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Firing An Employee? Check Out These 4 Tips For Avoiding A Lawsuit

While it's no small business owner's idea of a good time, it sometimes becomes necessary to fire an employee. Here are a few tips on how to let someone go without leaving yourself open to civil liability somewhere down the line.


At-will employment contracts are your friend

The reason at-will employment contracts are legal in every state except for Montana is that they afford employers the latitude to fire any employee at any time for any reason without explanation. By making sure all of your employees sign contracts with those terms, you can fire a problem employee as soon as you feel it's necessary. For reasons explained by this Nolo post, having a signed document certifying at-will employment status will be very helpful when dealing with a lawsuit brought by a disgruntled employee.


Document everything

Even if the employment contract makes it clear that they can be terminated at-will, it's still a good idea for you to document the reasons why you let an employee go. As this FindLaw blog post points out, if your now ex-employee decides to sue you because they believe you fired them because they are part of a protected class, it's in your best interest to have a folder full of documented policy violations or job performance issues at the ready. That way, there will be no ambiguity about whether you had cause to terminate.


Get an independent review

While it may be incredibly tempting, it's never a good idea to fire an employee in the heat of the moment. Terminating a worker's employment is not a decision to be taken lightly, and if you have concerns that firing a specific person will bring a significant amount of blowback, do as suggests and have an independent review performed. The purpose of an independent review is to have a third-party look over your reasons for pursuing a termination, determine if they are in accordance with company policy and all applicable laws, and determine if this employee termination is consistent with those previously carried out by your company. Having someone not directly affected by the decision review the facts can be extremely helpful in clarifying matters.


Handle the termination meeting carefully

Even if a terminated employee doesn't end up prevailing in a lawsuit against you, simply going through the process of a trial can leave you both financially and emotionally drained. One way to prevent against that scenario is to make sure that when you let an employee go, you handle their termination meeting with a great deal of sensitivity. If you're firing someone because of repeated documented policy violations or performance issues, make sure you have all the paperwork with you. Even if you're happy to be rid of the employee, conduct yourself in a professional manner so as not to give the impression that firing was personal in nature. It also helps to do as this Entrepreneur article suggests and have a human resources representative present to grant a fired employee with a severance package.


This article was written by Mario McKellop of for CBS Small Business Pulse.


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