Employee Termination: Legal Considerations and Best Practices for Employers

The process of ending an employment relationship can be fraught with legal pitfalls. It is essential for employers, particularly small business owners, to navigate this process carefully to avoid potential lawsuits and damage to their reputations.

Understanding that employment in the United States is generally at-will is crucial. This means that an employer may terminate an employee at any time for any reason, as long as it is not an illegal reason. However, there are certain exceptions and protections that employees enjoy under federal and state law that employers must consider.

Document Performance or Behavior Issues

One of the cardinal rules of employee termination is documentation. If an employee is not performing up to the required standards or exhibiting problematic behavior, it is essential to create a written record of these incidents. This record should include dates, details of the incident, and any subsequent actions the employer took. Documentation provides a rationale for the termination decision and can be used as evidence in a dispute.

Discrimination Considerations

The law protects employees from discrimination based on race, color, religion, sex, national origin, age, disability, and genetic information. Therefore, termination decisions must not be influenced by these protected characteristics. To ensure this, employers should apply termination policies consistently and base decisions on objective criteria. This also underscores the importance of proper and effective documentation of performance and behavior issues, as they can be used to counteract any discriminatory claims made by recently terminated employees.

The Role of Severance Pay

While not legally required in most cases, offering severance pay can be helpful for employers. A severance agreement often includes a release of claims, where the employee agrees not to sue the employer in exchange for the severance payment. However, it is important to consult a lawyer when drafting such agreements to ensure they are enforceable.

Communicate the Termination

How the termination is communicated can also have legal implications. It is advisable to hold a private, face-to-face meeting with the employee. Employers should be clear and concise about the reasons for termination and avoid unnecessary or harmful comments that could be used against them later. It should also be professional. Always maintain professionalism during the termination. Emotions will naturally run high, but the person handling the termination must remain calm, respectful, and objective.

Seek Legal Advice

Given the complexities and potential liabilities involved in employee termination, it is wise for employers to seek legal advice before making a termination decision. A knowledgeable lawyer can guide you through the process, help you avoid common pitfalls, and ensure your practices align with the law.

Our Philadelphia Business Lawyers at Sidkoff, Pincus & Green P.C. Can Help if You Are Facing Litigation

At our Philadelphia-based business law firm, we advise small businesses on all aspects of employment law, including termination. We understand the challenges small business owners face and strive to provide clear, effective, and practical legal advice. Speak with our Philadelphia business lawyers at Sidkoff, Pincus & Green P.C. about how we can help you. Contact us online or call us at 215-574-0600 to schedule a consultation. We serve clients in Pennsylvania and New Jersey.