What Should an Employer Keep in Mind When Firing an Employee?

What Should an Employer Keep in Mind When Firing an Employee?

One of the most difficult decisions an employer may be faced with is determining when to fire an employee. If employers do not handle the termination process professionally and legally, they may face lawsuits for wrongful termination, retaliation, discrimination and defamation, among others. Below are some useful tips for employers to follow when making the difficult decision to terminate an employee.

The Employment Relationship

Employers should ensure they are terminating employment for an appropriate, legal reason. The first step in this analysis is whether the employee is at-will or under contract.

• An at-will employment relationship can be terminated by either party, at any time and for any reason, so long as the reason is not discriminatory or in violation of public policy. Public policy exceptions vary widely among states, but may include an employer requesting an employee to commit an illegal act or the employee reporting a legal violation by the employer. Not all states recognize a public policy exception to terminating an at-will employment relationship.
• If the employee is under contract, generally the contract will state the duration of the employment relationship and the grounds for terminating the relationship. To avoid a wrongful discharge claim, employers must follow the terms of the contract. While many employment contracts are written, they also can be oral or implied. Employment contracts also may be created by employee policies or handbooks.

Illegal Reasons for Firing Employees

Employers may not fire employees for reasons protected by state and federal anti-discrimination laws, such as race, religion, national origin, sex, age or disability. State laws provide further protections and may prohibit an employer from terminating an employee because of his or her sexual orientation or marital status.

Employers also are prohibited from firing employees based on their citizenship status. So long as the employee is legally in the country and has permission to work, the employer may not discriminate based on his or her alien status.

Other reasons an employer may not fire an employee include:

• The employee filed a discrimination claim against the employer or participated in an internal investigation or legal proceeding against the employer for discrimination, regardless of whether the employer is found innocent (retaliation protection)
• The employee, based on a good faith belief, reported suspected or actual wrong-doing or illegal activities by the employer to a government body or agency, regardless of whether the employer is later exonerated (whistleblower protection)
• The employee filed a complaint regarding a violation of health or safety regulations by the employer to OSHA

Record-Keeping

Employers should keep meticulous personnel records detailing the reasons for terminating an employee and keeping copies of any complaints, disciplinary proceedings or other adverse employment actions taken against the employee. Employers have a duty to retain certain records for certain periods of time. These records can be useful if an employee later brings a wrongful termination suit.

Be Professional and Thorough

Employees should not learn from other employees that they are about to be terminated. If the employer needs to disclose this to a supervisor or other manager, the information should be kept confidential. Employers should be careful not to make disparaging or negative comments about the employee before or after termination - this could be cause for a defamation lawsuit.

In conducting the actual termination, employers should take the following precautions:

• Choose a private place for the meeting
• Make sure all necessary parties are at the meeting, including supervisors to support the decision and human resource personnel to explain continuation of health care rights, pension benefits, retirement accounts, receipt of final paychecks and other matters
• Collect any company property in the employee's possession, such as laptops, keys and security passes

To discuss your legal concerns regarding terminating an employee, contact an employment lawyer in your area. He or she can discuss the potential issues specific to your company and jurisdiction in firing employees.

Copyright © 2008 FindLaw, a Thomson Reuters business

DISCLAIMER: This site and any information contained herein are intended for informational purposes only and should not be construed as legal advice. Seek competent counsel for advice on any legal matter.

View Previous Months' Selections