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Bad Hire: Can You Un-Hire a Employee Who Should Never Have Been Hired?

badhireEvery business manager, at one point or another in the company’s life cycle, has probably had at least one moment regretting the hire of a particular employee.  However, bad hiring decisions tend to go on unremedied because of the hassle of firing and re-hiring.  Business managers often grapple with and feel guilt with firing employees, and the annoyance of putting out employment ads, interviewing, hiring, and training can cause the bad hire to remain with the company even though they may lack skills, experience, training, a positive attitude, or are affirmatively impeding the growth of the business.  Business managers then find themselves rationalizing the situation and convincing themselves that with some training, a talk, and some positivity, that maybe things will get better.  That rarely pans out. What can you do then?

Better Hiring Practices

The best way to avoid the time, expense, and hassle of un-hiring a bad hire is to change hiring practices. Most employers tend to make hiring decisions by picking the best choice out of the resumes received based on the candidate’s personality and subjective perceptions of whether they will do a  good job. This approach, however, often results in hiring mistakes, as candidates who are merely “acceptable” end up getting the job, when there may be better fits in the market. Some businesses may even feel discouraged that finding top talent is out of reach due to the industry, location of the business, or salary/wage range.

Resisting the Urge to Hire “Acceptable”

The problem with hiring “acceptable” employees rather than continuing the hiring process until a good match is found, however, is the enormous toll it takes on the business. Aside from the fees and payments of salary, tax withholdings, unemployment insurance, worker’s compensation expenses, and other financial expenses, a bad hire can wreak havoc on the morale of the company – especially small businesses – and worse, result in lost business or missed opportunities.  Bad hires can upset or offend clients/customers, create discord in the office, or undermine the authority and leadership of the management vis-à-vis the employees.

Firing a Bad Hire

Is it possible to fire an employee that did not work out? Yes. California is an at-will employment state, meaning that employers can hire, fire, demote, promote, etc. employees at-will, meaning, for any time, for any reason.  However, if the worker is over 40, or of diverse background, nationality, skin color, gender, sexual orientation, maternity status, or fits into one of the other protected categories delineated in California’s fair employment and housing laws, the employee could raise claims against the company if perceiving that the firing was based on one of the unlawful reasons. Even if their claims have no merit, you could still face legal fees and a headache. The safest approach is often to effectuate a performance improvement plan for the employee, which will justify a termination decision if the employee does not improve.

“It’s Not You, It’s Us.”

Whatever you do, you should not take the approach that the firing is being done because of something other than employee’s performance.  This is counterintuitive, but often the approach taken by conscientious managers or business-owners, who value the employee’s filings, and do not want to cause necessary upset by the termination. As a result, managers or businessowners often blame the market conditions, financial health of the company, or tell the soon-to-be-terminated employee that the Company is reorganizing, changing focus, or that the employee is being laid off. The problem is that saying things like to soften the blow can be one of the worst things to do in terms of protecting the company from claims by the employee.  If the termination is being done because of the employee’s performance, it is critical that this be documented somewhere in the employee’s files and made a part of the termination notice to the employee.

AXIS Legal Counsel’s Business and Corporations Practice provides legal advice to numerous businesses with a variety of legal matters involving employees and labor law. We can assist in establishing compliance with California’s Employment and Wage & Hour laws, employee handbooks, leave policies, promotions, demotions, terminations, payroll matters, and other employment requirements.  AXIS offers full-service legal support to businesses and companies, and can also assist your company with business formations and governance, contracts, deals, and transactions, administration & operations, risk management / insurance,  labor/employment matters, intellectual property, healthcare, crisis management, directors/officers, private/data security, technology, statutory/legal compliance, and business litigation when disputes with other businesses arise.

For information on retaining AXIS Legal Counsel to represent your business in connection with any legal matter, contact [email protected] or call (213) 403-0130 for a confidential consultation.

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