A number of factors play into whether a particular employee should be terminated from employment. As an initial matter, the employer must determine whether the employment relationship is at-will or contractual. If an employment agreement is in place, termination of the employee should comply with the terms of that agreement or the employer will risk being subjected to a breach of contract claim. Employers should also be wary of any documents that might unintentionally abrogate an employee’s at-will relationship, such as employee handbooks. All documents given to employees that might be construed as contractual in nature (including employee handbooks) should contain a clear disclaimer that employment remains at-will.
If employment is at-will, the employer should consider several things before terminating an employee. First, does the employer have a lawful reason for termination? Employers cannot terminate their employees for any reason prohibited by law, which includes termination based on a protected characteristic (for example, gender, race, ethnicity, marital status, disability, age, pregnancy, or religion) or termination in retaliation for an employee’s exercise of certain legal rights (for example, FMLA/FLSA retaliation, worker’s compensation retaliation, whistleblower retaliation, or labor rights retaliation). If an employer is unsure if the reason for termination is lawful, the employer should consult an employment attorney before terminating the employee.
Second, the employer should consider whether termination is the best option. Many employers expend significant resources in recruiting and training their employees, so terminating an employee is a lost investment to the employer. Often, disciplining the employee and giving them an opportunity to cure their behavior will be more economical for the employer (and it will be more beneficial for employee morale if employees know that they will be given an opportunity to improve before being terminated from employment).
Third, if the employee has been given opportunities to improve and has failed to do so, or if the employee’s conduct is so egregious or severe as to merit termination without an opportunity to improve, the employer should consider whether it has documentation or other evidence of the employee’s unacceptable conduct that will support termination. If the employee has received only positive performance reviews in the past and has no prior records of disciplinary issues, the employer should carefully weigh the elevated risks in terminating that employee. To minimize the risk, the employer should be sure that it is following its own policies as closely as possible, is documenting all prior instances of negative performance or disciplinary issues, and is treating all employees consistently.