What is an Exit Interview?
An exit interview is typically a meeting between a departing employee and the employee’s manager or human resources professional. The goal is to gain information or provide information, which may help the employer retain employees, or end the employment on better terms.
Exit interviews are generally considered a best practice, for several reasons. Employees tend to speak more openly with employers who have given notice, than they do when they are not leaving. Employers can get valuable, free insight into how to improve their workplace and retain employees.
When the leave is involuntary, the exit interview provides a chance to part on amicable terms. The employer can say nice things about the employee and let them know that they will be considered for re-employment when openings arise. Then former employee may be more likely to speak well of the employer, and be willing to return in the future.
When encouraged by the employer, the exit interview can also off valuable insight into why employees are leaving. The employer can ask if there was something about their job that the employee disliked, if the employee had conversations with their supervisor, or if the employee had other opportunities to improve their job with the employer.
In many cases, exit interviews are not conducted, or are limited to an e-mail or off hand comments. In part, this is because managers or human resources professionals don’t have time to meet with each employee who is leaving, or don’t remember to do so. In addition, when there is a mass layoff, it may be difficult for the employer to meet with each employee before the layoff occurs.
The exit interview may request that employees sign a release or waiver of claims as a condition to receiving a severance payment, and state that nothing in the agreement bars the employee from filing a claim with a government agency, or speaking to an attorney. It may also state that nothing in the separation agreement bars the employee from making truthful statements in on-going litigation.
It is important to the employer to obtain these statements , because perspective plaintiffs in employment discrimination suits often cite the fact that the employer did not conduct exit interviews as part of their evidence that the employer was not acting properly when they terminated the employee.
It is also helpful to speak about other employment opportunities at the employer. The departing employee may want to continue to work on an on-call basis, or certain positions may turnover more frequently than others, providing a chance for alumni to return to work with the employer as needed.
The exit interview provides the employer with valuable insight into whether the employment policies and practices are having the desired effect, and helps the employer to evaluate how they look to perspective employees and the external public.
Point of view of the employer. This is where we talk about how by taking the time to do exit interviews, the employer may actually help minimize the likelihood of future litigation, and make employers aware of potential risk areas.
Point of view of the employee. This is where we talk about how doing the exit interview lets employees know that the employer cares what they think, that if they are unhappy for some reason, they have recourse – such as communicating their thoughts to the higher ups at the exit interview.
Surveys and questionnaires. What form this can take, and how to do it.
Special considerations for larger employers, to conduct an exit interview survey for larger numbers of employees, employers may choose to conduct them using surveys or questionnaires.
Benefits of conducting exit interviews. From the point of view of open communication, on the company’s ability to understand why the employee is leaving. For example, the employer may not know if a certain person has already violated harassment policy or creates an environment some find unwelcoming. Or if there are other disturbing trends.
From the point of view of the employee, it gives them the opportunity to vent, to air their grievances, so that they feel like they have been heard and the issues may be addressed. From an employer’s point of view, it lets them know if there is any substance to the claims being raised, or if it is an isolated incident.
Problems with the Law in Exit Interviews
With any conversation with employees, there are a multitude of legal issues at play. For exit interviews, a few issues are particularly important to keep in mind. These include issues relating to confidentiality, defamation, and invasion of privacy.
I have previously written about why employers should consider obtaining written responses from exiting employees. If you require or permit employees to provide written responses, it is important to keep in mind that both the employee’s responses and all testimonial statements you obtain may be discoverable in subsequent litigation. This is the case even if the employee believes the response is confidential or that he/she has requested confidentiality. This is particularly true for public employees, who by law have no expectation of privacy (and may actually be prohibited from keeping certain information confidential), and for defamation claims, where confidentiality issues are particularly thorny.
One of the most common legal risks in connection with exit interviews is defamation. While offering an exit interview is not itself defamatory, a company becomes liable for a defamatory statement when the statement is published and the statement fails to fall within the scope of acceptable grounds for reference checks. A company may also be liable for defamatory statements made during an exit interview if any disparaging remarks made by an employer or supervisor are relied upon or repeated to any third parties. To protect themselves, employers should create a statement to be read to all exiting employees, so that all employees read the same statement. Even if comments made by other managers deviate from the script, the script should be maintained and used in defense of any claims against the company.
Finally, privacy concerns are also present when it comes to exit interviews. Employees have a constitutional right to privacy under both the California and United States Constitutions. That right gives rise to two important rules of thumb for exit interviews: In addition to these two no-no’s, managers and HR staff should avoid asking questions that do not relate to the employee’s employment. For example, in California, asking about an employee’s political affiliations may open the door to a claim under the Unruh Civil Rights Act.
Finally, as with other employer/employee communications, it is important that exit interviews be held in a private location, and not in public places such as on-site cafeterias, or lobbies.
Rights of Employees n Exit Interviews
As with many other conversations that employers might have with their employees, the individual who is leaving the company also has rights. These rights take the form of the Fair Labor Standards Act protections that nearly every employee working in the United States possesses.
For one, participation in an exit interview is always voluntary for the employee. If they decline to participate, the employer must be careful not to hold that decision against the employee. An employer cannot take any negative job actions against the employee when they leave the company simply because they decided not to participate. While it is clearly inappropriate to hold participation as a condition of severance, remember that participation may also not be a condition of re-employment. Taking negative action against an employee who would previously qualify for re-hire can open the door to legal challenge.
Another way that our employment laws speak to the nature of exit interviews is by allowing employees the right to have legal counsel present. For example, if the employer is attempting to enter into a new severance agreement with an employee during an exit interview, the employee has the right to bring legal counsel. As a practical matter, most employers will be required to perform exit interviews immediately upon termination and that window of time does not allow for either party to bring legal counsel. However, this is not the only type of discussion that can arise from exit interviews.
If the employer is involved in a larger reduction-in-force or other employment termination event, the employer may set up an exit interview with the employee at a later date – typically within the separation agreement. At that point, legal counsel can be present if requested by the employee.
Employer Best Practices
To minimize legal risks associated with exit interviews and the information obtained, it is important for employers to adopt a number of best practices and make sure that managers and other employees who conduct the exit interviews follow them. The following best practices should be regularly distributed to managers and other exit interviewers: These simple yet effective steps will help the employer and the employee keep the last discussion on the job professional and legal.
Advice about Common Mistakes
The most common pitfall for employers during exit interviews is conducting them in an overly informal manner, too close to the time of a termination and without an eye towards what could develop into litigation. Oftentimes, the HR professional conducting the interview goes in hoping to establish a rapport with the departing employee so that he or she can offer a more candid response. Avoid this common mistake. Approach the exit interview like you would any other meeting where there is potential for litigation down the road. You need to exclude your cordial, warm side in favor of the stern, investigative side of your personality.
It is advisable to stop the process of automatically conducting exit interviews all together, and only conduct them when necessary. If the exit interview is being conducted because the employer has a true concern of a possible lawsuit, try to carefully consider whether it is really worth it or not. By conducting the exit interview without a clear need for it, the exit interview could result in the very litigation which the employer was trying to prevent in the first place. For example , by discussing the possible merits of a federal age discrimination claim, the employer would give the former employee something to work with to help her support a claim of age discrimination. Seeing the former employee for the first time since the employment relationship could also be considered intimidating by the employee, causing the employee to confess to more than he should have, were the interview conducted in a more casual setting.
Finally, an employer cannot be too lax in its efforts to maintain confidentiality, or too stringent in assuring confidentiality. The former employee may view the exit interview as an opportunity to plead his case. He knows that if he is successful in arguing that he was wronged, he will be entitled to more money than the severance he has been offered. It is also possible that the employer may convince the former employee that she does not have a good case, in which case she will accept the severance that is offered. In either case, a signed confidentiality agreement could increase the chance of successful negotiations and decrease the likelihood of litigation.
Examples and Scenarios
Here are a few notable cases that highlight the importance of taking legal considerations seriously throughout the exit process:
CASE 1: US v. Nissan
In one of the most impactful exit-related lawsuits of recent memory, the federal government sought $900 million in reparations from Nissan in 2017. The government accused the automaker of sabotaging its own plan to pay $112.5 million in back wages due to 700 employees because the company believed it could afford only $112.5 million in wages as opposed to a penalty near $1 billion. Under normal circumstances, this might have been a case of pursuing the money that was owed while actually settling the claim for far less. However, the federal government was highly motivated to squeeze every dollar it could out of the Nissan case because the duty of the employees in question impacted airbag design and manufacturing. A $900 million settlement "Thus far in the case, we were able to obtain an order permanently barring Nissan from committing future I-9 violations, securing monetary relief for Nissan’s current and former employees, and ensuring that all affected workers are treated fairly. We have also been able to resolve the claims of all but three of Nissan’s current and former employees in this class action, so far without the need for a hearing on individual claims of discrimination or back pay." Simply put, if the exit interview process is done poorly such that the government is involved, it can result in extreme penalties.
CASE 2: The 2008 Financial Crisis
During the 2008 Financial Crisis, thousands of businesses across the U.S. folded, resulting in numerous exit interviews that businesses had no choice but to administer. Dolley v. CAMICO, Inc., a class-action lawsuit filed against California-based Camico Insurance Company, offers a case study in class action strategy. The suit, involving 19,000 insurance brokers, alleged misuse of accounts, deceptive practices, misrepresentation, and unfair business practices. The brokers argued that the company had failed to notify them about a huge rate increase (27%) when the company transitioned from a provider of primary liability coverage to an Excess & Surplus Lines company. The case was ultimately settled for $1.475 million in 2012, a hard-won victory for the insurance brokers who had to band together to protect their interests against a company that was holding a substantial amount of buying power. While this case is quite different than what the exit interview might be, the high stakes involved highlight the sort of undesirable situation that might be avoided if the exit interview is dead-on-balls accurate. In this case, multiple lawyers and law firms probably made a lot of money at the expense of both the company and the insurance brokers. If the lawyers had not been forced into an adversarial situation, perhaps they could have achieved a more fair and balanced outcome.
The takeaway from these two cases is clear: absence of an action plan may not be nearly as bad as having that plan in place and then failing to execute the strategy with absolute precision.
Summation: Practical and Emotional Considerations
While exit interviews can be valuable tools to gather information and learn from departing employees, they must be conducted with care. In particular, HR executives need to be cognizant of their duty to treat the employee in a respectful and fair manner. This means that exit interviews need to be carefully planned and executed by people skilled in the different statutes and regulations that govern the employment relationship. The exit interview needs to be one step in a larger severance process. It also requires balancing legal concerns with the human element of the employee’s experiences and reflection on the employer’s actions and decisions.
Thoughtful and secure practices relating to exit interviews can assist employers who want to reinforce positive relationships with former employees , learn what went right or wrong during the employment relationship, or protect themselves against future lawsuits. But employers need to keep in mind that part of any exit interview process needs to be a consideration of how to treat the employee to avoid potential claims.
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