Richard Rabin Speaks with The Hedge Fund Law Report on Reducing Risk Before Firing an Employee
Akin Gump labor and employment partner Richard Rabin has been quoted by The Hedge Fund Law Report in the article “Best Practices for Fund Managers to Mitigate Litigation and Regulatory Risk Before Terminating Employees.” Rabin outlines several steps fund managers should take prior to firing any employees.
Before terminating anyone, Rabin suggested that managers revisit their form agreements to make sure they are compliant. Doing this annually, he said, is warranted because, “templates managers had in place a few years ago are simply outdated and almost invariably are non-compliant in this rapidly evolving regulatory environment.”
Rabin said another reason to revisit the policies is to make sure they reflect actual practices. “Don’t say you are going to follow a certain policy or protocol unless you can absolutely commit to doing so,” he advised. “Less is definitely more in a lot of ways.”
When discussing job performance, particularly when it comes to negative feedback, Rabin said managers need to be clear about how employees can improve so they are less likely to be surprised upon termination and then file a lawsuit. To that end, he suggested that processes are in place to deliver formal annual or semi-annual reviews to employees.
Rabin also proposed that fund managers send a follow-up e-mail to employees documenting feedback in writing. “This captures that a meeting occurred,” he said, “and keeps an employee from being able to deny it later, while also avoiding an unduly confrontational tone.”