How to Avoid Lawsuits When Firing an Employee

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Am I At Risk of Being Sued for Firing an Employee?

Firing an employee can have a personal and emotional impact on an employee. In today's legal environment, a wrongful termination claim by a disgruntled former employee can end up costing your company significantly in legal costs. In order to avoid costly litigation, there are several steps you can take to help ensure that your business is protected from fired employees.

Know the Law

The first step in preventing lawsuits from former employees is to know what the law is on employee termination. All company managers with the power to fire need to have at least a basic understanding of state and federal laws. This will allow them to spot and respond to potential risks. Some of these areas include:

Document Everything

Effective managers and human resource personnel know the importance of keeping a detailed paper trail on all employees. This is especially important when dealing with fired employees. In many cases, a manager's documentation on an employee may be the only real evidence that you can use at trial. Without documentation, wrongful termination trials become a he said she said war of words, leaving the jury to decide who is more credible.

Examples of things to document include:

Have Clear Termination Procedures in Place

One of the best ways to prevent claims of wrongful termination is to develop clear employee firing procedures and to follow them closely. Termination procedures should include:

Additionally, as a future reference for the former employee, you should have a company policy on how to handle reference requests in order to avoid defamation claims.

Do I Need a Lawyer When Terminating an Employee?

In order to avoid lawsuits and help protect your business, you should consult with an employment attorney to review your termination procedures. This can help you avoid costly litigation in the first place. If a former employee files a lawsuit against you for wrongful termination, you should contact an attorney immediately. Your attorney will be able to defend you at trial and ensure that your rights are protected. 

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Last Modified: 01-09-2014 04:47 PM PST

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