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Wrongful termination is one of the most frequent case types filed against companies. Legal action of this nature occurs when employees claim the reason for their discharge is unlawful.

You have a responsibility to terminate employees honestly and fairly. According to the American Bar Association, employing individuals creates an implied contract of good faith and fair dealing between you and your staff.

Wrongful discharge lawsuits are expensive and time-consuming. However, there are ways to protect yourself from legal claims and minimize your liability.

Acquaint Yourself With Employment Laws

You must understand what constitutes wrongful termination to take the necessary preventative steps. There are many legal reasons someone may file a wrongful discharge claim against you, including:

  • Discrimination
  • Breach of contract
  • Retaliation
  • Disparate treatment
  • Inconsistent application of policies

Maintain Adequate Documentation

Documenting all employment-related decisions is crucial as an employer. When you have a correctly written paper trail, you can often avoid lawsuits altogether. Ensure you have written paperwork signed by the employee for the following:

  • Handbooks that detail policies and procedures
  • Regular performance appraisals with specific feedback
  • Progressive discipline policies and enforcement
  • Reason for termination with supporting personnel file documents

Having employees read and sign all documentation shows that you effectively communicated policies and corrective actions to them.

Clearly Define Your Workplace Systems And Policies

Create formal documentation for your staff and your managers. Detail the policies and enforcement rules, and create written documentation of procedures to resolve discrimination, harassment or other complaints. This process can stave off potential lawsuits by ensuring your managers use the proper methods when dealing with concerns.

As an employer, you have legal rights regarding your company operations. Terminating employees is a necessary part of running a business. Taking these steps can minimize your liability and prevent wrongful discharge claims against you.