How to Avoid Wrongful Termination - Six Golden Rules

Saying goodbye is hard. Saying goodbye to an employee is not only hard but can sometimes risk wrongful termination claims and lawsuits that follow. 

With California being an at-will employment state, employment can be terminated at any time, with or without cause, as long as the reasons are not discriminatory, retaliatory, or against the law. With that said, not enough knowledge regarding the termination process, as well as the careless mistakes made when terminating employment, can lead to employees filing wrongful termination claims against your firm.

Here are 6 ways to avoid wrongful termination and ensure a smooth, amicable goodbye.

1. Be compassionate, but candid

Termination is stressful. For both parties, but especially the employee. No matter the reason for discharge, it is important to be courteous and compassionate throughout the process.

This includes giving the employee a clear reason why they are being let go, providing warnings prior to the termination meeting, and using empathetic language during the meeting. 

It is also important to be honest. It might be tempting to omit certain information regarding the employee’s performance to “soften the blow”, but if the employee later on challenges this decision as unlawful, the lack of a precise and concise reason for termination might be used against you.

2. Be fair and consistent 

Fairness and consistency go hand-in-hand here.

First, it is a good idea to keep a file throughout the employee’s career at your firm for many reasons. When communicating with an employee regarding termination, having the paperwork that clearly documents an employee’s misconduct and underperformance, paired with explanations that are consistent with these records, makes the termination itself come as less of a surprise.

Furthermore, the outcome of wrongful termination lawsuits often depends on the employee’s ability to prove that the employer’s reason for termination is inaccurate, inconsistent, or untrue. In this case, consistent records of the employee’s performance and conduct become critical.

Employers should also consider how they look from a third-person perspective.

Is this termination fair? Are there risks of unfairness, or discrimination even? In cases of discharge for misconduct, were there similar situations before that were handled differently?

To help find the answers to these questions, it is important to give employees the chance to tell their side of the story. Investigate cases of misconduct thoroughly, and understand the reasons behind employees’ poor performances. If needed, you can always call in a witness, and make sure these conversations are properly documented.

3. Comply with (All) the laws, ask for help if needed

Federal employment laws are changing all the time throughout the year, and state employment laws vary greatly. Unawareness of these laws can cause your business to fail in compliance, increasing the risk of wrongful terminations. 

It might be a good idea to involve an Employment Law Attorney who can help review your procedures for employee termination, and ensure that your firm is complying with the most updated state and federal laws, when applicable. 

It is also crucial for firms to assess the potential legal risks that arise with every termination. Under federal law, employers are prohibited from firing an employee due to race, gender, nationality, age, sex, or pregnancy. In addition, California state law bars discrimination based on gender identity and sexual orientation.

Is the employee a part of any of these protected classes? Is the employee disabled, or has the employee recently taken a protected leave? Did the employee recently file a complaint within the firm?

Even if the termination has no relation to any of the aforementioned factors, which is usually the case, it is still possible for an employee who is confused, unclear or upset about the termination to file a discrimination claim. To avoid this, you might want to consult an attorney before termination. 

4. Stick to the protocol 

The best defense against a wrongful termination claim is to consistently follow your company’s personnel policies and procedures, which should be clearly written out and uniformly agreed upon.

These policies should be stated in the employee handbooks that are given to employees when they first join the company. It is imperative to obtain employees’ signatures, indicating that they have received, read and agreed on these employment policies. 

When handling employee terminations, companies can then refer back to these policies as a checklist, making sure that a discharge is warranted, and that they are treating the employee fairly.

There might be cases where your form deviates from the protocol and makes an exception for an employee. For example, you might have a disciplinary policy for attendance and unexcused absences. If your firm uses this as one of the reasons to terminate employment but has given another employee a “pass” for the same offense earlier on, a lawsuit may shortly follow. 

5. Prepare for the meeting

After all the preparations, it is now time to say goodbye.

The meeting for employment termination is going to be uncomfortable for everyone present, so it would be helpful to prepare beforehand for a higher chance of an amicable parting. 

Meet with the employee in person, if possible, and decide prior to the meeting the necessary personnel present, as well as what the conversation should look like. The keyword here is respect.

During the meeting, an employer should state the reasons for the discharge in a concise, precise, yet respectful manner. An important thing is to remember the purpose of this meeting. It is no longer necessary to reprimand or discipline the employee, get emotional, or provide too much information.

You should use this opportunity to address any questions or concerns they have, and clearly discuss any accrued pay, unpaid overtime wages, and any benefits they might be eligible for. Leaving this meeting with ambiguity, unaddressed questions, or unresolved issues could lead to the employee’s resentment or a wrongful termination lawsuit.

6. Pay your dues

Last but certainly not least, even if the employee’s departure from your company is sudden or uncomfortable, you should make sure he or she is appropriately paid for all monies due, on time.

That includes the final paycheck, any accrued or unused vacation time, overtime wages, or commissions, if applicable. In some cases, companies might also want to consider severance pay.

If companies fail to make these payments by the time of termination, they may need to pay three times the unpaid amount and risk a wrongful termination claim.

Avoid wrongful terminations - learn more

Saying goodbye to employees may never get easier, but the six golden rules above can help avoid wrongful termination claims, and reduce the chance of resentment from a disgruntled former employee down the road.

To learn about best practices like these to avoid wrongful terminations, watch this recorded webinar: Best Practices to Avoid Wrongful Termination in a Pre-Recession World with our special guest speaker, Jason T. Yu, 

This article is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel for legal advice.