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Watch Your Back: How to Fire Someone Without Getting Sued

BySuzanne Lucas, writer
May 09, 2016
> Human Resources

Firing is not fun. Most managers go to great lengths to avoid firing someone, and when it finally comes down to it, you have to let this person go.

After all that stress, the last thing you want is to land in court.

You know that the firing was legal, but that doesn't mean a lawyer or the EEOC won't take up the case, and you'll be forced to spend a fortune defending yourself.

Here's how to reduce your chances of ever ending up in court.

Be Fair and Consistent

In all states but Montana, employment is at-will. That means you can fire someone for any reason or no reason as long as that reason isn't illegal. If that sentence made no sense, you're not alone. It's a weird concept, but here's how it plays out in practical terms. You can fire someone because you don't like her shoes.

You can fire someone for coming in late. You can fire someone because it's Tuesday and you hate Tuesdays. What you can't do is fire someone because she's black or white. You can't fire someone because she's pregnant or Jewish. You can't fire someone because she's old. Got it?

But, just because the law says you can fire anyone at any time doesn't mean a jury will agree. You wake up on Tuesday morning and say, "Hey, I'm going to fire the first person who annoys me today." The concept is perfectly legal, but it won't play out well. So, you go into the office, and Jane comes in late. This annoys you, so you fire her.

Related Article: With Power Comes Pain: The Downsides to Being the Boss

The problem is, John came in late yesterday, and you didn't fire him. Jane now says that you fired her because she's a woman after all her error was the same as John's and you let that slide. Do you really think a jury or the EEOC is going to buy that you fired Jane because it was a Tuesday? Of course not.

You don't have to treat employees identically. You can allow John to work from home because he's a great independent worker while you require Jane to come into the office because she needs more supervision. That's fine. But, if you're going to fire Jane for coming in late, you better fire John for the same offense.

Use Progressive Discipline

If Jane's work is poor this week, don't fire her straight away. Lawyers and juries like to see a pattern of "progressive discipline." HR Expert Susan Heathfield describes it as follows:

Typical steps in a progressive discipline system may include these.

  • Counsel the employee about performance and ascertain his or her understanding of requirements. Ascertain whether there are any issues contributing to the poor performance, that are not immediately obvious to the supervisor. Solve these issues, if possible.
  • Verbally reprimand the employee for poor performance.
  • Provide an escalating number of days in which the employee is suspended from work. Start with one day and escalate to five.
  • End the employment of an individual who refuses to improve.

Related Article:Enough is Enough: Signs an Employee Should Be Fired and How to Go About It

Document Everything

Don't keep things in your head. When you do decide to fire someone, you need your reasons clearly stated in the paperwork. This is a situation where you only get one shot.

If you tell Jane you are firing her because she's late too often, and then Jane gets a lawyer who points out that she's the only person who got fired for being late when other people get away with it, you can't then start saying, "Yeah, but Jane's work was low quality, she annoyed customers, and she took long lunches."

That makes you look like you're grasping at straws. Lawyers see that as "pretext." That means that you fired Jane for other reasons and chose to say she was late because you didn't want to say the real reason. Why wouldn't you say the real reason? The only logical conclusion is that the real reason is illegal. Don't do that. Document the real reason or reasons for firing and stick to it.

Offer Severance

Severance isn't required by law except in a few tiny situations, so you don't have to legally offer it. However, if you want someone to go away without suing you, offering them three months pay in exchange for signing a document called a "general release" drastically lowers your chances of landing in court.

This general release, which must be prepared by a qualified employment attorney, basically says that in exchange for the severance, the employee agrees not to sue in several areas. It's not legal to waive all rights to sue, but this drastically reduces lawsuits.

It's not appropriate in all situations, of course. The person you catch stealing drugs out of the pharmacy doesn't get severance, but the person who was a general poor performer should.


Don't Oppose Unemployment

Many companies go to great lengths to fight unemployment claims. Don't. Yes, when you get an approved unemployment claim, your costs go up. You know what is more expensive? A lawsuit.

You know who sues? Angry people. What makes people angry? When you not only take away their source of income but fight to keep them from getting a small amount of money to help keep them afloat while they look for a new job. People don't don't sue because they were wronged, they sue because they feel wronged. 

This doesn't mean you need to lie about the reason for termination. Fill out the paperwork honestly, but simply add, "We do not oppose unemployment." It's worth the small amount of money to get someone to go away quietly 

Remember, the primary goal in terminating someone is to get them to go away quietly. Do what it takes to do that. It's far cheaper to do things the right way then it is to do a sloppy, cheap firing.

Suzanne Lucas
Suzanne Lucas
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