Driving Transactions
Thursday, July 18, 2024


At this time, almost every state in the U.S. is an “at-will” employment state, the only exception being Montana. This means that unless you have an employment contract, you can terminate an employee at any time for any (legal) reason; and likewise, an employee can quit, with or without notice, for any reason.

HR Coach It sounds simple enough, and it does indeed offer a good deal of freedom to employers with regard to making employment decisions that are best for their business. However, the law does offer certain protections to employees, and employers should watch out for the assumption that they have carte blanche to just fire at will.

Firing employees (or laying off, as many of us had to do recently) is one of the most difficult responsibilities of a business owner or manager. When it comes to terminations, you’ll want to avoid some pitfalls that may put you at risk for legal liability. As mentioned, at-will employment does not mean you can ignore contracts or disregard employment legislation. If you are considering firing an employee, first determine if any of the following situations may be at play.

Contractual obligations. Check the terms in any contracts (including collective bargaining agreements) you may have in place before taking action. It’s also important to ensure that none of your other communications—from offer letter, to management conversations, to employee handbook—could be considered to imply a contract or a guarantee of employment terms. Have an HR professional or labor attorney prepare or review your employee documents to make sure you aren’t making any promises you don’t want to keep.

Discrimination. As we all know, discrimination on the basis of race, color, national origin, sex (including pregnancy, sexual orientation, and gender identity), or religion is prohibited under the Civil Rights Act. Additional discrimination guidelines may be dictated by your state and are also in place for those who wish to do business with the federal government.

Disability. People with disabilities are also protected against discrimination under the Americans with Disabilities Act.

Retaliation for complaint about harassment or discrimination. If an employee has made a complaint about any kind of harassment or discrimination, you cannot take negative actions against them in response.

Retaliation for whistleblowing. The same applies to an employee who acts as a “whistleblower” who makes a report or accusation of wrongdoing on the part of your business.

It is worth pointing out that even when you believe you are in the clear and you are genuinely acting in good faith, a fired employee may see things differently and choose to make a claim against you for wrongful termination. This can be quite costly in any number of ways, from legal representation to fines to damage to your culture and brand—not to mention the mental and emotional stress! The good news is there are some practices you can adopt in your employment decisions that will help prevent or defend against such claims.

The surest defense is having a good reason for the termination. Your reason may be an egregious infraction; ongoing issues with attendance, reliability, or other performance issues; or a change in business needs. Even though “at-will” employment means you don’t need a reason, demonstrating a sound reason is still your best defense against any claim that might be brought.

With this in mind, it is advisable to maintain certain principles in all of your employee management practices:

Consistency. Do your best to handle performance or other issues in accordance with your stated policies and in a predictable manner. Policy enforcement should not appear to be arbitrary.

Fairness. This doesn’t necessarily mean you need to treat everyone exactly the same way down to the detail, but it does mean that your treatment of one employee may be compared to how you treat others. For example, if two employees have a similar attendance record, you don’t want to terminate one and allow the other to stay, unless there are additional reasons you can point to for the differing treatment. Documentation. Make sure to document performance issues or other concerns that may end up resulting in any type of disciplinary action or termination.

Communication. The way you communicate employment decisions can make a big difference in how they are received. Be sure to focus on the behaviors and their consequences for the business, and avoid personal or emotional attacks. When possible, provide opportunities for improvement before taking the final step of termination.

Treating your employees fairly and keeping the lines of communication open can go a long way to preventing the need to fire them. But even if termination is unavoidable, following these practices is your best bet in defending against a claim for wrongful termination.   [CD0521]

Amy Cooley is HR Administrator for The LMC Groups. She can be reached at amy@lmc.people.com.