The legality of an employee termination is often something that isn't though of until later on in the termination process, or even once the termination is complete. Employees often are unaware of the situation until they are given notice of their termination and are not always given all of the information that contributed to the final decision. In most cases, they are only able to determine the legality of their termination until after the fact. The task of determining the lawfulness of the termination is often up to the employer, who needs to ensure that their actions throughout the termination process remain lawful. Unfortunately that doesn't always happen, either intentionally or unintentionally.
This article will look at the different elements that have been discussed thus far and how they can be used to determine the legality of an employee termination. Topics will include laws, employee rights, employment types, and elements of the termination process. The reasoning behind a termination and some of the more common mistakes that employers make that can contribute to an unlawful termination will also be discussed.
It is the employment type that often dictates what changes can be made to the employment arrangement and when. Going against what is designated according to the employment type often can result in the termination being deemed illegal. The only employment type where termination can be done at any time for any reason without restriction is at-will employment.1 Even then, that reason for terminating an at-will employee must remain in line with state and federal laws in order for the termination to be lawful. Just because they can be fired at any time doesn't mean that they can be fired for no reason at all or because you just don't like them anymore. At-will employment often comes with a document or contract that employers will request the employee to sign verifying that they agree to the terms of the at-will employment; however there is nothing that states you are legally required to sign such a form.2 Sometimes, the terms laid out in those documents contradict the terms of employment that have already be agreed upon and may legally preempt any previous agreements or contracts.
Other types of employment, especially those that involve a contract that dictates the terms of employment, are not as simple. Any kind of employment contract is a legally binding document that both the employer and the employee are expected to uphold as long as the contract is in place.3 The terms laid out in those contracts, whatever they may be, can provide restrictions regarding changes to the employment. Things such as the preset duration of the employment or the contract, the circumstances needed or accepted for termination, and other such details may impede any decision to terminate the person's employment. Should either party-the employer or the employee-act against those terms or fail to uphold their part of the agreement, then legal consequences are possible. Keep in mind that there are restrictions in place regarding whether the contract is written, oral, or implied.
• Additional Paperwork and Agreements-When a person is hired, there are several documents that they often need to fill out and return to their employer. Some of those documents are tied to aspects of the employment type and circumstances that can arise from the conclusion of their employment, either from termination or otherwise. These can be things like confidentiality agreements, non-compete agreements, arbitration and choice of law documents, and ownership rights (i.e. over inventions, patents).4 Such agreements may be built into an employment contract or be their own contract, but they are held to the same legally binding status. Violations of those agreements during termination, regardless of what they are, can also impact the lawfulness of the termination and may be grounds for legal action.
Laws and Rights
It goes without saying that an employment termination needs to adhere to any and all laws on the federal and state levels to remain lawful. This applies to any part of the termination: the reason(s) for the termination, how the termination is carried out, the investigative elements of the process, etc. Violation of any law in regards to employee termination and it's likely the situation will lose all of its validity in the eyes of the law, even if such a violation is initially kept hidden. Likewise, there are employee rights that also need to be respected during termination. Ignoring an employee's legally given rights, such as the right to privacy, autonomy, due process, etc., can also render the legality of their termination moot.
These are two things that are viewed with seriousness in the public eye and by the legal system in regards to how people are treated, not just with employment termination. Even the suggestion that an employee's rights were violated or that some law wasn't upheld at any stage of a termination can warrant the need to take a closer look into the legality of the termination. For employers more so than employees, ensuring that all laws and rights are taken into account and treated with respect when administering any kind of disciplinary measures is incredibly important. Anything to the contrary can result in significant consequences and harm.
The Termination Process
Having a standard process for termination ensures that everything is done correctly and that nothing is left out. Adhering to elements of due process can help prevent necessary steps from being skipped and errors from being made. Even when doing an on-the-spot termination, some parts of that process can be done after the fact (e.g. documentation of offending actions) to help retain the legitimacy of the termination. Serious offenses like theft that trigger immediate terminations often still need to be handled with some degree of care, so even a fast-tracked termination process can help keep things appropriate for everyone involved.5
While everything discussed so far holds value in keeping an employee termination lawful, the most important part that extra care is needed for is the reasoning for the termination itself. That reason for termination still needs to exist even if the employer does not disclose it to the employee.7 They may be expected to disclose that reason later on for things like paperwork, legal proceedings, and references, or as a part of the termination process if there is a formal board that manages terminations.
As with suspected rights or law violations, if it is suspected that a person had their employment terminated for an illegal reason then it's often enough to warrant taking a look at how the termination was handled. Even if the employee does not take action against their employer for being fired for an illegal reason(s), the employer may face penalties under federal and/or state law.8 Those are usually in the form of fines and other financial penalties, totaling in hundreds or thousands of dollars depending on the circumstances.9
Common Termination Mistakes
Trying to keep an employee's termination completely legal can be difficult, so mistakes are not uncommon. They can happen simply due to the circumstances of the situation or because of the lack of experience of those involved (e.g. an employer who has never fired someone before). Just because a mistake happens, however, doesn't mean that the termination is unlawful. Some of these mistakes can cause an employee to feel like there was something off about their termination, regardless of if there was something unlawful about it or not. If you're an employer, that doesn't mean that you should avoid these things in order to hide an unlawful termination-that's not going to help your case if/when you're caught. Avoiding these mistakes can help make the process easier on both the employer and the employee, and just make things go a bit more smoothly.
• No Warning or Advanced Notice-There are certain logistics expected in regards to handling the termination notification. Employers need to be prepared for a number of things, from what will be said to any final work that needs to be done before the employee leaves. However, the most important preparation for the concluding steps of the termination process is actually notifying the employee of what is happening. It's professionally appropriate to allow a terminated employee to have a chance at a graceful exit and to not leave any loose ends.10 Simply handing them a box of their things or locking them out of the building when they show up to work with no explanation is not only rude but it blocks their right to defend themselves and properly face the situation.
• No Witnesses-While it may seem like you're protecting their dignity by taking the employee off to the side and firing them alone, it's not a good idea. When meeting with an employee who is to be terminated, it's a good idea to have at least one other person present to act as a witness. This is usually someone from Human Resources who can act as a neutral party to ensure that the meeting remains civil. The witness can also help with the meeting's events, ensuring that both sides have their say and making sure that the correct things are being disclosed to the terminated employee (e.g. what they need to do before they leave).
• Lack of Finality-Likely because of a desire to make the terminated employee or themselves feel better, employers fail to give the termination any sense of finality. They may not necessarily be firm in explaining the decision or they may express remorse regarding the termination, which may give the employee false hope that they could still keep their job.11 Employers want to make sure that they are being clear and articulate while terminating a person's employment, but they also want to be kind and respectful as they do it. It's a balancing act that, if done incorrectly, can be almost cruel towards the employee and can backfire on the employer. Be straightforward about it and not wishy-washy; the same can be said of how the employee should conduct themselves during the termination as well.
• Withholding Relevant Information-There are a lot of things that need to be discussed when someone is having their employment terminated, so it's not surprising if some of the relevant information is accidentally forgotten. The instructions that an employee needs to follow before they leave are necessary to ensure a clean break from the job and to make sure that things like final pay and benefits are illegally withheld from them. Even things that are not necessarily required for that clean break, but the employee might want to know anyway may need to be disclosed as relevant information. The reasoning behind their termination for example, although it is not always legally required to do so; as most employees do not think that there is anything wrong with themselves, a lack of explanation for their termination may cause them to think that something questionable is going on.
• Poor Timing-Somethings can be chalked up to coincidence, no matter how horrible of a coincidence it is. Employers may want to keep abreast of what is going on with an employee throughout the termination process to avoid any kind of poor timing. For example, firing someone shortly after they've reported their supervisor/employer/the business/etc. for some kind of violation, even if the two events had nothing in common, could make it seem like the person was fired in retaliation for their actions.12 A legal termination could be viewed as illegal very easily in such a situation, so it's best for employers to be careful and to back up their actions with clear documentation.