How to Avoid Lawsuits When Firing an Employee

In today's legal environment, a wrongful termination claim by a disgruntled former employee can end up costing your company hundreds of thousands of dollars.  In order to avoid costly litigation, there are several steps you can take to help ensure that your business is protected from fired employees.

Know the Law

The first step in preventing lawsuits from former employees is to know what the law is on employee termination.  All company managers with the power to fire need to have at least a basic understanding of what the law is.  This will allow them to spot and respond to potential risks.

Document Everything!

Effective managers and Human Resource personnel know the importance of keeping a detailed paper trail on all employees.  This is especially important when dealing with fired employees.  In many cases, a manager's documentation of an employee may be the only real evidence that you can use at trial.  Without documentation, wrongful termination trials become a he said she said war of words, leaving the jury to decide who is more credible.  This is dangerous as juries are often sympathetic to fired employees, especially where employment discrimination is alleged.  

Examples of things to document include any written or verbal warnings given to employee, records of employee evaluations, number of times employee is absent or late without approval, and all steps taken to solve problems with employee.  

Have Clear Termination Procedures in Place

One of the best ways to prevent claims of wrongful termination is to develop clear employee firing procedures and to follow them closely.  Termination procedures should include standard documentation forms, planned agendas for termination meetings at which witnesses will be present, polices on when the employee will be able to collect personal belongings, plans on how to immediately limit fired employee's access to company property and files, and a procedure on how the employee will receive their final pay check.  Additionally, as a future reference for the former employee, you need to have a company policy on how to handle reference requests in order to avoid defamation claims.

Do I Need a Lawyer When Terminating an Employee?

In order to avoid lawsuits and help protect your business, you should consult with an employment attorney to review your termination procedures.  This can help you avoid costly litigation in the first place.  If a former employee files a lawsuit against you for wrongful termination, you should contact an attorney immediately.  Your attorney will be able to defend you at trial and ensure that your rights are protected.