Termination Series: Communicating the reason for discharge

June 12th, 2018

Do employers need to provide a reason to a discharged employee?

Federal law does not require employers to provide terminated employees with a written explanation for their discharge. However, many states have litigation in place that calls for an employer to provide documentation outlining the reason for termination. This is a called a service letter, and some state laws decree that you give this to the employee immediately upon termination while others only require a service letter to be issued upon an employee’s request.

Be honest and succinct

Regardless of state law, it is usually a good idea to let an employee know why they are being terminated and to keep a record of this information. When conducting a termination, you should honestly state the reason for discharge. The explanation should be factual and brief. In some cases, an employer’s failure to state the true reason for the termination or stating reasons inconsistently has been considered evidence of bad faith or discrimination. 


Don’t try to avoid difficult discharge decisions by classifying the discharge as a “layoff.” Calling a discharge a layoff can be dangerous if a true layoff did not occur as the error may be enough for a reasonable juror to determine the employer’s reason is a pretext for discrimination.

Steer clear of defamation

Avoid giving defamatory or derogatory reasons for termination. This means you should be sure to not communicate a statement to the employee that may injure his or her reputation, especially if the statement may not be factual. A defamation claim typically is comprised of the following:

  • a false and defamatory statement (a statement that injures the reputation or community standing of another person or discourages others from associating with that person)
  • concerning the plaintiff
  • that is “published” or communicated to a third party
  • with fault amounting to at least negligence (some states have not required a showing of fault or negligence if the plaintiff is a private person and the defendant is not a member of the media)
  • and
  • with proof of damages or a presumption of damages to the plaintiff as a matter of law.

An ex-employee may bring a defamation claim if an employer gives information to prospective employers without a release. However, employers should also be aware that a subsequent employer could possibly sue the former employer for negligent referral if the employee commits the same type of wrongful conduct she or he committed at the previous job. Careful consideration should be given to any communication regarding the reason for the termination. 

If the reason for discharge is documented, the documented reason must be the same reason that was stated to the discharged employee in the event that the employee files for wrongful termination. In the event that the termination involves a complicated matter, you may wish to seek legal counsel before drafting a separation notice.