How to Avoid a Wrongful Termination Lawsuit

A wrongful termination lawsuit can place an unreasonable burden on the day-to-day activities of a business, especially in terms of productivity, employee morale and legal costs. By being familiar with your state's at-will employment laws and federal laws concerning illegal terminations, you can protect your company from such a lawsuit.

Instructions

Difficulty: Moderate

1. Familiarize yourself with federal and state laws that define wrongful or illegal termination, which will help you to develop consistent company standards. Types of illegal terminations include firing an employee for refusing to break the law, for attending jury duty, for taking advantage of the Family Leave Act and for exercising First Amendment rights. A termination can also be considered illegal if it violates your own written company policy.
2. Review the at-will employment laws in your state to avoid a wrongful termination lawsuit. While every state but Montana gives employers the right to terminate employment at will, albeit with differing degrees of latitude, there can be a fine line between those rights and an illegal termination. By developing a consistent company policy toward employee terminations, you can avoid a lawsuit.
3. Document all disciplinary actions against the employee in writing, and have the employee sign and date each incident. Use the words "up to and including termination" when warning the employee against further company infractions, which will give you plenty of leeway if further discipline is needed. Keep this information in the employee's file, and make sure he receives a copy of such documentation as well.
4. Check with your company's human resources or legal department and review the case with them before you decide to terminate an employee. Discuss the facts of the case and determine whether it will be a legal and appropriate dismissal, which will help to reduce the chance of a wrongful termination suit.
5. Remain calm and objective when terminating an employee, and don't make it personal. By creating a huge emotional scene, you increase the likelihood that your ex-employee will seek legal assistance. When firing an employee, it may be a good idea to include at least one other person in the room to ensure that the meeting goes as smoothly as possible.

Tips & Warnings

• Avoid firing an employee in anger or as a retaliation for an unrelated incident. If an argument between a member of management and an employee becomes heated, it is better for the manager to send the employee home without pay and then calm down. The case can then be reviewed objectively the next day.