Firing Employees

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Most Common Employment Law Issues:

Can I Fire an Employee for Any Reason?

No, you cannot fire an employee for any reason. Most employment contracts are at will, which means that the employer or employee can terminate the employment for any legal reason.

What Is an Illegal Reason for Termination?

Employers can fire employees for any reason except the following:

Note that an employer that terminates an employee for these reasons may be liable for wrongful termination. Also, if an employer has an employee firing policy, they must follow that policy while firing an employees, or the firing may be deemed illegal.

Do I Have to Offer a Severance Package to a Fired Employee?

You are not required to provide a severance package to employees you fire by law. However, if your employment contract with the employee has a clause that provides for severance pay, then you should honor the promise.

Do I Still Have to Offer Retirement Benefits If I Fire an Employee?

Typically an employer does not have to, but this is dependent on the employment contract. If company policy or the employment contract annuls the benefits upon termination, then the employee cannot claim retirement benefits.

If retirement benefits in a contract or policy are ambiguous or missing, then an employer can have the employee sign a waiver upon termination. The waiver can annul benefits, or provide benefits with a condition.

What Should I Do If I Terminate an Employee with Access to Confidential Information?

An employer can change passwords and locks to confidential information. Employers can also have non-compete covenants with an employee, which would limit when and where former employees will work (e.g. working with a competitor or starting their own business).

An employer should have a general policy and waiver stating that all company property be returned upon termination. Defining “company property” will be based on each individual business. An employer can also have an employee sign a nondisclosure agreement if the confidential information is related to intellectual property.

Should I Tell My Other Employees about the Employee I Fired?

It is best to limit your discussion of why you fired an employee to avoid defamation or wrongful termination lawsuits. If employees are concerned about their work performance, you can tell them to review their employment contract.

What Should I Do If I Am Listed as a Reference for an Employee I Fired?

As an employer, you should do what you are most comfortable with doing. You can either provide a positive reference, or simply verify job responsibilities and dates of employment. Avoid negative comments about former employees because it may lead to a defamation lawsuit.

Should I Get an Attorney If I'm Thinking about Firing an Employee?

Yes. Firing employees without a well-written employment contract or termination procedure can lead to defamation or wrongful termination suits. An experienced employment attorney can help you with your firing practices, or represent you during a lawsuit.

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Last Modified: 10-13-2017 02:30 PM PDT

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