Five Steps to Protect Your Business When Terminating Employees


Terminating an employee is something most, if not all, business owners will need to do at some point. While employment in the United States is "at-will," anti-discrimination and other similar laws do make some reasons for termination unlawful. Employers that do not properly plan for terminations expose themselves to needless claims. Fortunately, there are steps that employers can take to minimize the risk of facing a wrongful termination claim.

 1.  Understand Applicable Employment Laws

 Employers should consult with counsel or an experienced human resources professional to gain an understanding of applicable employment related laws. Such laws may include, for example: 

  • Title VII of the Civil Rights Act of 1964;

  • the American with Disabilities Act (ADA);

  • the Age Discrimination in Employment Act (ADEA);

  • the Genetic Information Nondiscrimination Act (GINA);

  • the Uniformed Services Employment and Reemployment Rights Act (USERRA);

  • the Family and Medical Leave Act (FMLA); and

  • related state laws.

 2. Implement and Consistently Apply Appropriate Policies and Procedures

 I had previously written on the importance of implementing an employee handbook. Implementing a handbook that contains appropriate policies, and consistently applying those policies, helps shield an employer from claims that it acted discriminatorily.

 3.  Document Performance and Disciplinary Issues

Employers commonly fail to document the problems or issues that ultimately result in an employee's termination. This puts the employer at a disadvantage if an employee claims his termination was unlawful, as the employer will not have documentary evidence to show that the termination was for a legitimate non-discriminatory reason.

 Similarly, when employers do document an employee's performance issues, the employer must be careful exercise objectivity. Performance reviews and disciplinary notices should not include personal comments, overstatements, or speculation or assumptions as these things will detract from a legitimate reason for terminating an employee.

 4.  Assess the Risk of a Potential Employee Claim

 Before terminating an employee, an employer should assess the risk that the employee may seek to bring a claim for wrongful termination. Depending on that risk, the circumstances for the termination, and the employer's risk tolerance, an employer may consider offering the employee a separation package to obtain a release of claims.

 5.  Protect the Business's Sensitive Information and Property

At the time of termination an employer should take steps to protect its information and property.  For example, an employer should disable the departing employee's access to the company's electronic communications systems.  Similarly, the employer should require the return of all company property, such as keys, computer equipment, etc., at the time of termination.

 The five steps above are not exhaustive and every termination will need to be handled slightly differently. Business owners should seek the advice of competent counsel when assessing their employment practices and termination procedures. If you have any questions about your business's termination practices, please contact us at (201) 345-5412 or