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How to Fire an Employee So You Don't Get Sued Terminating an employee, even one who deserves it, is already traumatic. Don't make it worse by setting yourself up for a lawsuit.

By John Boitnott Edited by Dan Bova

Opinions expressed by Entrepreneur contributors are their own.

Every boss will eventually face the difficult task of firing an employee. While seasoned professionals may learn to distance themselves from the process, dismissing someone is rarely easy. Complicating matters is today's litigious society, where businesses constantly face the fear of a lawsuit.

Most businesses are protected to a certain extent by at-will laws, which allow the firing of employees for no reason. This language can also be incorporated into any employment agreements, offering an additional layer of protection. However, at-will employment does not keep an employee from filing a lawsuit for wrongful termination and, even if the courts rule in your favor, your business will be required to pay court costs. It's best to take a few measures to protect yourself before firing an employee to avoid a costly legal process.

Consider probation.

Because it's often difficult to determine an employee's work style before he begins work, many businesses choose to institute a probationary period during which employees may be fired. This doesn't offer total protection from lawsuits, but probationary employees have fewer rights than full employees do. Another option is to bring in contractors or temp workers and try them out before making a decision. While this is a viable option, it may work best during an employer's job market, since good workers are less likely to take a temporary assignment with the promise of full-time work when full-time positions are available already.

Related: How to Discipline and Fire Employees

Document everything.

Often an employee begins showing signs of a problem well before the employer is ready to dismiss that employee. As behaviors are observed, make note of dates, times and actions that are relevant to that employee's eventual dismissal. Issue written warnings and formal performance reviews that require the employee to sign and date them. This can serve as proof that the employer offered the worker the chance to turn things around.

Know the laws.

Before dismissing an employee, a business should become familiar with laws that might protect that employee. Is he in a protected class as stated under Title VII of the Civil Rights Act of 1964? If you're firing an employee protected under the Family and Medical Leave Act, you may be required to reinstate that employee once he or she is cleared to return to work. If the firing is in retaliation for an action the employee took, you may also be liable for wrongful termination.

Related: Avoid These 3 Employment Compliance Mistakes or Risk Fines

Say the right thing.

When it's time to fire the employee, what you say can be held against you. State that you're dismissing the employee "for cause" but don't state specifics. Many workplaces find that simply stating that the company is "going in a different direction" is safer than putting the blame on the employee's behaviors. The discussion should be brief, stating only the facts. If an employee gets emotional, the manager should continue to stay on track, keeping as professional as possible.

Involve HR.

A severance package can go a long way in minimizing an employee's potential anger. On the day of the dismissal meeting, invite a representative from HR to sit in and handle the paperwork. This will allow the employee to shift his or her focus to logistics rather than on having been let go. For small businesses without HR departments, having an office manager sit in on the process could be just as effective.

While dismissing an employee is never easy, by working hard to prepare in advance, a manager can ease the transition and return to his or her tasks as quickly as possible. In many instances that manager will never hear from the employee again, but if a terminated employee does choose to take legal action, a well-prepared manager should have nothing to worry about.

Related: Firing a Popular Employee

John Boitnott

Entrepreneur Leadership Network® VIP

Journalist, Digital Media Consultant and Investor

John Boitnott is a longtime digital media consultant and journalist living in San Francisco. He's written for Venturebeat, USA Today and FastCompany.

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

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