Employment Termination Letter Disputes

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 What Is an Employment Termination Letter?

Employment termination letters are formal letters that inform workers that they are facing an employment dismissal, meaning they are being:

  • Fired;
  • Laid off; or
  • Otherwise terminated.

These letters are usually issued from employers to employees. Equivalent letters that are issued from workers to their employers are called letters of resignation.

Although an oral employment termination will suffice, in some cases, an employment termination is beneficial because it provides a record of the termination process and may be used as evidence in the event of a wrongful termination lawsuit or other legal dispute.

These types of letters may also be necessary in cases where:

  • There are many issues that need to be resolved prior to termination; or
  • There is an existing employment contract between the employer and the worker.

An employment termination letter may, in some cases, serve as a contract, especially if there are various terms and conditions that need to be fulfilled prior to the actual termination.

What Is Wrongful Termination?

Wrongful termination, also called unlawful termination, is a term in employment law that refers to when an employer terminates an employee for an illegal or unauthorized reason. This includes reasons that:

  • Violate local, state, or federal laws;
  • Go against public policy; or
  • Breach the terms of an employment agreement.

Additionally, a wrongful termination may occur if an employer terminates an employee who refused to obey work instructions that are illegal, for example:

  • Not following safety regulations for a specific job task; or
  • Committing more serious crimes, for example, felonies, such as larceny or tax evasion.

Another way employees may be unlawfully terminated is if an employer ignores their own company policies regarding the process for terminating employees. For example, when an employer does not follow proper protocols when they are releasing the employee from their position.

It is also important to note that, if employers terminate employees in a way that is considered illegal or unlawful, they may face legal consequences for those actions. If this occurs, the employer may be required to compensate the employee ins oe way, which may include:

  • Reimbursing them in back pay;
  • Reinstating them to their prior position;
  • Paying them monetary compensation; or
  • Various other forms of relief.

What Are Some Common Disputes over Employment Termination Letters?

An employment termination letter will often contain specific information and may address a number of different issues related to both the employment and termination procedures. Examples of legal conflicts over employment terminations may include:

In certain cases, a dispute may revolve around a single issue or may involve a few terms in the letter that need to be worked out. In other cases, a dispute may have to do with the whole termination in itself.

Are There Any Legal Remedies for Employment Termination Letter Disputes?

A dispute over employment termination may result in legal remedies, including:

  • Return of company property;
  • Resolving of wage issues, in some cases, through a damages award; and
  • Change of employment status as necessary, for example, reinstating an employee, or returning them to a non-employee status.

The exact remedies and legal consequences will vary by state law and according to every unique case. In general, having an employment termination letter may prevent legal issues from arising in the long run because the terms will be in writing.

Important Things for Employers to Consider After Firing an Employee

Employers may encounter terminated employees after they are terminated. Because of this issue, an employer should have a plan on how to handle these types of situations.

Common situations in which an employer may be asked to communicate with or about a fired employee include:

  • Conversations with other employees within the company;
  • Reference requests from prospective employers; or
  • Legal or administrative proceedings.

The majority of companies have a protocol for terminating employees. It is important for an individual to refer to their company handbook before assuming they know what to do.

Dealing with Legal Proceedings if an Employee is Fired

Employees who have been terminated may take legal action against an employer, which may include:

  • Unemployment proceedings: Numerous states will not allow a terminated employee to collect unemployment if they are fired for misconduct. If that occurs, the unemployment claim will be easy to dispute;
  • EEOC or state administrative proceedings: If a former employee plans on filing a wrongful termination lawsuit, they will typically have to seek administrative relief first with the EEOC or their state’s human rights department;
    • An investigation, interviews, and a hearing will typically be conducted;
    • An agency may not pick up the case and instead issue the individual a right to sue letter;
  • Wrongful termination lawsuit: An employee may believe that they were discriminated against or terminated for an unfair reason; and
  • Defamation lawsuit: This type of lawsuit can be filed when a former employee discovers that an employer is making damaging comments about them;
    • The individual is only required to show that the employer intentionally damaged their reputation by making negative statements that they knew were false;
      • Because of this, employers should be extremely careful when making comments about previous employees, whether it be to other employees or a third party.

In order to avoid many legal issues, it is best for companies to have policies in place that direct employees to follow up on important conversations in writing.

Providing References for Terminated Employees

Prospective employers may contact a previous employer for a reference for an employee they terminated. This may be a tough situation because making negative comments could lead to a defamation lawsuit, even if the comments are true.

An employer could decline to provide a reference for their previous employee. A previous employer is not required to provide a reason for this and may simply state that they would not be able to provide a positive reference based on their professional experience with their former employee.

If a former employer does decide to speak with a prospective employer, some ways they can handle the conversation without putting their company at risk for a lawsuit include:

  • Only provide the basics: This generally includes:
    • employment dates;
    • job title; and
    • salary information;
  • Only disclose facts that can be proven: If the employer makes a comment about a former employee’s work habits or performance, ensure that there is written documentation to support those statements.

If there are any concerns, it is important to consult with a Human Resources representative before speaking to the prospective employer. This department may be able to provide guidelines that are specific to the company or inform them whether it is against company protocol to offer references.

Do I Need a Lawyer for Help with an Employee Termination Letter?

An employee termination letter may often include important information. If an individual or an employer has any issues, questions, or concerns related to this type of letter, they should consult with a workplace attorney.

Your attorney can help draft, review, or edit the letter and research the laws to ensure that it is in full compliance. In addition, if there are any disputes or legal conflicts regarding the letter, your lawyer can provide representation in court.

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