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Fire an Employee – Frequently Asked Questions

If you run a small restaurant or a Fortune 500 company, firing someone is never an easy task. There are numerous federal, state, and local laws that you may need to be aware of to avoid being sued for wrongful termination. Here you will find the answers to some of the most frequently asked questions about terminating an employee.

Can I fire an employee for any reason?

In general, an employee cannot be fired for any reason. However, this is not to say that you do not have a great deal of leeway in your decision-making process. In fact, state laws give employers great leeway when it comes to finding reasons to fire an employee. But you should be aware that state and federal laws generally prohibit an employer from firing an employee on the basis of race, sex, national origin, disability, religion, or age. Also, you should not fire an employee because he or she took time off from work for family leave, nor should you fire someone because they made a valid complaint to a government agency about your company’s illegal activities or filed a complaint of discrimination or harassment against your organization.

There are other concerns that you should be aware of as the employee you want to fire is under contract with your company. If the employee has a contract, this generally means that you have made promises to the employee that you are legally bound by. Often these employment contracts will contain termination clauses and will require the employer to show “good cause” before the termination can be finalized.

If I fire an employee, am I required to pay them severance pay?

In most situations, you will not have to provide your former employee with a severance package once your employment ends. However, some states require employers to provide their employees with small severance packages when the employer is closing a factory or facility where employees work.

Also, if you have previously promised an employee a severance package, or if the employee you are laying off is working under a contract, you may have to fulfill your previous promises and provide a severance package. Also, if your company has made a habit of providing severance packages to former employees, you should continue with this policy and provide severance to those you now lay off.

If another employer calls me about a former employee I fired, what should I tell them?

This is really a decision that is up to you. If you don’t feel that the person deserves a good reference, then you have no obligation to give it. However, this does not mean that you should hold a personal grudge and tell the new employer that your former employee was the laziest person in the world.

Instead, try to follow the “less is more” theory. If a prospective employer calls you, tell them that they can only provide the dates of employment and nothing else. If you decide to complain about a former employee, you could open a defamation lawsuit.

I think my company may be employing a dangerous employee. Am I risking a lawsuit by not firing you?

There are a number of states where you could be opening your company up to potential lawsuits and liabilities if you are currently employing a dangerous employee. If you fail to take reasonable steps to evaluate your employees, you could be liable for “negligent hiring.”

For example, if you hire a delivery driver and fail to verify your record containing 5 DUI convictions, your company could be liable if the driver gets drunk while on the job and causes an accident.

Also, if you discover that one of your current employees is a hazard and you decide to keep him on board, you could be sued for “negligent retention.”

Am I entitled to fire an employee for filing a false complaint about my company’s billing practices with a government agency?

This is a delicate situation where “whistleblower” laws are mentioned. These laws are designed to protect employees who expose their employers’ misconduct, health and safety code violations, fraud, or financial mismanagement. Generally speaking, whistleblower laws will protect employees who report to their employers, as long as the employee has honest intent and good intentions. Your business may be in trouble for firing an employee who made a good faith, albeit incorrect, report to a government agency.

However, if an employee “blows the whistle” at your employer with malicious intent (not believing the report is true), then you are free to fire them if you wish. This is because whistleblower laws are not designed to protect employees who simply want to create problems for their employer.

Next Steps for Employers: Seek Legal Advice

If you are laying off an employee, it is best to seek the advice of a legal expert to avoid a potential lawsuit. A local employment law attorney will be able to advise you of your rights as an employer and how to handle the termination of an employee.