As a business owner or employer, you may be wondering whether you should give your employee a letter at the time you terminate his/her employment. Although this is a best practice, here are some practical considerations:

Legal Considerations

From a legal perspective, you don’t need to provide a reason for termination unless one is requested. In that case, you have 10 days to provide the reason based on Minnesota law.

Practical Considerations

From a practical perspective, a conversation at the time of termination is often quickest and easiest. Drafting a letter takes time, and often your time is limited when you are

  1. determining the full consequences of the employee’s misconduct,
  2. preparing for the termination conversation,
  3. involving other employees to help with responsibilities of the employee who is about to be terminated, and
  4. trying to act quickly.

After the termination conversation, you always have the option of following up with a letter if helpful.

If time were not a factor, it would be best to have a letter that lists the reasons for termination and provides a copy of a signed contract or employee handbook, if any. In cases of serious cases or complex circumstances, I would draft a letter with these parts:

  1. Directly Address the Contractual Breach: Clearly state the sections of the employment contract and employee handbook, if any, that the employee has violated. This could include noncompete clauses, confidentiality agreements, and any specific prohibitions on soliciting customers or promoting competing products.
  2. Include Evidence: Consider attaching evidence of the violations, such as testimonies from other employees, records of the employee promoting their business, or screenshots of their website offering competing products.
  3. Refer to Legal Consequences: Remind the employee of the legal obligations under the contract and the potential consequences for breaching those terms. This can underscore the seriousness of their actions.
  4. Attach the Signed Contract: Include a copy of the signed contract with highlighted sections of violated clauses to reinforce the contractual obligations the employee agreed to.

Of course, every situation is different. So it’s always good to consult with an attorney who

  • knows your local laws and
  • can take the time to analyze your unique situation.