Is It Legal? Critical Considerations to Avoid Firing Risks

Deciding whether to fire an employee is rarely simple. You must weigh numerous personnel and business factors, as well as review every possible legal angle. One hasty or unfair firing could come back to haunt you if a disgruntled employee files for unlawful termination.

By understanding your rights — as well as what constitutes an appropriate, legal termination — you can remain on firm footing with any firing decision.

At-Will Employment as Your First Defense

You may be surprised to learn that one of your best protections against a termination-related lawsuit begins at the hiring stage. Unless you are a government employer or operate under a contract, your company is most likely an at-will employer. At-will simply means the employment relationship may be terminated at any time, for any reason or no reason at all — except for an illegal reason.

These illegal reasons fall under various federal and state laws, such as Title VII, the Age Discrimination in Employment Act (ADEA) and the Americans with Disabilities Act (ADA). Firing an employee because of race, color, national origin, religion, age, gender, disability or other legally protected characteristics is strictly prohibited.

Each of these anti-discrimination laws also makes it illegal to fire someone in retaliation for complaining about discrimination/harassment or participating in a related investigation or proceeding. Further still, you can’t fire someone for whistle-blowing, reporting an OSHA violation, requesting time off under the Family and Medical Leave Act (FMLA) and other activities protected by public policy.

For a terminated employee to build a case under any of these laws, he or she must prove that you based your decision on an illegal factor versus a “legitimate business reason.”

Reducing Risk with Fully Legal Terminations

So when can you confidently fire an employee without worry of repercussions? To avoid complications, a firing should only be based on these legitimate business reasons:

• Poor performance: An employee has consistently performed below expectations, in spite of clear feedback that improvement was needed.
• Work rule/policy violation: An employee’s conduct is in violation of a company rule or policy, or the employee has acted in a manner that significantly jeopardizes the best interests of your company, customers or coworkers.
• Failure to meet job qualifications: Your employee no longer has the skills, expertise, knowledge or other qualifications to successfully perform the job (for example, due to advancements in technology, or modifications to the position following a reorganization); or the employee is disabled and unable to perform the essential functions of his or her job with or without reasonable accommodation.
• Layoff or elimination of position: There is a lack of available work, or other financial/budgetary concerns justify termination or elimination of your employee’s position as part of a reduction in force (RIF) or reorganization.

Even after identifying these acceptable reasons, you still need to be extremely careful when terminating employees. Take these additional precautions:

• Consider policy and process. Be certain you’ve followed the company’s discipline policy, which may include a verbal warning and one to two written warnings. Review the employee’s personnel file and documentation from earlier disciplinary discussions. Did you give the employee notice of the problem and an opportunity to explain and/or improve? Did you investigate any incidents leading to the termination?
• Be consistent with past practice. In addition to following proper disciplinary procedures, you’re responsible for enforcing policy consistently. Check with HR or other managers about any prior, similar situations and how they were handled to avoid any accusations of unfair treatment.
• Review objectively. Take a step back and examine the facts and circumstances as an outsider would. Remove personal biases. Being objective helps ensure the termination is not made in the heat of a moment — or based on something inappropriate like discriminatory or retaliatory action.
• Evaluate timing and appearance. Always consider the timing and whether it paints a picture of illegality. For example: Has the employee filed a workers’ compensation claim? Did he or she recently take FMLA leave? Has he or she complained of harassment/discrimination? Did he or she blow the whistle on the company? If the timing looks suspicious, it is critically important to have solid documentation supporting a legitimate business reason for the firing.

Strengthen Your Approach with Expert Resources

The right tools and a clear action plan can help you handle the toughest situations. The Progressive Discipline Smart App from HRdirect is ideal for addressing employee discipline issues promptly and appropriately, as well as providing the necessary backup if termination becomes your only option.

For additional resources and expert direction, check out the free webinar, Avoid Termination Blunders: How to Fire an Employee Legally and Fairly, or the tip sheet, Fire Without Fear: Everything You Must Consider Before Choosing to Terminate.