Managing Employee Terminations: Legal Best Practices and Pitfalls to Avoid

Running a business is difficult — and having to terminate an employee may be one of the hardest things you’ll ever have to do as part of its operations. Employee termination can significantly impact employee morale and company culture. If a termination is not handled correctly, it can also put a business at risk of serious legal repercussions and reputational harm. Not only is firing someone an emotionally difficult task, but there are many statutory and regulatory obligations that must be considered to avoid the potential for litigation.

Here are several tips for employers to keep in mind when it comes to employee termination to help ensure the process runs smoothly:

1. Understand California Employment Laws

There are a broad range of state and federal employment laws that impact the termination process. It’s essential for employers to have an understanding of both employer and employee rights — as well as ensure they are adhering to all applicable regulations regarding employee termination. Remaining compliant is key to avoiding legal consequences.

Notably, upon termination, an employer in California only has 72 hours from the end of an employee’s last shift to provide them with their final paycheck. Failure to do so can result in the company having to pay the equivalent of one day’s earnings for each day the final wages are late.

2. Be Sure That Your Decision is Based on Fact — Not Emotion

The likelihood that you will have to fire an employee on the spot is usually low, unless there are egregious circumstances. While there may be violations and issues that warrant immediate action, be sure that the decision to terminate is based on fact, not emotion. Basing your decision to terminate an employee on established facts — rather than emotion or opinion — is key to minimizing the risk of a wrongful termination claim.

3. Don’t Fire the Employee without Warning

California is an at-will employment state. This means that an employer may fire an employee at any time as long as the reason for termination is not discriminatory. Unless the circumstances warrant an immediate termination, an employer might issue a verbal or written warning and offer an employee the opportunity to correct their behavior before firing them. A company should have its own disciplinary policies in place and have documented evidence that the appropriate termination procedures were followed.

If the employee’s conduct cannot be remedied after a warning has been issued, termination may be the only option. But by first providing a warning, you can help ensure an employee does not feel blindsided upon termination. It can also serve as critical evidence if the company needs to defend itself in a wrongful termination lawsuit.

4. Document the Issues That Led to the Termination

It’s crucial to keep a record of every incident that led to the employee termination. Documenting each issue as it occurs can provide a clear timeline of the events and provide you with a solid defense in the event the employee takes legal action. You should take notes while each incident is fresh in your mind — this can be helpful to remember the details in the event the company later faces a discrimination or unemployment benefits claim. However, it’s important not to let the process go on too long to avoid making a difficult situation even harder.

5. Inform the Employee About Your Decision in Person

It’s important not to inform an employee about their termination by phone call, text, or email. It’s best practice to terminate an employee in person, no matter how difficult the discussion might be. Often, it’s a good idea to have a witness present in the room to offer support to either the employer or the employee if they need it. While the termination should not come as a surprise to the employee, the meeting should be kept short and you must be prepared to communicate that your decision is final. Plan ahead and have any necessary paperwork ready, including a termination letter, information about COBRA, and information regarding the procedures to collect company property.

6. Consult with an Employment Law Attorney

The employment laws are stringent in California and it’s vital for companies to navigate the termination process with the utmost attention to detail and compliance with the law. A skillful employment law attorney can advise you regarding the at-will employment laws and anti-discrimination laws to help you avoid any adverse consequences for your company. They can also help you understand the best practices concerning employee termination to ensure the process is carried out lawfully and ethically.

Contact an Experienced California Employment Law Attorney

Employee termination matters can be complicated. It’s best to have an employment attorney by your side who can ensure you understand the applicable employment laws and remain compliant with your obligations. At White & Bright, LLP, our team of employment law attorneys is committed to providing high-quality representation and adept counsel to employers in California for a wide range of legal matters, including those involving employee termination. We welcome you to contact or call us at (760) 747-3200 to learn more about our legal services.