The Ins and Outs of Firing

Posted on Wednesday, March 06, 2019

Know the laws before dismissing problem employees.

Working with a disgruntled employee is hard on management and coworkers alike. But can you fire someone simply because of a bad attitude? What about a lazy employee or a troublemaker?

The answer: Yes and no.

The issues involved in terminations are complex, but by handling them properly, you reduce the chance your company will have to spend a fortune in legal fees to defend itself.

Of course, before taking action, you should check with a labor attorney. And make sure the reasons for any termination are supported by documents and records. Here are some guidelines:

In general, federal and state laws and regulations don't restrict a company from dismissing employees for being negative or lazy if they are employed "at-will." That is, you signed no contract with them or a representative union.
But discrimination laws do require that you apply performance standards across the board.So you're looking for trouble if you only fire employees with bad attitudes who are, say, over the age of 40.
In addition, courts in many states prohibit firing an employee for reasons that flout employee protection rules. This means you can't cite a bad attitude, for example, as a pretext to fire someone if the real reason is that the person filed a workers' compensation claim. Likewise, you can't fire a whistle-blower or someone who refuses to break the law, for example, by refusing to drive an uninspected truck.
You also can't fire an at-will employee if you guaranteed job security in an "implied contract." Legally, an implied contract can exist with verbal statements by a manager such as, "you'll always have a job here if you get the work done."
Even long-standing practices may count in court. For example, you've set a precedent if your company has never fired anyone in its 30-year history unless he or she did something like torch the office. You then may face trouble by suddenly getting tough and discharging people just for "negativity."

Lessons: Having a good employee handbook and strictly adhering to it can help establish a record that protects you in court. Review your handbook and all official company documents to make sure they don't imply job security. Make sure your policies are legal, which is an ongoing process since the laws are constantly changing.

Include an "at will" statement in all job applications, which are signed by future employees. And make sure that managers don't promise or imply job security to staff members or applicants when making employment offers.

Posted in Tax Topics For Individuals, Tax And Accounting Topics For Business

Disclaimer: The information contained in Dulin, Ward & DeWald’s blog is provided for general educational purposes only and should not be construed as financial or legal advice on any subject matter. Before taking any action based on this information, we strongly encourage you to consult competent legal, accounting or other professional advice about your specific situation. Questions on blog posts may be submitted to your DWD representative.