How to Terminate Employees with Less Risk

Terminating an employee can be a stressful process for any employer, as the decision to terminate employment carries the risk of a possible legal claim. All employers, whether you have just a few employees or thousands, need to have the proper policies and practices in place to negate the risk of legal challenges down the road.

It is a common misconception that an at-will employer can terminate at any time for any reason and doesn’t have to explain their reasoning. However, even at-will employers should have a lawful and legitimate business reason for any employee termination. Legitimate business reasons include but are not limited to poor performance, misconduct, position elimination and/or financial considerations of the employer.  An unlawful reason could be something discriminatory (intentional or unintentional) such as making a decision based on an employee’s request for family leave, or request for an accommodation, and the list goes on.  The employer bears the burden of proving the lawfulness of its decision.

Why is having a legitimate business reason important in terminations?

It is imperative that an employer is able to articulate legitimate, nondiscriminatory reasons for terminating an employee and those reasons must be properly documented in order to justify its decision should a complaint be filed. Without proof of the legitimate reason, it quickly becomes much more difficult to defend. And no, your word is not sufficient proof.

What do employers need to consider before a termination?

Before deciding to terminate an employee, the employer should ask the following questions:

1. Why is this employee being terminated?
2. Can you prove a legitimate business reason?
   • Proof means documentation.
3. Can you prove similarly situated employees have been treated similarly?
   • Proof means documentation.
4. Why is this employee being terminated now?
   • This is because the timing of a termination can look unlawful or discriminatory. For example, terminating an employee right after they made a harassment complaint could look unlawful.

You need to be able to answer the questions why, why now, and why this employee without breaking into a hot sweat.  How do you do that?  Good documentation and well trained supervisors.

If you are looking for additional advice and best practice examples, join me next month during our HR Connect series where I will talk about the different strategies to create low risk terminations. I will also discuss other employer safeguards such as the legalities around separation agreements. You will come away with a toolbox of strategies to implement and with improved confidence when faced with terminations.