Whether you run a small mom-and-pop diner or a Fortune 500 company, firing someone is never an easy task. There are numerous federal, state, and local laws you may need to be aware of in order to avoid getting sued for wrongful termination. Here are the answers to some of the most frequently asked questions about firing an employee.
Can I fire an employee for any reason at all?
In general, you cannot fire an employee for any reason whatsoever. However, this is not to say that you do not have a great amount of leeway in your decision-making process. Indeed, state laws give employers a great deal of leeway when it comes to finding reasons to fire an employee. But you should keep in mind that both state and federal laws generally prohibit an employer from firing an employee on the basis of their race, gender, national origin, disability, religion or age. In addition, you should not fire an employee because he or she took time off work for family leave, nor should you fire someone because they made a valid complaint to a government agency about your company's illegal activities or filed a discrimination or harassment complaint against your organization.
There are other concerns that you should be aware of it the employee you want to fire is under a contract to your company. If the employee has a contract, this generally means that you have made promises to the employee that you are legally required to keep. Oftentimes, these employment contracts will contain clauses dealing with termination and will require the employer to show "good cause" before a termination can be finalized.
If I fire an employee, am I required to give him/her a severance package?
In a majority of situations, you will not need to provide your former employee with a severance package once you terminate their employment. However, some states require that employers provide their employees with small severance packages when the employer is closing a factory or facility where the employees work.
Also, if you have previously promised an employee a severance package, or if the employee that you are firing is working under a contract, you may have to make good on your previous promises and provide a severance package. In addition, if your company has made a habit of providing severance packages to former employees, you should continue this policy and provide severance to those you fire now.
If I am called by another employer about a former employee that I fired, what should I tell them?
This is really a judgment call that is up to you. If you do not feel as though the person deserves a good reference, then you are under no obligation to give a one. However, this is not to say that you should hold a personal grudge and tell the new employer that your former employee was the laziest person in the world.
Instead, try to go by the "less is more" theory. If a prospective employer calls you, tell them that you are only able to provide the dates of employment and nothing else. If you do decide to complain about a former employee, you could open yourself to a defamation lawsuit.
I think that my company may be employing a dangerous employee. Am I risking a lawsuit by not firing him/her?
There are a number of states where you could be opening up your company to potential lawsuits and liability if you are currently employing a dangerous employee. If you do not take reasonable steps to screen your employees, you could be liable for "negligent hiring."
For example, if you hire a delivery driver and fail to check their driving record that contains 5 DUI convictions, your company could be liable if the driver gets drunk while on the job and causes an accident.
In addition, if you find out that one of your current employees is a danger and you decide to keep him/her onboard, you could be sued for "negligent retention."
Am I in the right if I fire an employee for making a false complaint about my company's billing practices to a government agency?
This is a tricky situation that brings up "whistleblower" laws. These laws are designed to protect employees that expose their employers' misconduct, non-compliance with health and safety codes, fraud or financial mismanagement. Generally speaking, whistleblower laws will protect an employee that reports their employer, so long as the employee had an honest and good intention. Your company may get in trouble for firing an employee that made a good faith, although incorrect, report to a government agency.
However, if an employee "blows the whistle" on their employer with a bad intention (not believing the report is true), then you are free to fire them if you wish. This is because the whistleblower laws are not designed to protect employees that simply want to stir up trouble for their employer.
Next Steps for Employers: Seeking Legal Advice
If you are firing an employee, it is best to seek the advice of a legal expert to avoid a potential lawsuit. A local employment law attorney will be able to advise you of your rights as an employer and how to handle firing an employee.