All businesses, especially small business owners, dread the thought of a wrongful termination claim. Every business, however, will sooner or later have to terminate an employee whether it be due to performance or downsizing. With this termination comes the fear that the employee will attempt to sue or file a claim against their employer.
How you handle the employee’s termination process will very likely have a direct impact on whether or not they decide to file a wrongful termination claim. Even if you have a termination policy that you’ve communicated to your employees and follow the policy when terminating them, they may still file a lawsuit.
Here are some tips to follow so your company can avoid a wrongful termination lawsuit.
1. Terminate Thoughtfully
Almost every termination is a surprise, even if an employee recognizes it is going to happen. This form of rejection is not taken the same by all people. You should position the termination in a way that helps your employee understand that even though you are letting him go, he may find better and more suited employment somewhere else. It does not always work, but using sympathy and compassion may soften the blow and go a long way. Offering severance to help employees transition for a short time is also helpful. However, if you offer severance, we recommend having the employee sign a release of claims.
2. Ensure You Follow All Federal and State Employment Laws
Make sure you understand which federal and state employment laws apply to your business. If you are unsure, check with Danz Law PLLC. We specialize in labor and employment law. It is best practice for your company to speak with us annually to review procedures and policies as many change each year.
When terminating an employee, you have to follow the laws associated with laws promulgated by the DOL (Department of Labor) as well as all other federal, state and local employment laws.
Consulting with Danz Law is also in your company’s best interest before initiating termination procedures. We will review any documentation and make recommendations in order to minimize your risk of claims.
3. Define Expectations
If you find you have to let an employee go, or terminate his/her position, it should not come as a big surprise to them. If it is due to performance issues, you should have documentation of any counselings and disciplinary measures taken. Having a system in place, whether you are a large company or a small business, to identify performance objectives is important. This system will help you identify if an employee is not meeting expectations and can be used in termination decisions. This system will also help your business in motivating and training staff members.
4. Liability Insurance
Liability insurance premiums can be expensive, but they are a small investment when you look at the expense of defending your company in a lawsuit. Termination claims are always expensive for the business owner. Understand your insurance options though as not all companies offer the same coverage. You want a policy that allows you to choose the attorney and one that cannot agree to a settlement without your consent.
5. Follow All Employment Laws
Wrongful termination claims can be filed even if you know you’ve done everything right. You are still going to have to defend your case in court so you must have records that are kept in order. Your company must also follow all employment laws, even the simple ones, such as posting employment materials and government-required labor materials. Not following even the small, simple laws could be the downfall of your case.
Where to Find Help for a Wrongful Termination Lawsuit
Danz Law will provide knowledgeable representation for your business. We have gained a wealth of experience in business operations and management and have a history of helping business managers and entrepreneurs with key aspects of legal compliance. Not only is Danz Law the law firm that you want to represent you with a wrongful termination claim, but we are also ready to be your advisor and counselor with any other employment-related issues.