Reducing Legal Exposure during the Termination Process


Terminating employees is not an easy task and isn’t something that managers and business owners typically like to do, but let’s face it, it is a fact of business life. There are a lot of factors that go into terminating employees as well as a lot of legal exposure for a company, if not done properly. Here are some steps to look at to help reduce legal exposure during the termination process and ease the burden for all parties involved:
Follow the guidelines of your employee handbook and established company policies. A company’s mission statement or code of conduct establishes a foundation for performance expectations so it is important to ensure that you and your employees are acting within the guidelines of those statements. If the termination is for performance issues or something other than gross misconduct, make sure you have followed the appropriate disciplinary procedures established in your handbook. If you do not have written procedures for discipline or grievance, actions taken previously set the precedent for future actions and consistency is crucial in dealing with employees.
Document, Document, Document. It is important to document performance and disciplinary issues but the documentation must be objective and strictly related to the job and the performance concerns. When documenting performance and/or disciplinary concerns, be sure to discuss the documented issues with the employee and ensure they understand the concerns and the applicable consequences should their performance not improve.
Have an understanding of the employment laws applicable to your business and the situation. Although North Carolina is an employment at-will state, which means an employee without an employment agreement can be terminated with or without cause; there are federal and state laws to consider that trump the employment at-will doctrine. Some of the laws to consider are Anti-Discrimination laws, the Fair Labor Standards Act (FLSA), the Uniformed Services Employment & Re-Employment Rights Act and your specific state laws, including workers compensation, if applicable.
Determine if termination is the appropriate course of action. Ask yourself the following questions: is the reason for termination is business related and doesn’t interfere with state of federal employment laws? Has the employee been made aware of the problem and have they been given ample time and opportunity to correct the problem? Is there appropriate documentation of the issues and actions that have led up to termination? If the decision comes down to termination and it is time for the action to be taken, don’t beat around the bush and drag out the conversation. Avoid common mistakes of making personal statements, apologizing for the termination or telling saying “you wish it didn’t have to happen”, etc. That causes confusion for the employee and only makes the situation worse for all parties involved. Be straight forward, to the point and confident about your decision and keep it strictly business related.