Cut Ties With Confidence

May 1, 2012
Avoid accusations of wrongful termination by properly documenting, disciplining and discharging employees.

It’s one of the most challenging parts of being a manager: terminating a bad employee.

Whether it’s a new hire who isn’t working out, or a veteran who violates a policy, sometimes it’s just in the best interest of the company to cut ties. 

If you find yourself faced with a termination decision, take heed. Firing someone in the wrong way can spur an angry employee to sue, putting your budget and reputation at risk. Even if your state allows at-will employment—meaning an employee can be fired at any time without a reason—that doesn’t mean you can do whatever you want without potential consequences. At-will employment doesn’t offer as strong of protection as people think, says Jim Webber, a human resources professional, employment law attorney, and owner of Jim Webber Training-Consulting-Investigations.

While you can’t stop anyone from attempting to sue, you can take steps to protect your shop if a suit moves forward.

“I always say, the one guaranteed way to never have wrongful termination lawsuits is to not have employees,” Webber jokes.

FenderBender talked to experts Webber and Julie Watkin, senior vice president of human resources at ABRA Auto Body & Glass. They offered their best advice on avoiding wrongful termination lawsuits through three key actions: document, discipline and discharge.


Set expectations. Be clear about what you expect of employees, and that they know the rules. Have employees sign a form acknowledging they understand and will comply with the policies. That way it’s clear if someone has broken the rules.

Keep a clear, comprehensive policy manual. Address basics like harassment and discrimination, drugs and alcohol, code of conduct, and everyday things like hours of work and breaks that will and won’t be paid for. The idea is to show employees as clearly as possible what is allowed and what isn’t allowed, which then clearly shows when discipline or termination is needed. You can include as many policies as possible. “There are very few policies that aren’t important,” Watkin says.

Update the manual each year. Write down every problem and action. Documentation is key in proving in court the rationale behind discipline and firing. Even if it’s on a post-it note or iPhone, explain what went wrong and what steps you took to fix a situation. Document each interaction, the date, and what happened. Watkin says ABRA has a specific form on which you can check a box saying you gave a verbal warning to an employee, as well as a formal written warning. Webber says you can document anywhere, in any way, but he also reminds shops to use a secure computer if they’re going to do this digitally. Do this as quickly as possible after the interaction.


Put a progressive discipline policy in a place, but reserve the right not to follow it. Generally a shop will follow the progression of a verbal warning, written warning, final warning and then termination. But in extreme cases, such as a theft, an act of violence, or a major problem with quality, managers reserve the right to fire when necessary. Make that clear in your policies and to employees.

Don’t drag your feet. If you need to talk to someone about an issue, do it right away, Webber says. When you learn of a problem and immediately seek a solution, this resets expectations. It’s harder to reset expectations when a problem occurred weeks or months earlier.


Be crystal clear about why you’re firing. Don’t be afraid to hurt anyone’s feelings—be honest and straightforward. And don’t lie. Many wrongful termination lawsuits result from a misunderstanding about the reasons a person was fired. For example, Watkin and Webber explain, sometimes a manager doesn’t want to say that a person is not a good fit or that their performance was lacking. So the manager will simply say they have to cut the staffer for budget reasons. But then if he or she is replaced, that person jumps to a conclusion: I was fired for my race, gender, disability or another illegal reason.

Check and balance. At ABRA, a manager can’t terminate an employee without consulting human resources. It helps to have checks and balances in place because another person skilled in human resources can make sure the employee was treated fairly and given a reasonable opportunity to improve. If you don’t have a human resources department, consult a trusted fellow manager or a colleague at another shop.

Talk to an attorney or human resources professional. Make sure to cross the t’s and dot the i’s. For example, some states require you to provide a final paycheck. Chat with an expert to make sure you’ve got all the details taken care of.

Don’t be emotional. Remain calm and objective, and avoid firing when angry. If it’s an emotional scene, employees are more likely to seek legal advice, Watkin says.
Minimize embarrassment. Limit details to third parties. “We’re all just human, and everybody’s curious about why someone left and what happened,” Watkin says. “But use standard language like ‘John Doe is no longer with the company.’” Treat people with dignity and that will diffuse the desire to seek legal action, she and Webber say. Another good way of treating people respectfully during a firing is to do it privately, and usually toward the end of the day so it looks like they’re just simply going home. But be sure to have a witness present for the firing. If you’re sued, then it’s not simply one person’s word against another’s.

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