Employee Offboarding

Overview

Properly offboarding employees is just as important as hiring them. A clear and consistent offboarding process protects your business, ensures compliance with California law, and reduces exposure to wrongful termination, wage-and-hour, and retaliation claims. A respectful and organized exit also preserves workplace morale and protects your company’s reputation.

This section outlines best practices for involuntary terminations and voluntary resignations, and explains how to properly use The Guide’s offboarding forms to document the process and minimize legal risk.



Wrongful Termination: Legal Risk Overview

Wrongful termination occurs when an employee is separated in violation of their legal rights. In California, even at-will employees may bring claims if the termination is unlawful.


Common wrongful termination theories include:

  • Discrimination based on a protected characteristic (e.g., race, sex, age, disability)

  • Retaliation for reporting misconduct or exercising legal rights

  • Breach of an employment contract or implied promises

  • Constructive discharge caused by a hostile or abusive work environment

Key point: At-will employment is not a defense to unlawful motivation or improper process.


Red Flags to Review Before Termination

Before proceeding with a termination, employers should pause and assess whether any of the following risk indicators are present:

  • Termination closely follows a complaint, leave request, or accommodation request

  • Inconsistent discipline compared to similarly situated employees

  • Lack of written documentation supporting the decision

  • Prior promises of job security or progressive discipline

  • Escalating conflict suggesting constructive discharge

If one or more of these factors is present, additional review is strongly recommended.



Acceptable Reasons for Termination

Legitimate, non-discriminatory reasons for termination may include:

  1. Poor performance or lack of productivity

  2. Insubordination, dishonesty, or policy violations

  3. Attendance issues (when consistently enforced)

  4. Theft, fraud, or other criminal conduct

  5. Harassment or discriminatory behavior

  6. Workplace violence or threats

  7. Drug or alcohol use during work hours

Reminder: The stated reason must be truthful, supportable, and consistently applied.


Severance Agreements

A severance agreement is a voluntary contract in which an employer provides compensation or other consideration in exchange for a release of claims. 

Severance agreements are commonly used to reduce litigation risk and facilitate a clean separation.


When severance is offered, employers should use The Guide’s “Confidential Employee Termination and Settlement Agreement”, which includes:

  • A release of known and unknown claims

  • Confidentiality and non-disparagement provisions

  • Required waiting and revocation periods

  • Compliance with California and federal law (including OWBPA for employees age 40+)

Employees should be encouraged to review the agreement with legal counsel before signing.


Termination Do’s & Don’ts

DO:

  • Stick to documented, factual reasons for termination

  • Use calm, neutral, and professional language

  • Keep the meeting brief and respectful

  • Have all paperwork prepared in advance

  • Ensure final pay is ready and accurate

DON’T:

  • Argue, debate, or justify the decision emotionally

  • Reference protected characteristics, complaints, or leave

  • Make promises about future employment or benefits

  • Apologize in a way that implies wrongdoing

  • Say anything inconsistent with written documentation

Rule of thumb: Assume everything said in the meeting will be repeated in a deposition.


Involuntary Termination Procedure

Step 1: Document the Basis for Termination

  • Before separation, gather and organize all records supporting the decision, including performance reviews, warnings, attendance records, and investigation materials. 

  • Even for at-will employees, documentation is essential to defend against claims.

Step 2: Prepare the Termination Letter

Use The Guide’s “Termination Letter” to formally confirm the separation, including:

  • Effective date of termination

  • Reason for termination (if stated)

  • Final pay and benefits information

  • Return-of-property obligations

This ensures consistency and creates a clear record.

Step 3: Plan and Conduct the Termination Meeting

  • Conduct the meeting in person whenever possible (Zoom if necessary)

  • Hold the meeting in a private, confidential setting

  • Have a neutral witness present (manager or HR representative)

  • Clearly communicate that the decision is final

  • Avoid unnecessary explanations or commentary

Step 4: Provide Required Documents

At the termination meeting, provide the employee with:

  1. Termination Letter

  2. Final Paycheck and Final Paycheck Acknowledgement (confirming receipt of all wages and accrued vacation)

  3. Severance Agreement, if offered

Use The Guide’s “Final Paycheck Acknowledgement” to document compliance with California’s strict final pay laws.



Voluntary Resignation Procedure

Step 1: Document the Resignation

When an employee voluntarily resigns, have them complete The Guide’s “Resignation Form”, which:

  • Confirms the separation is employee-initiated

  • Documents the last working day

  • Reduces disputes over separation classification

Step 2: Secure Company Property and Access

Immediately:

  • Collect company equipment, keys, and devices

  • Disable access to email, systems, and platforms

  • Protect confidential and proprietary information

Step 3: Final Pay and Closing Documents

Provide the employee with:

  1. Their final paycheck

  2. Final Paycheck Acknowledgement

  3. A severance Agreement only if one is voluntarily offered


Arbitration Agreements

If the employee previously signed The Guide’s California Employment Arbitration Agreement, ensure it is retained in the personnel file and referenced consistently. Arbitration agreements govern where disputes are resolved—not whether claims can be brought.


Key Takeaways for Employers

  • Termination risk is driven by process, timing, and documentation

  • Final pay compliance is mandatory and time-sensitive

  • Severance agreements must be legally compliant to be enforceable

  • Standardized forms reduce errors and inconsistency

  • A professional offboarding process protects both the business and its reputation