Six Steps to Avoiding a Lawsuit After a Termination

Terminations are not easy. Most employers dread terminations because they don’t like having to give bad news, and also because they are concerned about potential claims from the terminated employee. The reality is that no one is ever happy about getting fired. So, what makes an employee bring (or threaten to bring) a claim against their former employer? Sometimes, it is simply just the employee lashing out, or acting strategically to try and squeeze something out of their former employer. Often though, a claim results from the employee’s perception that the termination was somehow unjust.

While at-will employment means that employers can terminate an employee for any lawful reason at any time, a termination that seems to come out of nowhere often feels unfair to the employee. It is often when an employee feels they were treated unfairly that spurs them to want to pursue a claim against their former employer. The steps below can help employers communicate the basis for terminations more effectively, and in turn, allow them to feel more confident that a termination is less likely to result in a lawsuit from the former employee. Note that the first five steps occur long before the termination conversation ever takes place.

  1. Be fair when administering employee discipline:
  • Evaluate the quality and quantity of evidence of the poor performance or misconduct
  • What form of discipline is fair? Make sure the discipline is in proportion to the employee’s conduct
  1. Be consistent with administration of discipline:
  • Evaluate all relevant precedents (across various managers and departments) to make sure the same offense is being handled in the same way for all employees
  1. Promote a real understanding of your organization’s policies:
  • Have clear, easy-to-understand policies and make them public
  • Talk about your policies frequently, and make sure employees know where to turn if they have questions
  1. Be brutally honest and candid with employees:
  • Alert employees to performance issues in a timely fashion. Nip problems in the bud early- don’t wait and hope things get better on their own
  • Give accurate performance reviews – do not give a positive review if it does not match with actual performance.
  • Document performance issues and discipline well
  • Remember- a good termination does not come as a surprise to the employee!
  1. Be as objective as possible:
  • Make decisions based on the needs of the business, not personal relationships or how you feel about the employee as a person
  • Always have a lawful, legitimate reason for any termination
  1. Be humane in the administration of discipline and termination:
  • Be direct in your communication, but treat employees with dignity and respect

Taking these steps will not make the termination process any more pleasant but may help lower the risk of a terminated employee coming back to sue your business.