other choice but to quit in order to resolve the situation. Usually, you have to show that you tried less drastic means to solve the work problems, such as using an internal appeal process or making complaints to people in the chain of command. A constructive discharge is very hard to prove except in cases of truly egregious harassment. Thus, a resignation might seriously affect your ability to recover for an employer’s discriminatory behavior.
As stated earlier, resignation is a matter of strategy and depends on the facts of your situation and your needs after you leave the company. You must obtain and read all company documents relating to all of the financial issues discussed before you make the offer to resign, and you are strongly encouraged to consult an attorney. Whether to quit a job when you think you might want to take legal action against your employer is too important an issue to be left to chance.
Prospective employers usually ask for references. If you ask them not to contact your former employer, you raise a red flag. A company considering hiring you will probably call your boss anyway, since they don’t actually need your permission to call. So, before you completely cut your ties with your employer, find out what your company would say about you to prospective employers. Then try discussing what information you do or do not want released.
It is not illegal for an employer to give out truthful information or opinions about your work. Do not assume that your employer is prohibited by law from giving more than “name, rank and serial number.”
Write a generic “to whom it may concern” reference letter about yourself and ask your employer or supervisor to sign it or use part of it in their own letter. For sample letters of reference, see our page on sample references.
Be prepared to push for a good letter and also be prepared to discuss changes in the exact wording of the letter. A positive letter of reference can go a long way toward improving your employment future.
Anger is a natural response when you lose something as important as your livelihood, especially if you feel that your termination was unfair or unlawful. However, giving in to your anger only hurts you and hinders your attempts to regain your job or make progress toward finding a new job. Don’t write your employer a letter in which you finally get off your chest all those things you’ve wanted to tell your supervisor or employer for years about the horrible way the company is run and the rotten way you’ve been treated. Such letters never help you, and often hurt. They are usually regarded as confirmation that the company’s decision to fire you was correct and proper.
Do not write anything that could be considered an admission that you deserved to be fired. Don’t accuse others, especially your supervisor or manager, of misconduct or being incompetent. Remember, just about everyone who could actually help you get your job back will be part of management, and they usually stick together. Don’t threaten anyone with physical harm or massive litigation. Examples of harmful threats include:
- “I’ll get you for this!”
- “You’re going to be sorry you messed with me!”
- “I’ll sue you for every dime you’ve got!”
- “You just bought yourself a million dollar lawsuit!”
- “You fire me and I’ll go to 60 Minutes and tell them what really goes on around here!”
Threats will get you nowhere and ordinarily will backfire. A threat of physical violence or extortion might even land you in jail. Likewise, don’t make critical remarks about the company, your boss, co-workers, or anyone else in the company. Disparaging comments and threats will label you a troublemaker and damage your position.
Keeping a record of events that occur in connection with your job loss will assist you in filling out unemployment compensation forms and in pursuing legal action against your former employer, if you decide to do so.
Memories are often inadequate to recall events with accuracy. List the date, time and place of the event and witnesses. If possible, discretely obtain the home address and home telephone numbers of these individuals.
Try to construct a time line and chronology of important incidents. List important conversations – who said what to whom. Pinpoint the dates as closely as possible. Later, when you need to recall dates and events, you will have a fairly reliable source to turn to.
Don’t sign any “release” of legal rights or final “settlement’ of claims until you either consult a lawyer or are certain you understand all its terms. Releases and settlements written by an employer ordinarily contain a lot of terms that protect your employer. They are not written to help or protect you. Remember, these are the people who just let you go. If they want you to sign something, you can be sure it’s for their benefit, not yours.
What is a release? A “release” or “release of claims” is a legal term for a written statement signed by an employee in which the employee gives up all rights he or she may have to challenge his or her termination and/or to sue the company for its past illegal conduct. A release is like an official pardon given to the company for its unlawful behavior. When you sign a release, you give up valuable rights.
While releases and settlements are common when an employer and employee attempt to reach some kind of resolution of their disputes, you should be suspicious of a release or settlement agreement that your employer insists you must sign immediately, without reviewing it or having it reviewed. You will probably need some time to determine if you have a legal claim that you do not want to give up. Don’t be afraid to ask for a week or two weeks to consider and review the release, and if necessary to contact a lawyer for counsel and advice.
For employees over age 40, a release of claims is especially complicated. The Older Workers’ Benefit Protection Act (OWBPA) requires an employer to include certain provisions to make a release of age discrimination claims valid. Some important provisions include the right to consider the release for 21 days before you have to sign it, and the right to revoke the agreement within seven days after the date of signing. If your employer requests a release in exchange for special downsizing benefits that are available to a group of terminated employees, certain statistical information must also be furnished to you. You are strongly encouraged to have such a release reviewed by an attorney before signing it. You should not release the following:
- Future claims. Only agree to release the company from liability for any claims that exist up to the date the agreement is signed.
- Pension or retirement claims.
- Workers’ compensation claims.
- Claims unrelated to your employment with the company or not arising out of your employment with the company.
For more information on the OWPBA, see our page on age discrimination.
Carefully review any “non-compete” agreement or “restrictive covenant” you may have signed at the time you were hired. If you signed such a document, you probably agreed not to accept employment in the future with a competitor or engage in other business activities that could compete with the company. The agreement would specify the length of time and geographical range of the restrictions.
Non-compete agreements are generally valid, enforceable contracts if they are entered into without coercion and if they were executed either (1) at the time of hiring or (2) after the employee had already been hired and the employer was providing some incentive or giving something else of value (in legal terms, “consideration”) for the employee to sign the agreement. Usually, the consideration provided by the employer in the second situation is a raise in pay, the ability to participate in stock options, or a promotion to which the employee would not otherwise be entitled. In many states, an agreement that an employee signs after beginning employment or at the time of termination is not valid unless, as stated above, the employer provides consideration to the employee to enter into the agreement.
Reasonable restrictions on your ability to work in a business that competes with your former employer are usually lawful. Whether the agreement is deemed reasonable ordinarily depends on the duration of the restriction (one year? two? five?); its geographic limits (are you prohibited just within your city or does the prohibition extend nationwide?); and the activity prohibited (contacting customers, using information or special training obtained through your old employment).
A one-or two-year restriction within a small geographic location is common and will generally be upheld. One that lasts much longer or restricts you nationwide may be unreasonable. Unreasonable restrictions are not lawful and will not be upheld in court. A court can, however, modify the agreement and enforce reasonable restrictions on your ability to compete. If you violate a non-compete agreement, your former employer may go to court seeking an injunction or court order to stop you from working for a competitor and also to seek damages for any lost profits you may have caused.
Don’t assume that simply because your agreement seems unreasonable to you that you are free to ignore the agreement completely and accept employment with a competitor. The “reasonableness” of any particular restriction depends on how the court interprets it. Interpretations vary widely from state to state. It is best to seek legal advice to determine whether the restrictions placed on you will hold up in court.
Both you and a new employer may encounter legal problems if you violate such a non-compete agreement. Your new employer may soon be your old employer if you fail to disclose the existence of the non-compete agreement before you are hired. You should tell your new employer about the restrictive covenant and get their agreement to hire you despite the restriction. You may want to consult a lawyer about the validity and reasonableness of your non-compete agreement and the consequences of violating it.
Many release/settlement agreements include a provision which prohibits you from discussing the terms of a special severance package with anyone. Such provisions are common. In most cases you will be prohibited from discussing the terms of your special severance arrangements with your family (spouses excepted), friends and co-workers. In exchange, the confidentiality agreement should also require the employer to keep confidential the terms of the agreement and the circumstances of your discharge.
Confidentiality requirements in settlement agreements are not the same as the duty of an employee not to disclose his ex-employer’s trade secrets and other confidential information. You have a duty under the law to keep and protect your ex-employer’s trade secrets and not to use them for your own benefit.
This is a selection from Job Rights and Survival Strategies by Paul H. Tobias and Susan Sauter.