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How to Terminate an Employee Without Triggering a Lawsuit

Author: S. Hayes Edwards Jr. Date: 11/21/2018

Categories: Employment Law & Litigation

Our clients often ask us for advice when planning the termination of an employee. Others ask for our advice after a terminated employee has threatened to sue them. As with most things, a little forethought can avoid a lot of headaches.

In defending employment cases, I have learned to think ahead to how a termination can trigger new problems or fail to address existing problems. Here are some tips if you are considering a termination:

  • Has the person made any claims of discrimination based on age, gender, race, or otherwise? If so, you run the risk of a retaliation claim (even if no discrimination had occurred), and you need to ensure the employee’s file reflects that the actual cause for their termination was unrelated to those complaints. For instance, has their misconduct or failures been documented? Has their supervisor taken notes of their review meetings? These steps should be taken proactively, to establish that your reasons are genuine and not pretextual.
  • Beware of neutral employee evaluations that appear as positive. Many employers score employees on a scale of Needs Improvement, Satisfactory and Outstanding (or something similar), with Satisfactory being the most common score, even for those employees whose performance is actually lacking. If an employee consistently receives scores of Satisfactory, it might be difficult to later argue that their work was poor, and that they were terminated for genuine reasons.
  • There is no requirement for severance. Severance should only be offered if the employee is making a promise in return. Those promises can be very valuable, such as a promise not to compete or a promise to release any potential claims against the company. But if you are not asking for anything of the employee, then severance is simply gratuitous.
  • Make sure that any obligation of confidentiality is reiterated upon employment. If an employee has been given access to confidential customer lists, proprietary information or systems, then you should present them with an agreement for them to sign that confirms the pre-existing obligation to the company.

Every employee and every termination is different. If you have questions or think you are stepping into a contentious situation, please contact me so I can evaluate your potential risks and develop an efficient strategy. For those on the employee side of this issue, stay tuned, because I hope to publish a follow-up article explaining the termination process from that perspective.

Hayes Edwards’ areas of expertise include employment law and litigation, commercial and construction litigation, real estate law and litigation, corporate and business law, and commercial leasing. Learn more about his practice or contact him today