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How to terminate an employee

by William Malamon, ABC


Dismissing employees often causes physicians emotional stress and discomfort. You may have known the employee for years. He may also be a patient. You may live in a small community and will likely see that former employee, or his family, around town.

Added to this stress and discomfort is the fear of the legal repercussions that may ensue when the employee is terminated. Employment practices lawsuits — alleging acts such as harassment, discrimination, or wrongful termination — can be expensive to settle and defend.

In addition to these legal considerations, physicians face unique issues when terminating an employee, such as the possible need to treat a former employee because of a physician shortage in the area. There are steps that physicians can take  to make terminations as painless as possible and to avoid employment practices lawsuits.

The Texas Workforce Commission (TWC) recommends a range of disciplinary measures before termination, including:

  1. “oral and written warnings,
  2. probation,
  3. suspension with or without pay,
  4. disciplinary pay cuts (It is best to make this a token amount of one or two percent. Do not impose a cut without a prior written warning and give notice of the cut in writing.)
  5. demotion or reassignment,
  6. final warning, and
  7. discharge.” (1)


You may consider implementing an improvement and disciplinary procedure. This will help employees (who are willing and able) to improve their performance. Physicians do not have to think of this process as the next step to termination, but as a flow chart that allows chances for improvement before arriving at a final decision.

Some employees, however, are unable or unwilling to improve their performance regardless of the efforts you take to help them. For these employees, this process will advance the steps to termination.


An important part of the disciplinary process is documentation. Matthew Hughes, an employment practices attorney from Houston, says that it is wise to document violations committed by employees. Similar to the medical professional liability arena, good record keeping can help you become more defensible in the event of a claim. If the employee fails to improve his or her performance, continue to document the poor performance and demonstrate that there was an escalation of events that led to discipline.

The TWC outlines the following when documenting disciplinary action:

  • “The employee should get a copy, and a copy should go into the personnel file.
  • Have the employee or a witness sign and date the warning, and have a company representative sign and date it as well.
  • The warning should clearly let the employee know what the next step will be if the problem continues.
  • The employer should follow its own policy and prior warnings as closely as possible, unless there is a compelling reason not to do so; do not issue warnings until the company is ready to take action and mean it; warnings that are not enforced are even worse than completely ignoring a problem.
  • Do not issue a ‘final warning’ until and unless the company is ready to terminate the employee upon the very next occurrence of the problem that caused the warning to be issued.” (1)


If you are ready to give the employee a final warning, the TWC provides a checklist before you move forward with a termination.

  • “Was there a specific incident close in time to the discharge?
  • Can the employer show that the employee violated a known policy or law?
  • Are witnesses available?
  • Does the employer have documentation to support its reasons for termination?
  • Did the employee progress all the way through the disciplinary system?
  • Was the employee confronted with the problem and given a chance to explain?” (2)


“On __________, you were given a written warning concerning excessive personal phone calls while on duty. You were told that while the company allows personal phone calls for emergency reasons, such calls do not include conversations lasting several minutes with friends and family. We reminded you that your coworkers have to shoulder the burden of extra and unnecessary work when you make yourself unavailable to do your job by talking on the phone under such circumstances. Since that time, you have been observed on ____ occasions engaging in personal conversations on the phone while on duty, which is in violation of your previous warning.

This is your final warning. There will be no further chances given. If you violate the Company’s phone call policy again, you will be subject to immediate dismissal from employment. We sincerely hope it will not come to that, but you must understand that you have arrived at this point by your own actions, and it is only by following the phone call policy that you will be able to remain employed.

I understand that my signature on this form does not necessarily mean that I agree that I did anything wrong, but rather only that I have seen this warning and have had it explained to me.” (1)


The TWC also includes a checklist of items that deal with areas of discrimination and protected activity. Termination in relation to any of these issues could lead to lawsuits.

“Discrimination issues:

  • does the employee belong to a protected minority? (depending upon the state, the most common minority categories are race, color, religion, gender, age, national origin [including citizenship status], and disability; a few states include sexual orientation, veterans status, and others)
  • was the treatment given to the employee different from that given to non-minorities?
  • was the treatment given to the employee different from that given to other workers in general?


  • involvement in a claim over wages, workers’ compensation, or discrimination?
  • jury or military duty?
  • voting?
  • refusal to commit an illegal act?
  • inquiring about the legality of an instruction from the employer?
  • ‘whistleblowing’?” (2)


When you decide to terminate an employee, Mr. Hughes offers the following “smart practices” to follow for termination meetings:

  • Hold the meeting in private, away from where other employees could hear.
  • Attempt to hold the meeting after other employees are gone.
  • Do not use this meeting as a time to settle scores or be vindictive.
  • Do not march the former employee out of the office in front of other employees.
  • Cause the former employee as little embarrassment as possible.
  • Do not make the termination a reason for the employee to file a claim.
  • According to Mr. Hughes, do not “use a termination meeting to counsel or argue with an employee. You should use the meeting only to terminate.” Mr. Hughes also explains that the “decision to terminate should have been already made. Explanation could be perceived as pretext.” (Pretext is a reason given in justification of a course of action that is not the real reason).  


Final pay is often the last contact between former employee and employer. Texas has strict rules concerning final pay and the time it should take to occur.

According to the TWC, “In the case of an involuntary work separation (discharge, termination, layoff, ‘mutual agreement,’ and resignation in lieu of discharge), the employer has six calendar days from the effective date of discharge to give the employee the final paycheck; if the sixth day falls on a day on which the employer is normally closed for business, the employer may wait until the next regular workday to give the employee the final check.” (3)

For more information on final paychecks visit the TWC web site — — and search “final pay.”


From the first disciplinary action to the final paycheck, the process of terminating an employee is not pleasant. You would much rather spend time treating patients than going through the emotional drain of counseling and disciplining employees.

As a TMLT policyholder, there is good news. All TMLT policies include employment practices liability insurance (EPLI) coverage. Limits of liability and yearly aggregate limits are $50,000 per claim (including both defense and indemnity payments) with a $5,000 deductible. Increased limits are available for purchase.

As part of TMLT’s EPLI coverage, TMLT policyholders now have access to general information about employment and human resources issues to help prevent employment practices claims. This resource is called EPLI Pro, and the information can be accessed on the TMLT members-only web site.

You may also refer to Understanding Your EPLI Coverage, a publication that provides more information about EPLI coverage and includes details on the rules and laws that govern employment practices.

If you are not a policyholder and want to learn more about our EPLI coverage, call our sales department at 800-580-8658, ext. 8603.


  1. Texas Workforce Commission. Discipline. Available at Accessed February 18, 2013.

  2. Texas Workforce Commission. Termination Checklist. Available at Accessed February 18, 2013.

  3. Texas Workforce Commission. Final Pay. Available at Accessed February 18, 2013.