Termination Mistakes You Can’t Afford To Make: Part 1

Published June 2010

There are few decisions an employer makes riskier or more important to the long term health of the business than whether and how to terminate an employee. The separated employee has the right to challenge that decision before a number of state, local and federal agencies, all of which have the power to investigate the former employee’s allegations and determine whether the employer’s actions violated the law. In some instances the investigating agency becomes the prosecutor and sues the employer often on a “class action” basis which would include a huge number of current and former employees. The employee also has the right to go to state or federal court and present his allegations to a jury to try to recover monetary damages or reinstatement to his job.

Bear in mind that when it comes to making a decision about firing someone, you must evaluate each situation individually. What are the facts? What do the witnesses say? What kind of documentation do I have to support my belief that this employee deserves to be discharged? And, you need to know what the law in your state says about the rights of an employee to challenge that decision. Some states, notably California and Montana, grant rights to employees that other states don’t. You can easily get information on your state by going the state government web site or contacting a chamber of commerce for guidelines on employee rights. However, a termination decision is a complex mix of legal and factual issues that need to be understood before the employee is discharged.

Here are some guidelines to help you make the correct as well as legally defensible decision in terminating an employee:

In most states, employees are presumptively “at will,” meaning that they are free to leave employment any time and the employer is free to discharge them at any time for any reason, even a reason that most people would consider irrational. There are exceptions in a few states so check to make sure you know the rules where your business is located.

In some instances, employees, usually executives, have written contracts or are members of a labor union with a collective bargaining agreement that limit the employer’s right to terminate at any time. In those cases, employers need to be more concerned with following the terms of those legal agreements in terminating employees than in what state or federal law requires. A competent labor and employment lawyer can guide you through that process.

Employees who are “at will” still have rights, however. State, federal and local laws prevent employers from firing an employee for an illegal motive such as the employee’s race, sex, disability, national origin, age, marital status, religion, pregnancy or veteran status. A number of states have laws that prohibit discrimination on the basis of sexual orientation or unfavorable military discharge among others. All of the laws cannot be listed here so take the time to familiarize yourself with what your state or local statutes say.

Keep an eye out for part two of this topic in the July edition of BASIC’s e-Newsletter.