Firing an employee can be one of the hardest things you will do as a business owner. The second-hardest thing is defending your actions in a wrongful termination lawsuit.
You can minimize the risk of this employee “coming after you” by making sure you treat him fairly throughout the termination process. The most frequent mistakes employers make include lying about the reason for termination, not terminating other employees for the same misconduct or performance issues, terminating for a trivial reason, and terminating someone in violation of the law.
In California, the general rule is that employment is presumed to be terminable “at will,” which means that ongoing employment can be terminated by either party. There are many exceptions to this rule, and generally it’s up to the terminated employee to prove an exception applies based on law, public policy or contract.
There are legal limitations on the employer’s right to terminate, most notably the California Fair Employment and Housing Act, which prohibits termination based on race, color, national origin, ancestry, sex (including pregnancy and gender identity), age, physical or mental disability, marital status, sexual orientation, protected medical conditions, or religion. Federal law mimics this law and also prohibits termination based on citizenship or union activity.
California has anti-retaliation and whistleblower statutes, as well as leave of absence statutes, which prohibit employers from disciplining or terminating employees for taking leave for a variety of reasons, including pregnancy, disability, serious health conditions, jury duty, voting, military service and more.
An employer’s right to terminate an employee is also limited by public policy considerations. You can’t threaten termination to coerce the employee into acting against public interest, including committing a crime or concealing a wrongdoing. For example, you can’t threaten to fire your employee unless they testify falsely in your favor, or make them rob a liquor store at gunpoint because you’re thirsty.
Contracts can also limit an employer’s right to terminate employees. You may have an employment agreement that termination will only occur “for good cause.” The employee then has the burden of showing that termination was without good cause. Usually this is done by showing that the employer terminated the employee because of a trivial reason, unrelated to the business needs or goals.
To minimize the risk of wrongful termination claims, make sure that your decision does not violate the law, company policies, or your past practices with employees in similar situations. Ensure that you have all of the proper documentation to support your action and make certain that you carefully draft the notice of termination.
Once you have made sure that all of the appropriate steps have been taken to minimize the risk of litigation, conduct an exit interview and give your employee a chance to be heard.
Mary Luros is a business law attorney with Hudson & Luros, LLP, in Napa, and can be reached at firstname.lastname@example.org or 418-5118. The information provided here is not intended as legal advice, nor does it form an attorney-client relationship with the author. The author makes no representations as to the reliability or accuracy of the above information. In a perfect world we wouldn’t need disclaimers – or attorneys.