Firing an employee can be unpleasant for both the employer and employee, but there are some circumstances where it has to be done. If you have hired employees for your business, it is almost certain that you will need to fire someone at some point. When it comes time to do so, it takes far more than just saying "you're fired." You need to have a legal reason for firing an employee, and there are also proactive steps you should take to protect yourself from a wrongful termination lawsuit.
There are certain reasons for which you can never fire an employee. If you do so, you could face a lawsuit from the fired employee as well as government fines.
These protections are provided by federal, state, and local laws. If one set of laws has a protection that another does not, you must follow the strictest law. If you have multiple locations, you must follow the laws in each location for the employees at that location.
Federal equal employment opportunity laws bar discrimination based upon a list of protected classes. These include the following.
State and local laws can, and often do, add protections to the federal protected classes. For example, many state or city governments have passed laws banning discrimination based on sexual orientation. Other jurisdictions prohibit age discrimination against workers who are considered too young, while federal law only protects workers who are viewed as too old.
Public policy may also prohibit firing an employee in situations that are not discriminatory. One of the most common examples is state and federal laws giving protections to whistleblowers.
A whistleblower is someone who reports safety violations, tax evasion, or other serious misconduct to government authorities. Depending on what is being reported, the whistleblower may be required by law to go straight to the government, or they may need to talk to their employer first to keep whistleblower protections. If an employee makes a report in accordance with whistleblower laws, the employer may not fire that employee in retaliation.
Another common protected situation is military service. Employers must accommodate employees who are called up to the National Guard or military reserves. Firing an employee who is away for protected military service is a violation of federal law.
You also must honor any contractual protections you have given an employee. This might include an individual employment agreement or a union agreement.
Violating a contractual protection is generally only a civil dispute between you and the employee. This means that the consequence of the violation is that the employee can sue you in court. However, serious violations of a union agreement, unlawful attempts to break up a union, or unlawful attempts to prevent employees from forming a union may lead to a National Labor Relations Board investigation and potential fines.
Where the law provides protections against unlawful termination, it also prohibits using a pretext to fire an employee. If you say you have fired an employee for poor performance when you have really fired them because of their race, then this is still a direct violation of anti-discrimination laws.
If you are accused of firing an employee under false pretenses, the court or government investigators may look into your employment records for any disparities in treatment of employees in a protected class. The fired employee will also be able to present evidence showing why they believe they were fired for an unlawful reason.
The potential for these types of claims is why it is important to protect yourself even if you have no discriminatory intent.
When you fire an employee, you must have a lawful reason for doing so. In most cases, this simply means that you must have a reason that is not an unlawful one. The following reasons are considered lawful reasons for firing an employee.
To protect yourself from a claim that you have fired an employee for an unlawful reason, there are several steps you should take to protect yourself. While larger companies will generally have more detailed and formal processes, companies of every size should have similar measures in place even if they are slightly less formal.
If you do not have an employment agreement, employee handbook, or other needed documentation, visit the human resources section of our document library to start creating the legal protections your business needs if you have to fire an employee.