What does employment at-will actually mean? Does it really give the employer the right to terminate an employee at-will, or the employee the right to quit at-will? Of course it does. However, what it DOESN’T state is that an employee can still sue the former employer for being fired and file an unemployment claim.
Employers often forget that firing an employee at-will can produce liability, A LOT of liability. I have seen it frequently in my 15 plus years of HR experience. An employer has an employee who is not performing, not producing and not contributing to their team. So, the employer decides to terminate the employee, thinking that it has the right to terminate. And then, the employee files a lawsuit, stating that the former employer discriminated against him/her, whether it be for race, gender or age. Maybe the employer did not discriminate against the former employee, but the former employee has evidence that backs up his/her claim. For example, suppose the former employee was a female, age 50, who worked in a department predominately composed of males with an age range of 20-25. Guess what? The employer may have let the employee go because she was not performing and was not a great employee, but the department demographics show otherwise. The organization didn’t intentionally let her go because of her age or her gender, but it “appears” that way. Moreover, the former employee could also file for unemployment compensation. You, as the employer, contest the claim, due to the fact that the employee was underperforming and not doing her job. Guess what again? The former employee could actually win, if she states that she “tried her best.” Unemployment officials will more than likely side with the former employee, stating that she was terminated, at no fault of her own. You are then stuck with an increase in your unemployment tax rate and/or paying her unemployment claim.
I won’t get into the unfairness of employment lawsuits that organizations face and unemployment claims that are awarded, but I will caution you, the employer, of a few things you can do to try to mitigate this risk. First – ensure you have a progressive disciplinary process in place. Make sure you have coached the employee of his/her performance issues, provided a verbal warning, first written warning and final written warning, before terminating. This shows that you have given a good faith effort of working with the employee before you made the decision to terminate. Furthermore, document EVERYTHING! Make sure you document every conversation and disciplinary action you have with the employee. The paperwork doesn’t have to be fancy, just make sure it is documented, that it clearly states the conversations you have had with the employee, the expectations you outlined and how he/she was not performing. Also, before you make the decision to terminate, make sure that you have treated the employee equally and given him/her the same opportunity to rectify his/her behavior that you have given others. Being consistent is key.
I can’t promise you will never have to face a lawsuit or unemployment claim, but these tips will most certainly help minimize your employment risk.
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