Don’t embellish reasons for firing — Business Management Daily: Free Reports on Human Resources, Employment Law, Office Management, Office Communication, Office Technology and Small Business Tax Business Management Daily

Don’t embellish reasons for firing

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in Firing,Human Resources

When a financial services firm terminates an employee, it must file a Form U-5 outlining the reasons for the firing. While those statements have some immunity, the immunity dissolves if the fired employee can show the statements were malicious.

That's what happened when a former compliance director claimed that his U-5 included false and derogatory statements. A federal district court upheld an arbitration panel's $100,000 punitive damage award, plus $40,535 in compensation and interest. (Acciardo v. Millennium Securities Corp., 99 Civ. 3371, S.D. N.Y., 2000).

Advice: When completing any documents that explain a firing, not just U-5s, you may feel an urge to justify your actions by embellishing the reasons. Don't do it. Stick to the verifiable facts. Any overreaching statements will blow up in your face if they get into court.

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