How To Handle Getting Fired


Wired Magazine this month offers a few pointers on how to disguise on your résumé the fact that you have been fired. The main point is to come up with a negotiated settlement that has you resigning from your job. Many employers will go along with these because they fear litigation. There will be no “wrongful termination” lawsuits if you are on record as having left voluntarily.

I don’t dispute this advice. It seems fine enough. But it doesn’t deal with the much more important matter of how to handle being fired from a psychological and sociological point of view. The truth is that getting fired is one of the best things that can ever happen to you, if you look at it the right way. There is no reason to consider it the end of the world. It can be the beginning of great things.

The key to understanding this is to zoom in on the nature of a labor contract. It is an agreement based on the expectation of mutual cooperation that betters the lot of both the employer and the employee. In a world without scarcity, the employer would rather do all work alone and not have to hire anyone. This would save resources, and, in any case, most employers figure that they can do a better job than anyone than they can hire, and, often, they are right.

The very existence of institutions that are larger than sole proprietorships grows out of the need to divide the labor. Even if the employer is the best sweeper, web development, accountant, and market expert in the world, it is to his advantage to specialize in one area while farming out the other tasks, even if these tasks will not be done as well by others. Every employer, then, regards the hiring decision with a combination of dread (no one wants to waste money!) and relief (finally I can get something done around here!).

It is critically important for the employee to understand that he is doing no favors to the employer by working there, nor is the employer to be regarded as a generous distributor of funds, much less someone who is under some positive moral obligation to dish out. The employee is there because the nature of the world and the ubiquity of the scarcity of time and resources make it necessary. In order for there to be peace amidst this arrangement, there must be mutual benefit, always.

When that mutual benefit ceases to exist, it is in the interest of both parties to dissolve the relationship. The employee can leave for greener pastures. In the same way, the boss can stop paying the employee in exchange for services that he no longer believes are a benefit to the company. To be fired only means that the employer takes the initiative in ceasing to fund further engagement. Both or either side of this exchange could be wrong, of course, but all human decision-making is speculative, and we can only act on the information we have.

Why would anyone want to hang around at a dinner party at which he is not wanted? It’s the same way with a labor contract. If you aren’t wanted, you should walk away and consider yourself better off as a result. No lawsuits, no complaints, no bitterness, no acts of vengeance. Just a clean and happy break.

Doesn’t the reason you are fired matter? Not really. The employer doesn’t always know the reason. He just knows it is not working out from his point of view, and he is perfectly within his rights to terminate the prior agreement.

Let me tell a quick story from my own work history. When I was in clothing sales, I was one of the top-ranked salesmen on the floor, but I didn’t always see eye to eye with the owner-boss. One Christmas season, he told all the salespeople that all alterations had to be promised out three weeks from the date they were sold. That struck me as outrageous.

Sure enough, within the next hour, I had a customer come in to buy seven pricey suits, on the condition that all alterations were to be done within the week. Now, I should have gone to the boss and asked him. He would have said no, I’m quite sure. So I didn’t: I went ahead and promised the suits out. At closing time, the boss found the tickets and threw all seven suits at me and demanded to know “who is going to alter these?”

I said, “I will,” and I promptly hit the sewing machines and began to sew. I had them all finished by 9pm that evening. I brought them in to him and said that I would deliver them to the customer personally in the morning. My boss said, that’s great, and added: “after that, I won’t need your services anymore.”

Was he wrong or right? He was wrong that firing me was good for his business. But he was right that he could not countenance an insubordinate employee, and just as a tip to the worker: there is no surer way to make yourself unwelcome than to be insubordinate. Even from a business point of view, he needed a staff that would follow his orders, right or wrong. Hey, it’s not my style but it was his clothing store, for goodness sake. (I ended up as a manager in another store and we outcompeted his store in every season that followed.)

Being fired does not mean that your time with the company was a waste. In the time you were there, both you and your boss benefited in some way. Conditions changing doesn’t negate that reality. The boss gained a worker. And you gained valuable experience — and one of the most valuable experiences is the shock of being fired. Sometimes it is the best way to get a person’s attention. We all need improvement, and experiencing outright rejection provides a poignant reminder of this fact, and an impetus to change.

You might feel anger and even hatred. You might want to curse out your boss. You might plan a lawsuit (which seems to be everyone’s first reaction). Instead, you need to do something completely counterintuitive. You need to thank your boss for having had confidence in you and for giving you the opportunity to work there. You need to say this as sincerely as you can. And when you see your boss at the grocery store or sports event in the future, you should bound up to him as if he were an old friend and thank him again.

If you do this, there might come a time in the future — in fact, almost certainly — when this person will be in a position to recommend you for a job. He is far more likely to do so. In fact, he might be so impressed at your magnanimity that he will offer you your job back. You can politely turn him down, if you so wish. The point is that there is nothing productive about resentment or hate, any more than you should hate the convenience store from which you no longer buy milk. You once benefited from exchange and you no longer perceive the advantage in doing so. Big deal.

If it makes it any easier, let us remember that you were most likely paid more than you contributed to the firm. Wages work this way. I can recall that I worked with some jerk who refused to straighten inventory in the back room. “For minimum wage, I won’t do this.” But the truth is that he was paid far more than he gave back. Employers often pay wages in advance of productivity, hoping that they are making some kind of investment in the future. It is only later that you become productive enough to make it worth it for him, at which point he has to raise your wage in the anticipation of future productivity. So there is a sense in which everyone is indebted to the employer.

The worst fate to befall the American labor market came after World War Two when employees began to think of all jobs as lifetime jobs — the way they are in economically backward and decaying Europe today. In a free market, we would hop from job to job without any problem. Employers would freely hire and fire, trying people out the way we try on shoes, and employees would be the same way. In this way, we are most likely to find the right fit, and our places of work would become less contentious places of happiness and peace.

Nothing is more absurd than the attempt to restrict the right to fire. Voluntarism goes both ways. The employee can leave, and the employer can fire. Any other system, such as one that would restrict either action, is an act of coercion that diminishes the well-being of both sides.

Thinking of our kids here and their job experiences, we should hope that they get fired from at least one job or several in their early work years. Being fired reminds us of our obligations, the contractual nature of work, and the need for agreement and voluntarism in all social relations. The act of getting fired underscores the existence of the freedom of association, which is the key to social peace and a foundation of a growing economy. Do your part and take it well.

Jeffrey Tucker [send him mail] is editorial vice president of Comment on the Mises blog.

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