When HR Should Act To Save Money

Phillis Dewitt was fired from her job as a nurse. The hospital maintains it was due to insubordination. Dewitt claims it was because her husband was dying of prostate cancer and costing the hospital a boatload in insurance claims.



Obviously, I wasn't involved in any termination discussions, but I imagine HR was. And perhaps they were overridden in any objections, but this is a situation where HR needs to be assertive and lay out the problems with a termination in this situation.



1. Employment in most situations (and no union was mentioned in the article) is at-will. This means that you can quit or be fired whenever. No warning. No severance. No notice. In practice, this hardly ever happens. The hospital had a practice following a formal disciplinary protocol. This was ignored in Dewitt's case. HR should say, "We understand that she was insubordinate, but we have to treat everyone the same."



2. Managers, even ones with medical knowledge, should not be suggesting that someone's spouse enter hospice care. Hospice is end of life care. It is deciding that it is time to let go and not attempt to prolong life. The manager claims she was trying to be compassionate. I would buy this if she didn't turn around and fire Dewitt for not coming in for a meeting while she was on a scheduled vacation. HR should say, "We understand that you believe they are making the wrong choices and that those choices are costing the company money, but this is not an area which you should be involved. If her performance suffers, then we'll talk about how to handle this. But, you are not to attempt to influence medical decisions."



3. Except in extreme circumstances, employees can opt for COBRA to continue their health coverage. Which Dewitt did. Therefore, the company only saved the $900 a month that Dewitt paid in, to keep coverage that was costing over $100,000 a year. HR should say, "You realize that this termination is highly suspect and will not save the company any money due to COBRA anyway."



4. For the reasons above, this termination is a law suit waiting to happen. The reality is, whether the hospital was legally justified in terminating this employee, HR should have brought the following information to the attention of the decision makers:

The termination did not follow policy.

The employee is highly likely to sue.

Lawsuits, whether successful or not, are very expensive. Expect to spend several hundred thousand dollars defending a lawsuit of this nature.

The employee is highly likely to opt for COBRA, therefore the savings you hope to achieve by termination will not happen.

This termination is a knee-jerk reaction to a financial problem. Any proposed solution will end up costing more than allowing the employee to continue working.

This is a public affairs nightmare. This is the type of story the media will pick up on. This will go public.

Any HR person worth her paycheck should have been able to present the above. Sure, she could be overridden (and I hope HR did the above, because otherwise they don't deserve to be respected).



This is a situation where keeping the employee working is actually cheaper than the "cost-saving firing." This is true even if Dewitt deserved to be fired. I certainly can't speak to that, but there are costs to terminating people that HR should understand.



(Via The Happy Hospitalist.)