Firing an employee is almost always stressful and unpleasant, so you may want to rip off the bandaid quickly to get it over with. Before you do, though, it can be important to consult with an employment lawyer to minimize your risk of litigation. Even if you ultimately prevail, litigation can be distracting, time-consuming and expensive for your company. Understanding your legal obligations to your employee and observing certain guidelines about how to terminate an employee may prevent a lawsuit or limit the damage one does.
Grounds for Employee Lawsuits
Employees are divided into two types – contract employees and at-will employees.
Contract Employees
A contract employee has a legal right to complete the term of employment stated in the contract and generally can be fired early only for causes that are included in the employment contract. Firing a contract employee for any other reason can open you up to a breach of contract lawsuit by the employee. For that reason, all employment contracts should delineate the “causes” for which you can fire the employee.
At-Will Employees
An at-will employee can be fired for any reason not prohibited by law. However, an at-will employee may bring suits on the following grounds (among others):
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Arbitrary dismissal;
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Retaliation for reporting employer regulatory violations (whistleblowing);
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Discrimination based on race, age, sexual orientation, religion, national origin or sex and sexual harassment;
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Failure to follow the employer’s own policies;
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Breach of express or implied promises of employment (arguing that the employee should be treated as a contract employee based on promises the employer made);
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Breach of good faith or fair dealing (in some states);
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Fraud; or
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Violations of public policy.
An employment lawyer can advise you on what policies to have in place and procedures to follow when firing an employee to attempt to avoid a lawsuit and on the viability of any claims made against you. If worst comes to worst, an employment lawyer can also guide you through the litigation process.
Firing Process
Once you’ve made the hard decision to fire an employee, here are some best practices to follow:
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Reserve a private space (no glass doors!) where you can break the news;
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Arrange for an objective witness to be present. If you are particularly concerned about the firing, you may even ask your employment lawyer to be present;
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Document every phase of the firing process;
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Follow your own employment policies and contracts to the letter;
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Be polite and professional;
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Be clear about next steps, including whether the employee will be asked to sign a severance agreement, the timeframe for signing, what amount of severance will be paid, if any, how benefits, such as health insurance will be handled, procedures for turning over any company devices and closing out email or other accounts and how and when the employee can clean out their work area;
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Provide copies of any employment documents they signed when joining the company or during their tenure to remind them of their obligations (such as non-disclosure, intellectual property ownership and non-competes);
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After the dismissal, make sure to pay the employee his or her last paycheck, along with any severance pay and unused vacation time.
How an Employment Lawyer Can Help
A Priori employment lawyer can help you draft airtight employment contracts that clarify the division of rights and expectations between employer and employee. He or she also can help you compose and draft appropriate employment policies and provide you with helpful advice before you fire an employee. If a terminated employee does sue, a Priori employment lawyer can help you resolve the dispute in a way that provides maximum protection of your business interests.
Pricing
Priori employment lawyers range in price from $150-$650 per hour depending on geography, speciality and experience. In order to get a better sense of cost for your particular situation, put in a request to schedule a complimentary consultation and receive free price quotes our lawyers.
FAQ
If I fire an employee, do I owe them any severance?
Generally, if the employee you are firing is at-will, you are not required to pay any severance--although you may still want to so you can preserve some good will and/or get them to sign a severance agreement, which may release you from all claims and require certain desired obligations (such as a non-disparagement or non-compete clause) in exchange for accepting the severance. If you are firing a contract employee, the contract may have delineated certain severance obligations in advance (common for very senior employees). Before you fire an employee, an employment lawyer should review all contracts you have with the employee, so you can understand your severance obligations.