What Makes a Wrongful Termination?

Unfortunately, terminations are a guaranteed aspect of any business. Simply put, hiring and firing is part of having your own business. Terminating an employee can cause a plethora of legal woes, unless you do the deed properly. There’s a process that needs to be done when it comes down to involuntary termination. Depending on employee policies or contracts, an employee could have a breach of contract. If the firing process isn’t done properly, you could be sitting on an employment practices liability (EPLI) claim for wrongful termination.

Now, if you’re an at-will employer, this type of thing isn’t going to be a problem for you, but there are still other claims to worry about. It’s important to keep in mind what makes a wrongful termination.

Not Considering Protected Characteristics

There are certain things that you just can’t fire an employee for. This includes age, marital status, race, gender, pregnancy status, request for FMLA leave, sexual orientation, disability, religion, national origin or other protected activities like whistle-blowing or complaint of discrimination. If your reason for firing doesn’t fall under any of these categories, then consider yourself safe to discharge.

Communicating the Decision Inaccurately

By communicating honestly, openly and concise, one can avoid a wrongful termination situation. Don’t talk too much, don’t argue, don’t apologize and don’t try to soften the blow. If there is litigation, this will help avoid future conflict between your company and the employee. For example, if you’re going to let someone go over their performance, don’t compliment them on it. Sending an email praising their work and then firing them later will open up a can of worms for a claim.

Failing to Consult With an Attorney Ahead of Time

Always talk to an attorney first. The fees you’ll incur to talk to a lawyer prior to letting an employee go pales in comparison to what you’ll spend during a lawsuit.

Failing to Retrieve Company Property

Help your past employee move on with these simple steps. Offer them a way to move forward without having to look backwards:

  • Financial transition planning - Offer previous employees a chance to take advice on finding a new job that pays enough to cover their bills. This type of arrangement can also help with the 401(k) process and other retirement planning.
  • Upfront compensation - At the time of termination, write a paper check with the employee’s accrued salary on it to give to them. Don’t forget to factor in vacation days or paid-time-off. These are just some of the things you can do to make sure a wrongful termination claim doesn’t happen.

About Axis Insurance

At Axis Insurance Services, we aim to help our customers identify their exposures and protect themselves. Founded in 1999, we offer insurance programs to a wide variety of professionals and industries including attorneys, real estate, healthcare, architects, and more, and also have a wholesale division. We pride ourselves on offering flexible insurance coverage tailored specifically to each customer’s needs. To learn more about our solutions, contact us at (201) 847-9175 to speak with one of our professionals.

Wrongful termination, employment practices liability insurance, EPLI, employment practices, employment practices liability

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