The vast majority of states in the United States have a system of “at will” employment. In the absence of an employment contract, an employee can be legally terminated at any time for any reason or no reason at all unless the termination was against employment discrimination laws.

However, the “at will” presumption may be defeated for several reasons in accordance with a court’s discretion. For example, courts may find an “implied-in-fact” contract between an employee and the employer.

When Would a Termination of an Employee be Unlawful?

Firing an employee might be unlawful if the employee can show that he or she was fired on the basis of race, gender, religion, or national origin. In order to abide bide state and federal anti-discrimination laws, employers should always document the employee’s shortcomings, confront the employee with those concerns, and give the employee a few chances to correct this behavior.

Some reasons an employee cannot be fired are:

  • Whistleblowing;
  • Complaints about violations of employee rights;
  • Testifying against the company or another employee;
  • Lawful union activities;
  • Filing claims for workers’ compensation;
  • Filing charges of unfair labor practices;
  • Reporting OSHA violations; and/or
  • Wage garnishments to pay debts.

What Should an Employer Consider Before Firing an Employee?

An employer should be sure that the employee termination is approved by top level management and follows written company firing policies. You should also seek legal advice if there are any questions regarding the procedure and reasons for termination.

Unless an employee has specifically committed an act that leads to termination, the employee should usually be told the reasons for their termination. An exit interview with the employee and human resources should be carefully planned to anticipate responses and reactions.

If an employee is being laid off or having their work area closed, it is may be a good idea to provide notice of their termination in advance so the employee can seek alternative employment or prepare for unemployment. Keep in mind that too early notification could affect productivity or cause undesirable actions.

As a security precaution, be sure to change security codes and passwords to deny access to the employee once their employment has been terminated. This can be especially important for employees with access to confidential information, including trade secrets.

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

Generally, retirement benefits are not required unless company policy or the employment contract provides for them. It’s important to carefully look at the employment contract, as even if the employee would have retirement benefits they may only be entitled to them after working for a certain period of time.

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.

Should I Seek Attorney’s Advice?

When firing an employee, a major concern is avoiding a wrongful termination lawsuit. Firing employees without a well-written employment contract or termination procedure can lead to defamation or wrongful termination suits. A local employment lawyer can help you with your firing practices, or represent you during a lawsuit.