Five Ways to Protect Your Business in a Firing Situation

Letting someone go is never easy. It’s impossible to guess how an employee will react to being fired.  Increased levels of stress and adrenaline can make ordinary people act irrationally, and many disgruntled employees get “lawsuit happy” and take their former bosses to court over the slightest disagreement, sure that they have grounds for “wrongful termination.”

Knowing how to deliver bad news to a worker in the gentlest and most empathetic way possible is a skill worth acquiring. The goal is to prevent employees that are fired from taking legal action. But on the off chance someone does, these tips should make it easier for you to protect yourself and your assets.

1) Know your rights and your responsibilities - Employees have legal rights, but as an employer, so do you. Have the number of a good attorney on hand who can answer questions and provide professional advice in the event of a lawsuit.  NOLO has a feature on its website that allows you to find lawyers in your state. Understand your legal responsibilities before you hire your first employee, much less fire them.

2) Produce up-to-date documentation that supports your decision - It is important to keep records of every recent interaction you have had with a terminated employee.  This can include performance reviews, disciplinary action reports, a list of absences, and records of other types of incidents that led up to the firing.  (You should keep both a hard and digital copy of these documents in case something happens to one of them.)

3) Review all contracts that were drawn up for the individual in question – Before giving notice to an employee, review the terms and conditions of their contract, if they have one. Note the reason for their termination and then highlight areas of concern because these will undoubtedly be questioned in court.  Determine whether you will incur any contractual penalties for firing the individual.  Draft up a letter of termination and include whether it is effective immediately or is effective at a later date.

4) Carry insurance - Employment Practices Liability Insurance (EPLI) protects your business against wrongful termination lawsuits by lightening the blow caused by terminated employee claims.  Defense fees can cost your business an awful lot.  It is better to be prepared by carrying insurance than to be slapped with a lawsuit and not have the coverage needed to pay your legal fees.

5) Have a third party sit in on your termination meeting as a witness – A trusted colleague (preferably an HR type) can provide an accurate description of the events that took place during an employee termination if he or she is called to testify in court. This person can also document the meeting in writing while it is taking place.

About Charissa Arsaoui

Charissa Arsaoui is a freelance writer and internet marketer. Between writing for a number of businesses and publications, she manages to find the time to pursue her other interests which include travel, photography, and crafting. You can read some of her work at
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