Last Updated on January 13, 2022

Have a Plan that Protects You Against Lawsuits

No one looks forward to having to let an employee go. But, when it becomes clear that it is time to dismiss an underperforming or contentious employee, it is best to have a plan in place that protects business owners from discrimination or wrongful termination lawsuits.

Laying the Groundwork – Performance Expectations

When an employee is onboarded into your company or organization, they should be given a clear job description. The job description details the duties of their position and performance expectations. Also, your Employee Handbook should contain a progressive Disciplinary Policy, including a description of any behavior that is extreme enough to prompt immediate dismissal.

We suggest that you require that employees sign a statement confirming that they have read and understand the entire Employee Handbook. If and when issues occur with any employee, the problem and the course of action taken by management should follow the policies in the Handbook, and should all be documented.

When and How to Dismiss an Employee

If management has 1) followed the steps of the Disciplinary Policy, 2) given the employee ample feedback and time to adjust their performance, and 3) not seen the necessary improvement to continue employing the individual, then it is quite possibly time to let them go. While each situation is different, there are some hard and fast recommendations regarding exactly how to proceed.

Be as certain as possible that the reason for dismissing the employee could stand up in a court of law, in the event that the employee decides to sue. Consider any recent events involving the employee. These may include claims of harassment, safety complaints, denial of special accommodations, or recent return from medical or military leave.

Take a thorough inventory of any issues surrounding the employee in question that might lead to claims of discrimination based on age, sex, race, religion, national origin, disability or any other legally protected status. Review the documentation regarding the employee’s issues, and consider whether or not it leaves you vulnerable to litigation.

The Termination Meeting

Meet with the employee and a witness, preferably an HR professional, to let them know they are being dismissed. Briefly summarize the events that have led up to this decision in a factual way. Tell the employee that the decision is final. Keep the meeting short, and make sure to provide the final paycheck consistent with state and federal regulations. Also have benefits information ready for them, including COBRA coverage if applicable. Inform the rest of your team about the termination. Tell them only what they need to know, and when you plan to have the position filled.

One final issue to be watching for is a state unemployment claim being filed by the terminated employee. It is best to respond to the unemployment department as quickly as possible. Many employers mistakenly believe that they have no control over this issue. If you believe the employee’s claim is invalid, provide an explanation of the reason for the dismissal to the unemployment department.

Chris Cooley is co-founder of MyHRConcierge and SMB Benefits Advisors. Contact him with any questions at (855) 538-6947 Ext 108, or ccooley@myhrconcierge.com.