How Not to Fire People

Recently, the tech world has been buzzing with recent corporate blow-ups involving high level executives. Indeed, recently, Carol Bartz, the then-CEO of Yahoo, was fired over the phone and subsequently publicly denounced her boss as a “doofus”. As reported in Canadian Business magazine, Michael Arrington’s recent spat with his former employer, AOL, also went swimmingly. Both high-profile terminations had an effect on the employers.

Bartz mainly damaged her own career prospects, but her public outburst reflected poorly on the company. The incident almost certainly hurt employee morale, riled activist investors and added to Yahoo’s legal fees.

Less than a week later, Michael Arrington, founder of influential Silicon Valley blog TechCrunch, hinted via Twitter at discord in parent company AOL while taking his leave of the organization. No profanity this time, just innuendo, but potentially just as damaging.

In my relatively short career as an employment and labour lawyer, I’ve learned that employees who are terminated fairly and with respect generally don’t sue or make a public scene. In both of the cases, the news reports appear to indicate that respect was lacking on both sides. The solution? If you have to fire an employee – do it in person, do it gently and for high-profile employees, think seriously about offering a reasonable amount of money in exchange for their contribution, an iron-clear release and a strict confidentiality undertaking. Regardless, in Canada (unlike in the US), employees are entitled to some notice (or pay in lieu thereof). Paying a fair of amount of notice can be much cheaper and less destructive than publicly litigating a termination.

Comments

  1. How come so many Canadian magazines and newspapers almost always refer to US employment law when counselling Canadian employers ? The differences are not simply money for notice. Could it be that the audience pines away for the more relaxed regulatory employment and labour environment of the US ?

    With regard to this column, follow the advice for termination to a T but add 10%-20% to the total and the problem goes away. This is very effective for non-union employees. There are relatively few instances where the courts have forced an employer to reinstate an employee for whatever reason(s). And counsel will tell the “aggrieved” party they are fortunate. In the US and Canada for “employees” in uppermost reaches it is not common to skimp, rather go overboard, as witnessed almost daily in the business press, and don’t skimp when the concern is failing

  2. Gabriel Granatstein

    Thanks for the comment Rick. I do agree. With regard to magazines always quoting US law… yes.. it’s a recurring issue! They can just call me..