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Termination Litigation – How To Avoid An Unwanted Lawsuit

Inevitably there will come a time in which your company has to terminate an employee due to layoffs or personal performance.  It’s not an enjoyable aspect of business. With termination comes the possibility the employee will file a lawsuit against their previous employer for some reason they see as viable. However, with proper knowledge and training, as well as an organized termination plan, your company can avoid potentially devastating litigation.

HR Knowledge put together a great list of tips to help your company protect against termination litigation in the article, "Wrongful Termination: How To Avoid Employee Litigation." Here are some ideas to put into practice right away:

1. No surprises –Document and notify the employee of disciplinary situations that are uncharacteristic of the company’s culture and expectations. When the time comes to terminate an employee due to personal performance, that employee should be aware of the issues that ultimately led to the termination.

2. Be thoughtful – While the employee should be aware that they are skating on thin ice, the actual process of termination will still be a little shocking and scary. Be sensitive to the matter and explain to the employee that they may be better suited for a different position or company, and that this transition is not to be viewed so much as a rejection. Consider offering a severance package to help the employee get on their feet while they are searching for new employment.

3. Insurance – Liability insurance is not cheap, but lawsuits come at a much higher price. In weighing the costs and benefits of each insurance option, be sure that you can select your own attorney and confirm that you will have final say on any settlements before dotted lines are signed.

4. The law is the law – Regardless of how you verbally handle the termination, when it comes down to a lawsuit if there is one thing out of order, your company could lose the case. Keep taxes in order, provide employment materials and guidelines, follow government regulations, and most importantly, be able to prove that you are in compliance with the law.

5. Employee handbooks – If it’s in writing, then it’s foolproof. All new employees should receive an employee handbook explaining all the company’s rules and guidelines. After reviewing that handbook, employees should sign a document noting that they understand and accept what is expected of them.

6. Train the team – It’s important to make sure your employees are all on the same page, and understand how to communicate without discriminating or harassing. This is an essential part of training that should not be skipped.

There are the unfortunate cases in which an employee decides to file a lawsuit, even if the employer follows protocol, remains calm and thoughtful, and discretely accompanies the employee out of the building. In those instances, as long as you have concrete documentation of the employee’s wrongdoings and proof that you are in compliance with federal and state regulations, you will fair much better in court. For more information on how to protect your company from termination litigation, please see the following article, "Wrongful Termination: How To Avoid Employee Litigation."

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