How to Fire an Employee Lawfully to Prevent Claims

Posted on 20 October, 2021

There are times when an employee doesn’t work out for your company, either because of unethical behaviors, poor performance, or gross violations of company policies. Terminating an employee is a complicated process that could have some negative repercussions if not handled correctly. By knowing the proper steps to termination, you can potentially spare your company from a wrongful termination lawsuit and claim against your EPLI policy.

How To Legally Fire an Employee

When you are looking into firing an employee, you must consider several things.

Recognize Your Rights

Many states have enacted laws that allow employees to be hired on an “at-will” basis. This gives employers the freedom to terminate employees without or without reason and at any time. However, there is an exception to this rule as those who may be contractually employed require different termination considerations. You must check on the language or terms of the contract to see if there are listed reasons for termination that need to be followed or if the language allows a broad interpretation of the cause for termination.

Know the Exceptions

At-will employment protects the employer’s rights, but this arrangement can’t infringe on the rights of employees. There are some exceptions to the process.

Discrimination: At no time can your company let an individual go based on discriminatory reasoning. You are not allowed to fire someone based on their age, sex, religion, race, disability, or national origin. Your state may have additional compliance measures in place as well.
Just cause reasoning: Though you don’t need a reason to fire an employee, telling your employee that you are firing them a just cause leaves a lot of room for legal retaliation.
Public policy: If a public policy, such as constitutional right or legal statute, is violated by your choice to terminate an employee, you may find yourself in court with a wrongful termination suit. You may disagree with your employee’s actions, and the activity may hurt the reputation of the company, but you are not allowed to fire an individual for these reasons alone.

Follow the Steps

When you get ready to fire an employee, carefully follow these steps:

Thoroughly review the firing process outlined in the employee handbook.
Document, in detail, the violations that have occurred and make sure it is signed and acknowledged by the employee.
Construct a performance improvement plan and provide time for change.
Pursue evidence for grounds of termination through documents, interviews, and other relevant materials.
Be factual when presenting the termination information, and fulfill required legal requirements concerning benefits, unemployment, compensation, and other obligations.

Actions for Avoiding Wrongful Termination Lawsuits

These steps can reduce the liabilities associated with wrongful termination. Check with your broker on the coverage your EPLI policy provides, as well as additional risk management options.

About Byrnes Agency

At Byrnes Agency, we offer insurance solutions that can be tailored to meet your specific needs. Whether you’re looking for personal policies or commercial coverage, we have the right coverage for you. To learn more about our products, contact us today at one of our two locations.

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