Employers – Are You At Risk For A Wrongful Termination Lawsuit?

The decision to terminate an employee is almost never an easy one. Once the decision is made, there are steps that can be taken to reduce the risk of an employee filing a wrongful termination lawsuit against you. As the majority of states are “Employment at Will” states, that does not restrict a former employee from filing a wrongful termination lawsuit against you. Under that law in most states, if there is no employment contract, workers are employed on an “at-will” basis. This essentially means that employers have the right to terminate employees at any time for any reason other than discrimination, and rightly so, employees have the right to leave the organization at any time.

The decision to terminate an employee should not come without prior warnings. The steps leading up to the termination should be documented in the personnel file of the employee. This should include the employee’s signed statement that they received a copy of the employee handbook detailing the company’s policies and procedures, verbal and written warnings, performance evaluations, and any other materials that the company deemed necessary to show disapproval of the performance, actions, or behavior of the employee.

Having this information can become very useful to establish a pattern that the employer has tried to counsel the employee for the better. The EEOC requires that employers keep all personnel or employment records for one year. If an employee is involuntarily terminated, his/her personnel records must be retained for one year from the date of termination.

Regardless of the decision and the documentation that has been made for the employee, they may feel that they were unjustly targeted and still try to find other ways to justify a wrongful termination. Once the decision to terminate has been made, there are several factors that employers should consider before executing the decision.

The employer should consider whether or not the employee:

  • Has filed a workers compensation claim?
  • Are they pregnant or have recently given birth?
  • Are they over the age of 40?
  • Have they taken any type of leave in the past year?
  • Their racial or ethnic background?
  • Have they recently filed a grievance or made a complaint about something?

Considering these factors could put employers in a better position to defend themselves against a wrongful termination lawsuit. Be sure to have all documentation in place to prove the termination was not based on one of the above factors. After the matter is finalized, be sure to protect the interest of the company by securing all equipment and codes given to the employee. You can read more about ways to protect yourself against Employee Sabotage.


6 thoughts on “Employers – Are You At Risk For A Wrongful Termination Lawsuit?

  1. Good article! Employers who have policies and procedures built around taking these points into consideration will greatly minimize their risk of lawsuits.

    Employers might also want to consider whether the employee has ever requested a reasonable accommodation for a disability or religious observance. I would also counsel the employer(s) to look at the laws of the state in which the employee is employed as some states have anti-discrimination laws that provide protection beyond that provided by federal laws.

    1. Hi Emplawyerologist- Those are good points that you brought up that were not in the article. Disabilities as well as religious beliefs could also be great reasons for an employee to want to file a wrongful termination lawsuit. Thanks for shedding light on that!

  2. It’s a good article. But as a practical matter few ex-employees will file wrongful termination suits. It’s very hard to discover evidence that would support such suit. Not only that, ex-employees may not afford to pay attorney fees.

    Ex-employees should also consider the possibility of being blackballed if they win a wrongful termination suit. The goal is to become re-employed….isn’t it?

    1. Hi- Thank you for your comment. Yes it may only be a few ex-employees that want to file a wrongful termination lawsuit, but it only takes a few to cause unjust hardships for the employer especially if they did everything by the book. Depending on the the route that they take to file the lawsuit, they may not have to pay out of pocket costs. They could file a complaint through the EEOC or go to a law firm that works off of contingency.

      I do not see how the fear of being blackballed would prevent them from regaining employment. How would the new potential employer know that they have filed or have a pending wrongful termination lawsuit unless the employee brings it up?

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