Sooner or later, every business will have to deal with an employee
claiming that they were wrongfully terminated from their job. The reality is
that employers usually terminate employees for performance or due to
downsizing. Whenever you must make the business decision to terminate an
employee, you should be aware that the employee may file a claim or attempt to
sue you.
Your company’s termination process, and how it
handles employees during the termination process, very often has a direct
impact on whether the employee decides to file a wrongful termination claim
against your company post termination. Even when you have a clear termination
policy and clearly communicate it to employees as they join the company, and follow
it as the employee exits the company, a lawsuit may follow.
Here are some best practices to help you avoid wrongful termination litigation
- Define work performance objectives.
If you make the decision to terminate an
employee, it should not be a great surprise for the employee. Document the
employee counseling process – from warning, to reprimand, and to suspension. Communicate
the progressive disciplinary measures with expectations for improvement to the
employee and document this in his or her employee file. Thus, having a system
to identify performance objectives, and comparing an employee’s individual
performance against those objectives, and then communicating with the employee
whether they meet or don’t meet those criteria, makes the actual termination, for
performance reasons, simpler and less shocking to the employee.
- Terminate with compassion.
Even if an employee expects to be terminated from
employment because of performance failures, they may still be shocked when
terminated and react poorly. A termination from employment is a stressful
event. Wherever possible use compassion and empathy to deliver the news while
remaining firm that despite everyone’s best efforts, a separation from
employment may lead the employee to find a better position elsewhere.
- Consider liability insurance.
Because employee lawsuits against employers for
wrongful termination are common, an employer should consider liability
insurance, to help pay for legal fees and any potential claim for damages. Make
sure you understand the available insurance options – including what is
covered, whether you are permitted to select your own attorney, and whether the
claims are paid per claim or per claimant.
- Comply with all state and federal employment
laws, when applicable.
Most employers do not know all the
state and federal employment laws applicable to their businesses. There
are several Supreme Court cases and laws implemented during the year. It
is best for business owners to see an Employment Law attorney annually to
review their policies and procedures (see below Item 5) and to know the laws
applicable to their businesses.
Make sure your company follows all the rules
associated with employment promulgated by the federal Department of Labor and
the State of California’s Labor and Workforce Development Agency. Posting requirements, payment of severance wages, and responding to unemployment insurance
inquiries are very important.
Also, before terminating an employee,
consulting with an attorney would be best practice. Your Business
Attorney will review documentation, then help clients through the
termination process to minimize claims.
Writing down your employment policies and
procedures as well as distributing copies of the company’s employment policies
and procedures to employees is the foundation of providing a defense to a claim
for wrongful termination. Employees should be provided with an employment
handbook at the start of their employment and required to sign a receipt
indicating that they received the handbook and accept the employment policies
contained in the employment handbook.
- Train your human resources team.
Your human resources personnel should be up to
date with all the labor and employment laws in California or wherever else your
company maintains employees. Don’t underestimate the power of developing soft
skills, like using effective and efficient communications during the onboarding
and termination processes.
Develop a termination plan and related employment policies
Avoiding wrongful termination suits and defending
against them if they arise are just two realities of employer-employee
relationships today. Assure that your company is following all applicable state
and federal laws. If you own a small business and seek assistance preparing an employment handbook and related employment policies and procedures,
contact Aria Law firm, a Fremont business lawyer for an initial consultation. Counseling clients
in Fremont, CA near Newark, Hayward, East Bay, Milpitas, Union City, San
Leandro, Gilroy, San Jose, Santa Clara, We look forward to putting our legal experience to work for you.
