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Guidelines for terminating nonprofit employees

Terminating an employee is one of the most difficult tasks for any employer. It's also one of the riskiest because it can raise legal issues. That's why it's critical to know the law and have termination protocols in place — especially if you don't have HR professionals on staff.

Types of termination

There are two types of termination: voluntary and involuntary. In the former, the employee chooses to resign, be it for a new job, retirement or other reasons. In the latter, the employer initiates the termination, typically due to one of the following:

  • Organizational change: layoffs and staff reductions due to budget cuts or other reasons
  • Unsatisfactory performance: failing to perform job functions or meet established goals or other performance issues, such as excessive absenteeism
  • Misconduct: violations of the organization's code of ethics or inappropriate conduct, such as insubordination (refusal to perform) or insolence (being rude or disrespectful)
  • Unlawful conduct: violations of the law, such as sexual assault, theft, workplace violence, or copyright or patent infringement

In some cases, a notice period is given before an involuntary termination. In other cases, advance notice isn't possible.

Applicable laws and protected categories

If your nonprofit operates in a state that allows firing "at will," you can fire someone with or without cause as long as you don't violate any oral or written contracts, public policies or covenants of good faith. But even so, it's wise to cite a business reason for termination. This will help protect your organization should the worker file a complaint or suit claiming illegal termination.

Federal antidiscrimination laws prevent terminating an employee based solely on sex, race, religion, age, national origin, pregnancy, military service, marital status or disability. In addition, the Americans with Disabilities Act (ADA) requires employers to provide reasonable accommodations to employees with disabilities to enable the performance of essential job functions — as long as the accommodations don't create an undue hardship for the employer.

In this context, note that alcoholism is considered a disability. Although the ADA considers a leave for alcohol rehabilitation a sufficient and reasonable accommodation, the law doesn't require employers to tolerate relapse or consistent refusal to obtain help when given the opportunity.

Similarly, Title VII of the Civil Rights Act requires reasonable accommodations for religious beliefs or practices, including holy day or Sabbath observances and religious clothing requirements.

Also, employees may not be fired for a whistleblowing act or filing complaints of discrimination or harassment. State laws may add other protections, such as prohibiting termination based on sexual orientation.

Many employers believe they can't dismiss employees who fall under one of these categories or that these employees are owed preferential treatment. Neither is true. You may fire poor performers in any category — but should exercise extra caution where protected categories (including accommodations) are concerned.

Personnel policies and procedures

Written personnel policies and procedures can provide clarity regarding termination and prevent negative repercussions, such as wrongful termination lawsuits. But be sure to keep the information in your policies and procedures current. Personnel policies and procedures can do more harm than good if they're outdated, inconsistent with state or federal laws, or written in a way that may be construed as a contract.

If your nonprofit keeps personnel policies and procedures in an employee handbook, include a prominent disclaimer indicating that the handbook doesn't create contractual rights.

Disciplinary policies and documentation

Some organizations follow a progressive disciplinary policy, which may include coaching, counseling, and verbal and written warnings. If your organization has such a policy, be sure to adhere to this process or provide a valid reason for failure to follow your own policy.

Even if your nonprofit doesn't have a formal disciplinary policy, it's wise for managers to document specific instances of poor performance or misconduct as they occur. This provides a paper trail should issues such as unjustified unemployment claims or discrimination complaints arise.

Before terminating an employee, ask these questions:

  • Do you have documentation indicating the employee understood job expectations?
  • Did the employee fail to meet these expectations?
  • Was the employee informed of unmet expectations along the way?
  • Was the employee given a reasonable length of time to remedy the situation?
  • Have you followed all termination protocols as stated in your organization's employee handbook?

If you answer "no" to any of these questions, seek guidance from an employment attorney.

Bear in mind that many issues can impede job performance, from a lack of job skills to illness. For example, one HR manager had an employee who kept falling asleep on the job. As it turned out, the employee had a sleeping disorder that was corrected after proper diagnosis and treatment. Bottom line, in some situations poor performance can be remedied through medical care, continuing education, a shift in job duties or other solutions — and prove more beneficial than termination in the long run.

Termination procedures

Given the potential legal ramifications, it's wise to consult an employment attorney when establishing termination procedures and before initiating the termination process for a particular employee.

Best practices are as follows:

  • Schedule a meeting with the employee in a private setting. Include two organization representatives in the meeting — one to conduct the termination and another to serve as a witness and take notes. Include a lawyer if the employee is or has been hostile.
  • Explain honestly and clearly why the employee is being fired and when it takes effect — such as immediately, at the end of the day or at the end of a notice period. Be careful to remain calm and treat the employee with dignity. Avoid small talk or negotiation.
  • Present relevant paperwork. Provide a copy of the separation notice and details about unemployment benefits and the final paycheck. Get the employee's signature on the termination documentation. If the employee refuses to sign, indicate so on the documentation.
  • Make a plan for collecting personal effects. You may ask the employee to gather his or her personal effects immediately after the termination meeting or give the option to clear his or her workspace outside of normal business hours.
  • Allow the employee to have an exit interview (if appropriate). This provides an opportunity for the employee to provide feedback about the organization, colleagues and the job itself.
  • Disconnect all electronic and physical access to the workplace before the employee leaves for the last time. This includes keys; key cards; company-issued credit cards and electronic devices; and passwords to computers, programs and software. Also remove the employee's name from your organization's website, email lists, directories and other listings.
  • Escort the employee to the building exit. Don't allow the employee to walk out alone.

Following these best practices can help ensure that terminations are handled legally and professionally.

This article draws on the expertise of Grace Davies, a Minneapolis-based attorney with special interest in product liability, medical malpractice and employment discrimination.



MissionBox editorial content is offered as guidance only, and is not meant, nor should it be construed as, a replacement for certified, professional expertise.



Human Resources 4U: The correct way to terminate an employee by Noah Green, Kelly Ryan and Martin Levy

The Chronicle of Philanthropy: How to legally — and humanely — dismiss nonprofit employees by Alicia Abell (2003)

The New Social Worker: Hiring, evaluation and firing by Gary Grobman



Seasoned writer covering a spectrum of industries, including nonprofit, financial services, health care, insurance and technology