How to Fire a Relative Without Getting Cut Out of the Will

Date: November 25, 2013

Five rules to live by when terminating the employment of a relative

As COO of Distinctive Life Funeral Homes in Houston, Jeff Friedman knew he needed a new management team to keep the business strong. No problem: All he had to do was fire his mom and dad. "The worst part is that it was right before Thanksgiving," Friedman recalls.

It’s never easy to let an employee go. In a family business, it can be that much harder to cut the cord. Emotions can cloud the process. Suspicions of favoritism or spite can sour the atmosphere. Legal structures of ownership and share-holding can complicate the matter.

In short, firing family is a potential minefield, one that must be trodden with considerable care. Here's how:

1. Keep it brief.

For Friedman, dismissing his parents meant taking bold measures. "I had to rip the Band-Aid off quickly and accept the sting that was going to come with it. No need for senseless fluff, I just had to get to the point quickly," he says. The direct approach, combined with honest empathy, seems to have worked, preserving both the business and the COO’s status as favorite son. "It only took a couple of months before my mother came to me and explained that, after seeing all the changes, she knows I made the right decision," Friedman says. "The fact that I was able to fire as a boss and comfort as a son made all the difference in the world."

RELATED: End-of-Employment Checklist – Covering All the Bases When Firing an Employee

2. Read the fine print.

Before firing a family member, "the first thing to do is to review any legal documents related to the employment of the relative. Is there something in the documents that requires just cause to terminate, that requires that certain relatives have ownership or other rights now or in the future? Many families have protected their relatives in these kinds of agreements," says Arlene Vernon, an HR consultant in Eden Prairie, Minnesota. This may not be an ordinary firing; make sure your legal ducks are in order.

3. Follow procedure.

In any "regular" firing, you'd follow a certain protocol, instituting progressive discipline from verbal caution to written warning to termination. You’d document every step of the way, charting what you had done and why. When firing family, this basic strategy must be obeyed to the letter, says Nathan R. Mitchell, founder of the leadership-development company Clutch Consulting in Tulsa, Oklahoma. You may face legal challenges down the line, claims that you acted out of favoritism on the one hand, or personal animus on the other. Cover yourself by acting exactly in accordance with policy.

4. Get objective help.

Any time there is family involved, someone may claim subjectivity—decisions made based on personal feeling rather than business need. (And who knows? It could be true. Are you sure this isn't some childhood grudge playing out?) In any case, one safeguard is to get neutral input. Have an outside lawyer watch over the proceedings. Have an employee from outside the family take part in the process leading up to the firing. These independent players can help ensure your own objectivity.

RELATED: How Much Should I Pay for a Lawyer

5. Keep it in the office… or don’t.

If the family has established a (healthy) tradition of keeping work in the workplace, then a firing should follow the same rules. Don’t bring it home. And when the cousins start to grouse, remind them that this conversation belongs in the office. If, on the other hand, the family is accustomed to mulling over business matters at the dinner table, don’t try to push a firing aside. Let people have their say, perhaps even bring them together for a family meeting, just as you might with any other business matter, if that is the established pattern.

READ NEXT: Could You Run a Successful Business With Your Ex? This Couple Did.


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