Employee Termination: Think Like A Plaintiff’s Attorney

Streamlining the termination process

 

The decision to terminate an employee is never one that should be made lightly. There are a variety of federal, state, and local laws that an employer must consider and comply with when terminating an employee-employer relationship. It is important to keep in mind that laws and regulations differ depending on what jurisdiction you are in, and you should contact a local employment attorney in your area for tailored guidance. 

That being said, there are some practices that an employer can implement early on (long before termination is ever thought of) that can set up an employer for a smoother termination process. Let us discuss a few below: 

1. Know Your Universe 

Is your employee “at will” or not? This distinction is an important one. As of July 2023, all states in the United States except Montana are “at will”. ^[1] If your employee is at will, you can terminate them for any reason (or no reason) so long as the reason is not illegal. There are some exceptions to at-will employment and you should confer with a local employment attorney to better understand your jurisdiction. Some exceptions to keep in mind include if the employee is working under a signed contract, according to a union’s collective bargaining agreement, or in the public section, or if the employee has filed a workers’ compensation claim or demanded payment of overtime wages.  

If your employee is not an at-will employee, you must have “cause” to terminate. This means the reason for termination is justifiable, legitimate, and often for misconduct. Examples of “cause” include insubordination, not complying with company rules, frequent absences, criminal behavior, harassment, or poor performance, to name a few. Review your employee handbook – it may define “cause” and lay out your company’s termination policies and procedures. 

2. Maintain Employee Personnel Files 

One way to prevent practices that lend themselves to wrongful termination claims is to maintain employee personnel files. Create an employee file as soon as the employee is hired to track key events that happen throughout the employee’s tenure. This is especially important if your employee can only be terminated for cause. Things to consider documenting in your employee’s file: attendance, performance reviews, warnings or notices given regarding performance, performance improvement plans, and any complaints the employee has made. It is important to know if your employee has made any complaints or reports of discrimination (e.g., age, gender, disability, race, national origin, or pregnancy) or a hostile work environment. 

When deciding to terminate an employee, review the employee’s personnel file and think to yourself – could there be a potential reason for termination that lends itself to a discrimination or retaliation claim? Has the employee made a report of discrimination, retaliation, or hostile work environment? If yes, you should consult an employment attorney before terminating the employee. 

Other questions to consider: Has the employee’s performance been adequate? Has the employee performed all job duties satisfactorily? If not, are the poor performances documented? Did you tell your employees they were not meeting expectations? Did you work with your employee to try to improve their performance? Best practices include documenting incidents of unsatisfactory performance, informing the employee of those, and working with the employee to improve performance prior to termination. 

3. Comply with Applicable Laws and Policies 

Know the discrimination laws in your jurisdiction. Key federal laws that are commonly raised in wrongful termination/employment cases include ^[2]: 
 

• Title VII of the Civil Rights Act of 1964. Prohibits discrimination based on race, religion, sex, and national origin; 
• Americans with Disabilities Act (ADA). Prohibits discrimination based on disabilities; 
• Age Discrimination in Employment Act (ADEA). Prohibits discrimination based on age;
• Pregnancy Discrimination Act (PDA). Prohibits discrimination based on pregnancy, childbirth, and related medical conditions. 

There are often state and local laws that mirror the federal laws mentioned above that employers must comply with. For example, in Maryland, there is a state counterpart to federal anti-discrimination laws codified under Title VII. Five Maryland counties also have counterparts to the anti-discrimination laws codified under Title VII. It is essential you research (or contact an attorney to research) your jurisdiction to know what state/local counterparts exist. 

Another consideration: how many employees do you have? Some legislation only applies to employers with a certain number of employees. For example, some federal laws only apply to employers with at least 15 employees (e.g., Title VII ^[3], ADA ^[4], PDA ^[5]), while others only apply to employers with 20+ employees (e.g., ADEA ^[6]). Some state/county versions have different employer requirements (e.g., may apply to employers with less than 15 employees). Confer with an attorney if you are unsure which laws apply to your company. 

In addition, review your employee handbook or company policies and procedures regarding termination practices and comply with them. It is good practice to comply with your company’s termination procedures.

4. Termination of the Employer-Employee Relationship 

When you have decided to terminate an employee, it is important to set a date/time, when the termination process can be documented and a human resources representative can attend. Take the time to explain the post-employment process – benefits (i.e. health insurance), retirement, and any other relevant details. Also, use this meeting to collect employer belongings such as laptops, phones, documents, key cards, etc. When completed, add the notes to the employee’s file. Even though the employee has left the company, it is good practice to maintain employee files for a period of time after their departure.

Terminating an employer-employee relationship can be difficult, emotional, and stressful. These are a few suggestions to streamline the process and make it smoother for all parties involved. As always, it is a good idea to contact an employment attorney prior to terminating an employee to get the best advice for your specific situation. 

Notes:

^[1] Termination guidance for employers | USAGov
^[2] This is not an exhaustive list of potentially applicable employment laws. Please contact an employment attorney for further guidance. 
^[3] https://www.eeoc.gov/statutes/title-vii-civil-rights-act-1964 
^[4]  https://www.dol.gov/general/topic/disability/employersresponsibilities#:~:text=Under%20
Title%20I%20of%20the,discriminating%20against%20people%20with%20disabilities. 
^[5] https://www.ada.org/en/resources/practice/legal-and-regulatory/highlights-of-the-pregnancy-discrimination-act_employers#:~:text=The%20Pregnancy%20Discrimination%20Act%20(PDA,her%20position%20because%20of%20pregnancy. 
^[6] https://www.eeoc.gov/laws/guidance/fact-sheet-age-discrimination 

Virginia Grimm is an Associate at Joseph Greenwald & Laake.