Letting an employee go is usually hard for both the company and the employee. Even when an employee’s work is poor, knowing he or she has bills to pay or a family to support makes termination a hard decision even for the company. Fear the ex-employee may sue for wrongful discharge can make this situation worse. Here are steps most businesses can take to help avoid wrongful termination lawsuits, and to be more likely to win in the event a claim is made.
Steps In Hiring And During Employment
• One way to reduce wrongful termination claims is to take the proper preventive measures when hiring. Have a written policy (preferably in an employee manual) stating that employees work on an “at-will” basis. This means the employee can quit and the company can terminate the employee at any time with or without notice or cause. The policy can also state that the only workers who are not "at-will" are those with a formal, written employment contract that expressly promises employment for a certain period of time.
• Do regular evaluations and keep records of them. Write down warnings, suspensions and other disciplinary actions in the employee’s file. In evaluations, list both positives and negatives. When an employee’s work needs improving, send a note and put a copy in the file. It's very important to keep good written records. When there is no written record of problems that were discussed with the employee, judges and juries tend to question whether they really were discussed.
• Investigate infractions promptly. If you allow too much time to pass between the employee's alleged violation of a company policy and the discipline, this can make it look like you approved of the conduct or the conduct was not as bad as you claimed it to be. It can also cause other employees who are disciplined for engaging in the same conduct to claim they are being singled out for punishment and possibly being discriminated against.
Steps To Take When Considering A Termination
• Make sure reasons for termination are lawful. An at-will employee can be let go for no reason, or any reason. But this rule still prohibits firing someone for an unlawful reason. In most states, it’s permissible to fire someone for bad work, being disruptive, breaking company rules, dishonesty, lateness, absences, revealing company secrets, or stealing company property. Usually it’s illegal to fire someone for his or her: race, religion, national origin, age, illness or disability; sex or sexual orientation; status as married or single; need to take time off for family illness or pregnancy; wages being garnished; refusing to do something illegal; filing a workers' compensation claim; reporting the business’s violation of law; or for refusing to have a personal relationship with a supervisor or co-worker.
• Review agreements, policy manuals, letters or other documents that may have stated or implied a promise of continued employment. Make sure that no company manager made any oral statement that could restrict the termination.
• Follow your company's written termination policies. Many companies have written policies contained in employee handbooks or other documents that give procedures for disciplining employees. Many of these policies provide for progressive discipline, which typically includes verbal and written warnings followed by suspension and then ultimately termination. Be sure to follow any specific policies in company manuals or other documents, as employees may be able to make a successful legal claim if these procedures were not followed in their case.
• Review the employee’s file to confirm that grounds for termination are documented. Even if the reason is a recent incident, make a written record. Assess whether the file has evaluations or other items that could conflict with the stated grounds for termination.
Steps After Deciding To Terminate An Employee
• Review benefits. Go over any termination benefits with the employee, including severance pay, payment for vacation or sick time and continuation of insurance benefits. This can ease the employee’s frustration.
• Severance package. If an employee’s history suggests a risk of a termination claim, consider proposing an additional severance benefit conditioned on the employee signing a release of claims. This delicate step is not right for every situation. This is because proposing a release could backfire by signaling that the company fears a claim. It could also send a message to other employees that the company will pay money when it terminates an employee. If you want the employee to sign a release of claims, seek a lawyer’s help, as the law has procedures on many kinds of releases signed with a departing employee. If these procedures are not followed, the release may not be enforced.
Other Steps
• Liability insurance. Consult an insurance agent or broker about getting a policy of employment practices liability insurance. This can pay for defense costs and pay an award in the event a wrongful termination claim is made.
• Importance of legal help. Terminating employees can be a potential minefield for employers because of the numerous laws and company policies that employees may be able to base a claim on if their termination is not handled properly. To help reduce the risk of problems, seek legal assistance before the termination. Employee termination is one area of the law where taking preventive measures like obtaining legal help to assure a termination is handled in accordance with the law far outweighs the costs and time involved in an employee lawsuit after the termination.
Wrongful termination lawsuits can have a devastating impact on a business. Taking some or all of these steps will reduce the risk and number of wrongful termination claims against your company. It will also improve your company’s chances and reduce its liability exposure in the event a claim is made.
Contact an attorney at Triscaro & Associates today. Please call us for all your legal needs. We offer a full range of legal services to individuals, families and businesses, including personal injury, estate planning, real estate, family law and business matters. We are dedicated to providing the highest quality legal services at a reasonable cost.