5 Tips to Protect Your Company from Wrongful Termination Lawsuits

Most jobs are considered to be “at will” employment, but employees may still be able to sue an employer if the reason for termination is determined to be illegal. Unfortunately, termination is something that nearly every workplace must deal with, so it’s important that this matter be handled with delicacy and professionalism. The following are a few tips that can keep a workplace safe from wrongful termination lawsuits.

1. Communicate Regarding Expectations

Letting employees know what’s expected from day one can help to prevent performance issues and protect an employer if an employee is fired for failing to meet expectations. Of course, regular feedback should be given so that employees know whether or not they’re meeting expectations. If an employee is consistently warned about performance issues, it should be no surprise when termination follows.

2. Keep Great Documentation

Even if an employee is alerted to issues with performance, tardiness, or behavior, it can be difficult to prove that this feedback was given if there’s no documentation. Keeping great records can not only help to protect an employer from wrongful termination, it can also improve transparency and communication regarding ongoing issues. This can in turn improve consistency and organization, preventing problems from several angles.

3. Be Compassionate During Terminations

Being fired has been identified as one of the most stressful things that can happen in a person’s life. When the time comes to terminate someone, no matter what the reasons for the termination, being compassionate can help to ease the inherent tension in the situation. How an employee feels during and after the termination can be a big factor in whether or not the employee feels the need to pursue legal action.

4. Purchase Liability Insurance

Liability insurance is an added expense for the business, but may help to save dollars if an employee sues the company for wrongful termination. Not all liability insurance is the same, however. It may be prudent to make sure the option still exists to defend against a lawsuit and avoid a settlement, even if liability insurance is available to help pay settlements when they are found to be the best course of action.

5. Help Employees with Next Steps

Employees that find new jobs very quickly after termination usually don’t sue for wrongful termination. For this reason, it can be beneficial to assist employees with next steps as part of the termination process. Providing a reference or helping with networking, especially in cases where an employee was let go because of downsizing, can help the employee to move forward fast and prevent stress-inducing downtime.

Termination can be difficult for both employers and employees, so following certain guidelines can ease stress of the situation and prevent the hard feelings that sometimes lead to wrongful termination lawsuits. By detailing expectations and establishing a consistent chain of events that happens prior to termination, employers can protect themselves from liability. Employees may also feel more secure knowing what to expect and seeing that other employees are held accountable.

Top 10 Don’ts When You Fire an Employee

Firing an employee is stressful for all parties—not just for the employee losing a job. No matter how well you’ve communicated about performance problems with the employee, almost no one believes that they will actually get fired. With cause, too. The average employer waits too long to fire a non-performing employee much of the time.

So, employees convince themselves that they won’t get fired: they think that you like them; they think that you know that they are a nice person, or you recognize that they’ve been trying hard. In fact, you may believe and think all of these things. But, none of your feelings matter when the employee is not performing his job.

Firing an employee may take you awhile—usually much longer than the circumstances merit. Because you are kind, caring, and tend to give employees another chance. But, these are the top 10 things you do not want to do when you do decide to fire an employee.

Don’t Fire an Employee Unless You Are Meeting Face-to-Face

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Do not fire an employee using any electronic method—no emails, IMs, voicemails, or phone calls. Even a letter is inappropriate when you fire an employee.

When you fire an employee give them the courtesy that you would extend to any human being. They deserve a face-to-face meeting when you fire an employee. Nothing else works.

The fired employee will remember and your other employees who remain have even longer memories. And, no, during this time of social media dominance, don’t believe for a minute that the circumstances of the firing will remain secret.

You will have created a scenario in which your remaining employees are afraid to trust you. Or worse, they trust that you may harm them, too.

Don’t Fire an Employee Without Warning

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Nothing makes an employee angrier than feeling blindsided when fired. Unless an immediate, egregious act occurs, the employee should experience coaching and performance feedback over time. Before you fire an employee, try to determine what is causing the employee to fail.

If you decide the employee is able to improve her performance, provide whatever assistance is needed to encourage and support the employee. Document each step in the improvement process so that the employee has a record of what is happening at each step. The employer is also protecting its own interests in the event of a lawsuit over the termination.

If you are confident that the employee can improve, and the employee’s role allows, a performance improvement plan (PIP) may show the employee specific, measurable improvement requirements. (A PIP is difficult, if not impossible, with a manager or HR staff, once you have lost confidence in their performance.)

Do not, however, use a PIP unless you are confident that the employee can improve. The agonizing process of meeting weekly to chart no progress is horrible for the employee, the manager, and the HR rep, too.

The actual termination—while almost always somewhat of a surprise—should not come with no warning.

Don’t Fire an Employee Without a Witness

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Especially in the US, anyone can sue anybody, at any time, for any reason. In employment termination cases, the employee has to find a lawyer who believes he can win the case and thus, collect his fee. The best practice is to include a second employee in the meeting when you fire an employee.

This gives you an individual who hears and participates in the employment termination in addition to the manager. This person can also help pick up the slack if the hiring manager runs out of words or is unsure of what to say or do next.

This witness is often the Human Resources staff person. The HR person has more experience than the average manager, in firing employees, so can also help keep the discussion on track and moving to completion.

The HR person can also ensure that employees are treated fairly, equally, and with professionalism across departments and individual managers. This limits your liability when you fire an employee.

Don’t Supply Lengthy Rationale and Examples for Why You Are Firing the Employee

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If you have coached and documented an employee’s performance over time and provided frequent feedback, there is no point in rehashing your dissatisfaction when you fire the employee. It accomplishes nothing and is cruel.

Yet, every employee will ask you why. So, have an answer prepared that is honest and correctly summarizes the situation without detail or placing blame.

You want the employee to maintain her dignity during an employment termination. So, you might say, “We’ve already discussed your performance issues. We are terminating your employment because your performance does not meet the standards we expect from this position.

“We wish you well in your future endeavors and trust that you will locate a position that is a better fit for you. You have many talents and we are confident that you will locate a position that can take advantage of them.”

Or you can simply remind the employee that you have discussed issues with him or her over time, and leave it at that.

The more detailed you become, the less able you will be to use any of the information you discover following the employment termination in a subsequent lawsuit. And, as an employer, you will always find out additional information.

For example, think about a terminated HR staff person who had months of new employee paperwork in her drawer. The employees had not been enrolled in healthcare insurance.

In another example, a marketing employee had the entire bookkeeping for her bar which she operated in the evenings on her company-owned computer. (The employer was kind and gave her a copy of her bookkeeping which they didn’t need to do.)

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