Firing an employee? Watch out for wrongful termination claims

You may have a business dispute that is causing you distress, and you might not be sure how to handle it. The good news is that many people who have been in your situation have found ways out, and you can, too.

As a business owner, you have a number of ways that you can handle any kind of dispute that arises, whether it's a lawsuit against you or a contract that has been breached.

One dispute that arises occasionally for business owners is a wrongful termination lawsuit. In those cases, a past employee may feel wronged and file a lawsuit to seek compensation for being fired wrongfully. Of course, the employee may be completely incorrect, and your decision may have been legal.

What will cause a wrongful termination lawsuit?

A wrongful termination lawsuit is normally caused by illegal acts. For example, if you fire an employee due to their race, gender or ethnicity, that's against the law and could result in a wrongful termination lawsuit.

You can also face wrongful termination lawsuits if you retaliate against employees or violate your own company policies or contracts with your employees.

Here's an example. If your company offers a 15-day probationary period in your employment contract that guarantees an employee a job for that time while they train and get used to the environment, letting them go at day 14 is a violation of that contract. The employee could, technically, file a wrongful termination lawsuit for the violation of their contract with you.

Another possible scenario could be if someone gets hurt on the job. When they return from leave, you want to fire them. It's not a good idea to do that, though. Why? You cannot retaliate against someone for filing a workers' compensation claim. You can fire them for failing to do their job or ignoring workplace rules, but it would be considered retaliation if you fired them for making the claim.

Sometimes, employees get things wrong and misunderstand the reason for their dismissal. Perhaps you noted that they were late several times or kept violating company policies. If you plan to fire someone, it's always best to keep notes and have documentation that proves the reason why you're firing them and shows that it is, in fact, legal. That way, you'll be able to easily defuse any lawsuit that is made, since you'll have evidence to back up your side of the story.