When an employee is not working out, termination may seem like a straightforward business decision. In an at-will employment relationship, employers generally have significant flexibility to end employment. But “at-will” does not mean “anything goes.”

A termination can still be unlawful when it violates federal or state law, an employment agreement, or certain public-policy protections. At-will employment is the general rule in most states, but there are important exceptions to look out for. An employer with a legitimate business reason for ending employment, still needs to consider the circumstances surrounding the decision, not just the decision itself as they can create legal risk. Was the employee recently complaining about discrimination? Did they request medical leave or an accommodation? Did they report a safety or wage issue? Is the reason for termination consistent with the employee’s prior performance record and how similar situations have been handled?

As HR professionals and managers, we can’t just say, “We can fire them because we're at-will.” That isn't a sufficient compliance analysis, and the key is not simply determining whether an employee can be terminated, but making sure the decision is lawful, well-supported, and consistent with the employer’s policies and practices.

A termination is not necessarily wrongful simply because an employee disagrees with the decision, believes it was unfair, was a strong performer, or because the employer may have exercised poor business judgment. Unfair and unlawful are not the same thing, and the main issue is whether the termination violated a legal protection or obligation. Some common situations that can create wrongful termination risks include discrimination, retaliation, use of protected leave, and whistleblowing. Termination cannot be based on discrimination of a protected characteristic like Race, Sex, Pregnancy, Religion, National origin, Disability, Genetic Information, Age, or other protected characteristics under applicable state/local law. Retaliation is prohibited and you cannot terminate an employee because they have engaged in legally protected activity, such as reporting discrimination or participating in an investigation. Employees also cannot be terminated because they exercised protected rights like FMLA, wage-and-hour laws, or other protected leave. Additionally, with regard to whistleblowing protections, the termination of an employee for reporting certain illegal conduct or safety concerns can be high risk. There may also be contract and employment agreement issues. Although less common, there are circumstances where an employer may have obligations to a collective bargaining agreement or union contract.

Before approving a termination, HR should take a step back and look at the bigger picture. Here is a helpful checklist:

Has the employee recently:

• Made a complaint about discrimination or harassment?
• Requested leave? (Like FMLA or Paid Sick Leave)
• Requested an accommodation? (Like ADA or PWFA)
• Reported harassment, wage, safety, or legal concerns?
• Participated in an investigation?
• Engaged in another form of legally protected activity?

Then consider:

• Is the stated reason for termination documented?
• Does the documentation support the decision?
• Has the employee previously been told about the performance or conduct issue?
• Are similarly situated employees treated consistently?
• Has the employer followed its own policies?
• Did the decision-making manager make any problematic comments?
• Did the employee's performance suddenly become a problem immediately after protected activity?

Good documentation can be one of an employer’s strongest tools when defending a termination decision. Performance or conduct concerns should be documented as they occur, with clear, factual information about what happened, when it happened, and what expectations were communicated to the employee. Documentation created only after a termination decision has been made may raise additional questions about the employer’s reasoning. HR should also make sure the documentation supports the stated reason for termination and that the explanation remains consistent throughout the process. Avoid subjective or emotional language, and focus on specific, job-related facts. A well-documented termination should tell a clear story: the employee knew what was expected, the employer identified the concern, and the decision was based on legitimate business reasons.

Consistency is key throughout this process and that does not necessarily mean treating every employee exactly the same. In reality, employers should be prepared to explain why employees in similar circumstances received different treatment. Before approving a termination, HR should consider how comparable situations have been handled in the past and whether the employer is following its established policies and practices.

So, what else can HR do to reduce risk? The checklist above is a great start to look for protected activity and employee history. Additionally, train managers to avoid comments that could be interpreted as retaliatory or discriminatory. For higher-risk situations, employers may also want to consider having HR or legal counsel review the decision before taking action.

Termination decisions are an important part of managing a workforce, but they should never be treated as routine simply because employment is at-will. The legal risk often comes not from the termination itself, but from the circumstances surrounding the decision. The safest termination process starts well before the termination meeting, and companies should take a few extra steps before ending employment.

By reviewing the employee’s history, identifying recent protected activity, confirming the reason is supported by documentation, and considering whether policies have been applied consistently, HR can identify potential concerns before they become claims. Ultimately, a sound termination process is about making sure that when an employer makes the decision to end employment, it can clearly explain and support why that decision was made.

Sources: usa.gov; eeoc.gov