10 Tips: How to Protect Your Business When Letting an Employee Go


By George C. Zumbano,

Terminating an employee is never something you want to do, but it can be necessary because of poor performance or a downturn in business activity. The process only gets worse if you receive a letter from an employee’s lawyer outlining allegations of wrongful termination, discrimination, and related claims.

That’s why employers must take steps to minimize the risks of being sued. Here’s how to put yourself in a good defensive position:

  • Many lawsuits occur not because of lack of termination policies, but because managers are not aware of those policies. Managers and supervisors must be fully trained. If you have a Human Resources Department, make sure all supervisors and managers utilize their services and expertise.
  • Document performance issues as they occur and take increasing disciplinary steps with each infraction. This approach is easier to defend than immediate and unsupported terminations.
  • Suspension is usually a much better immediate step because it gives you time to investigate the facts, instead of relying on assumptions.
  • If you do decide to fire someone, review your written policies to determine that a termination is consistent with them.
  • Determine how other employees were treated in similar circumstances. If treated differently, pinpoint what facts and objective reasons exist for terminating this employee, when other employees were not under similar circumstances.
  • Consider: What is the employee’s status? Have they recently taken a protected leave of absence or made complaints that could be the basis of a claim that they are being retaliated against?
  • Often I am asked whether the employer should tell the employee the reasons for termination, especially if it is an immediate termination. My advice is to tell the truth. Withholding reasons for termination will not protect you from litigation. In fact, for many terminated employees, no explanation (or a vague explanation) raises more questions and may only provide impetus for a lawsuit. The employee can claim that the stated reason given for the termination was a pretext, which is the core of many discrimination claims.
  • The termination message should be given by the employee’s supervisor, with another employee there as a witness. (HR Department is preferred.) Express compassion, but also give concise and honest explanations for termination. Provide the employee with details of next steps, including when and how to leave the premises, return of corporate information and property, final paychecks, outstanding vacation and continuation of health insurance.
  • Pay the employee his or her final wages within the time period required by law. (In Pennsylvania, it is the next regular payday.)  If you are considering offering a severance payment, make sure it is in conjunction with a properly prepared release agreement including the appropriate waiver of all related discrimination laws. The offer must give the employee at least 21 days to accept, and another seven days to revoke after it has been signed by the employee.
  • Lastly, preserve key evidence and a copy of your termination letter for at least four years. There is always the risk of future litigation from a terminated employee. Save all voicemails that involve statements regarding threats, excuses for absences unrelated to any disability, profanity, insubordination and threats of quitting. Print and save screen shots of the employee’s text and social media postings, emails or other writings if the contents reveal employee misconduct.

The above tips are for general guidance in employment termination matters and should be used in consultation with your professional Human Resources Department and legal advisors. The impact of laws and their application can vary widely based on the specific facts of each case.


Zumbano_GeorgeGeorge C. Zumbano is a Partner at Gawthrop Greenwood, PC, where he practices Employment Law and is often selected by judges as a mediator in employment disputes. Gawthrop Greenwood, PC has offices in West Chester and Wilmington, serving clients throughout the greater mid-Atlantic region and nation. For more information, go to www.gawthrop.com

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