Employers have the right to terminate employees in certain situations. However, there are also laws in place to protect employees from wrongful termination. Generally, an employer can legally fire an employee if:
- There is just cause for termination
- The employee engages in misconduct
- The employee fails to meet performance standards
- The employee violates company policies
- There is a legitimate business reason for letting the employee go
Even in these cases, the employer must follow proper procedures for terminating the employee. They should issue warnings, allow opportunities to improve, and provide evidence to support the termination. Employees who feel they have been wrongfully terminated can challenge the termination.
Just Cause for Termination
Employers can legally terminate workers for just cause. Just cause means the employer has a valid, defensible reason for letting the employee go. Examples of just cause include:
- Ongoing issues with performance, attendance or behavior despite warnings
- Violation of company policies, rules or procedures
- Breach of employment contract terms
- Serious misconduct
- Criminal activity
To prove just cause, the employer must show the employee was aware of expectations, received training and chances to improve, and continued to underperform or violate rules. Documentation is key. The more evidence of ongoing issues and policy breaches, the stronger the case for just cause termination.
Performance Issues
Employers can terminate workers who consistently fail to meet performance standards. However, the bar for performance-based termination is usually high. Employers should not expect perfection.
Issues that may warrant termination include:
- Ongoing failure to meet realistic quotas or quality standards
- Habitual lateness, absenteeism or sleeping on the job despite warnings
- Failure to meet deadlines on important projects
- Inability to complete key job duties despite training
Before firing for performance, employers should:
- Provide written job expectations
- Offer training and coaching
- Issue verbal and written warnings detailing issues
- Give opportunities to improve over a reasonable time frame
This shows the employee was given a fair chance to succeed. It also helps build a case for just cause termination.
Policy Violations
Employees who knowingly violate company policies may be legally terminated. Common policy violations include:
- Sexual harassment or hostile workplace issues
- Failure to comply with health and safety policies
- Breaches of confidentiality or data security policies
- Personal use of company equipment or funds
- Refusal to comply with reasonable employer requests
To justify termination, the policy should be clear and the violation should be proven. For serious violations like harassment, one incident may warrant firing. For minor issues, termination often follows repeated non-compliance with warnings.
Breach of Contract
Employers can terminate workers who fail to honor their employment contracts. Contract breaches could include:
- Refusing to work scheduled hours
- Failure to complete assigned duties
- Taking on unauthorized work outside the company
- Failure to give proper notice of resignation
- Refusal to sign noncompete agreements
If the contract breach is substantial, the employer can legally terminate without warning. Breaches of less vital terms may require written warnings and a chance to rectify the issue.
Serious Misconduct
Serious misconduct often warrants immediate termination for just cause. Examples include:
- Theft of company property
- Destruction of company equipment or records
- Acts or threats of violence towards co-workers
- Intentional wrongdoing that harms the company
- Being under the influence of alcohol or drugs at work
In cases of serious misconduct, employers do not have to provide warning or chances to improve. The behavior is so egregious that immediate termination is justified.
Criminal Activity
Employers can fire employees who engage in criminal conduct under certain conditions. For example:
- Commission of a crime on company property or while performing job duties
- Employee is charged with or convicted of a crime that impacts their job
- Criminal conduct damages the company’s reputation or business
The connection between the crime and the employee’s job duties is important. Employers cannot terminate solely because an employee faces criminal charges. But they can fire employees whose illegal actions detrimentally impact their ability to do their jobs.
Employee Misconduct
Employers can legally terminate employees for misconduct either on or off the job. Common forms of misconduct include:
On-the-Job Misconduct
- Insubordination
- Bullying or harassment of co-workers
- Verbal abuse
- Destruction of company property
- Excessive personal use of company equipment
- Unauthorized recording or photography at work
- Breaches of security procedures
Employers should issue warnings for minor misconduct before terminating employment. Serious or criminal misconduct often warrants immediate firing.
Off-the-Job Misconduct
- Public behavior that damages company reputation
- Criminal charges or convictions that impact ability to perform job
- Breaches of company policies on social media
- Disparaging or disclosing confidential company information
- Actions that violate behavioral standards clauses in contracts
Employers cannot fire solely for lawful off-duty behavior under most circumstances. But they can terminate employees if off-duty misconduct negatively impacts the business.
Legitimate Business Reasons for Termination
Besides just cause or misconduct, employers can legally terminate employees for legitimate business reasons. These include:
Restructuring and Downsizing
Layoffs due to restructuring, downsizing, closures or redundancy are lawful reasons for termination if implemented fairly. Employers should base selections on objective, job-related criteria and apply policies consistently.
Sale of Business
A business sale can lead to restructuring and redundancies. As long as any terminations relate to the sale and are handled properly, they are legal.
Natural Expiration of Contract
Employers can terminate employees when temporary or fixed-term contracts expire. No advance notice is required unless stated in the contract.
Failure to Meet Skill or Education Requirements
It is lawful to terminate employees who fail to obtain and maintain required licenses, training or education. Employers should give reasonable time and training opportunities to meet new skill requirements before terminating employment.
Inability to Perform Essential Job Functions
Letting an employee go who cannot perform essential job functions even with accommodation is lawful, unless the inability relates to a protected ground like disability.
Refusal of New Conditions of Employment
If an employer needs to change fundamental terms of employment like pay, benefits, hours or job duties, employees can legally be terminated if they refuse to accept the new conditions.
Procedures for Terminating Employees
When firing employees, employers must follow proper procedures to ensure the termination is lawful.
Issue Performance Warnings
For most terminations related to performance or misconduct, employers should first issue verbal and written warnings detailing the issues and expectations going forward. Warnings show the termination was justified.
Provide Chances to Improve
In most cases, employees should have a reasonable chance to correct problems before being fired. The time frame depends on the issues involved and the employee’s role.
Review Company Policies
Employers must follow their own disciplinary processes and termination policies. Failing to abide by company procedures can invalidate otherwise lawful terminations.
Document Reasons for Termination
Thoroughly document all incidents, policy breaches, performance issues and other reasons leading to the decision to terminate employment. Documentation provides evidence the firing was justified.
Give Proper Notice or Pay in Lieu of Notice
Employees are entitled to sufficient notice of termination or pay in lieu of notice based on employment laws, common law and contract terms.
Hold an Exit Meeting
Schedule a meeting to advise the employee of the termination, explain the reasons and outline next steps like benefits continuation and severance. Allow the employee to collect personal belongings.
Provide Termination Notice in Writing
Give the employee a formal termination letter re-affirming the reasons for firing and containing information about final pay, references and returning property.
Comply with Final Wage Payment Laws
Employers must provide terminated employees’ final pay within the time period required by state wage payment laws. Unpaid wages can invalidate otherwise lawful terminations.
| State | Final Pay Requirements |
|---|---|
| California | Immediately upon termination |
| New York | Within 7 calendar days from termination |
| Florida | Next scheduled payday after termination |
| Illinois | Within 13 days after termination |
| Pennsylvania | Next regular payday after termination |
Continue or Terminate Benefits
Notify employees when current health insurance and other benefits will end. Comply with laws like COBRA on benefits continuation rights.
By following proper termination procedures, employers can minimize legal risks and successfully end an employment relationship when necessary.
Challenging Wrongful Termination
Employees who believe they have been fired illegally can challenge the termination as wrongful. Grounds for wrongful termination claims include:
- Discrimination based on protected class status
- Retaliation for whistleblowing
- Refusal to commit an illegal act
- Exercise of legal rights like FMLA leave
- Breach of employment contract by the employer
- Termination in violation of public policy
Wrongfully terminated employees may recover damages through lawsuits. Common remedies include:
- Reinstatement to the same or equivalent job
- Lost wages and benefits
- Compensatory damages for injuries like emotional distress
- Punitive damages to punish egregious conduct
- Attorneys’ fees and court costs
Employees terminated for whistleblowing or public policy reasons can also seek remedies through federal and state agencies.
An experienced employment lawyer can assess the case and help wrongfully terminated employees seek compensation. Most offer free consultations to review termination claims.
With proper policies and procedures in place, employers can avoid wrongful termination lawsuits. However, sometimes legal action cannot be prevented despite an employer’s best efforts. In such cases, working with an attorney to formulate a defense is essential.
When Termination Threatens Employee Safety
In certain cases, terminating troubled employees poses physical risks to coworkers or the public. Warning signs include:
- Threats of violence towards supervisors or coworkers
- Serious behavior problems like angry outbursts
- Potential for workplace violence based on risk assessment
- Attempts to acquire weapons
- Stalking and harassment of coworkers
When employee conduct raises safety concerns, experts recommend:
- Conducting a threat assessment to gauge risks
- Putting a response team and safety plan in place before termination
- Having security present at termination
- Disabling employee access to facilities and systems immediately
- Providing threatened coworkers with additional security
By taking appropriate precautions, employers can terminate potentially dangerous employees while maintaining workplace safety.
Alternatives to Termination
In some cases, there are alternatives employers can consider before resorting to termination:
Performance Management Programs
Formalized coaching, mentoring and training programs can help struggling employees improve. Performance management plans should include measurable goals and progress monitoring.
Mutual Separation Agreements
When firing a worker who could sue for wrongful termination, a mutual separation agreement provides severance pay in return for releasing legal claims.
Demotion
Employees unable to meet expectations in their current role may accept a demotion to a lower position rather than be fired.
Secondments
Seconding an underperforming employee to another department can give them a fresh start in a new position.
Transfer
Employers can transfer poorly performing workers to another location or team. A change of environment can motivate improvement.
Conclusion
While termination should be a last resort, employers have the right to fire employees for legitimate business reasons and in response to misconduct. However, most terminations require adequate warning, documentation and adherence to policy to be lawful. Employees who prove they were fired without just cause can pursue wrongful termination claims. Safety must also be considered when firing potentially dangerous staff. With the right policies and procedures in place, employers can protect their legal rights while fairly terminating employees when needed.
