How to Fire a Member of Your Family

Q: Last year, I asked my sister-in-law to come work for me after she got fired from her job. Now it looks like I’m going to have to fire her, too. Any advice?

A: Firing an employee is never easy, but firing a family member is probably the hardest thing you’ll ever have to do as a business owner. While you don’t want to anger your relatives, few small businesses can afford to keep an employee on the payroll who isn’t pulling her weight.

The reality is that you'll have to pull the plug eventually, so try to put your emotions on the shelf and handle the termination professionally to avoid hurt feelings and litigation down the road.

When firing a family member, "All the rules of what to do when firing someone still apply," says David Leffler, a member attorney at Leffler Marcus & McCaffrey LLC. The New York City law firm represents clients in business matters, real estate, employment law, bankruptcy and litigation.

For example, always make sure that a second member of your management team is in the room when delivering the bad news--even if your sister-in-law insists on discussing the matter with you alone, Leffler advises. Also, consider asking her to sign a release so that she can’t sue your company months or even years from now, Leffler says.

Of course, avoiding litigation with a fired family member may be easier than avoiding bumping into her at the next family birthday party or holiday dinner. "This person doesn’t disappear from your life, and whether you see [her] just at family functions or every day, you still want to do your best to preserve the relationship," Leffler says. "Just be open to the possibility that there might be nothing you can do to avoid an acrimonious departure."

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