A company’s potential legal risks can be directly related to how management handles terminations. While it might sound contradictory, it’s important to make the termination process as painless and positive as possible for both the employee and the employer no matter the reason.

For employees, it’s crucial to preserve their dignity, which can help defuse even the most tense situations. Bad feelings can lead to bad consequences. Many lawsuits are filed because of employees’ feelings about how an employer treated them during a separation meeting — not necessarily because their allegations are supported. Providing an adequate reason is also important to help reduce emotional drama. Most important, the employee’s record must support the action.

Are you certain the employee is even aware his or her job is in jeopardy? Have clear expectations been communicated from the time of hire?
Is the communication documented? Has the employee ever requested assistance or additional training? If so, did the employer comply with the request? If not, why not?

What about warnings? Has management met with the employee — with a witness — and conducted an open and interactive discussion about expectations, issues, the employee’s perspective and how the employer can assist the employee be successful? What was the final straw, the final incident, that caused the discharge? Do you have all the details? Was the employee asked for his or her side of the story? An employee should never be surprised at termination.

Paid investigatory leave or paid administrative leave can be efficacious to ensure all the proverbial ducks are in a row. The employer can take its time in completing a thorough examination of the file, checking warnings, signatures on policy acknowledgements, proof of training and confirming information from witnesses. It’s important to do the investigative groundwork in depth to justify the action. The last thing you want is to make a legal and appropriate decision, but with an incomplete record that fails to substantiate the decision.

Of course, the at-will relationship between an employer and employee allows an employer to terminate an employee without cause. An employer can determine an employee isn’t a good fit for the job or organizational culture and terminate as long as there’s no such unlawful reason as retaliation or discrimination.

The employee could disagree, however.  An employer must remain prepared to challenge allegations of discrimination or other unlawful employment practices. An employer’s best defense is always good documentation of a good faith effort to help the employee improve. Consistent disciplinary practices and policy enforcement are crucial in mounting a formidable defense against allegations of discriminatory practices.

This is why it’s vital to involve human resources in all disciplinary actions. They’re not only well aware of the policies, but also the precedents in handling certain scenarios. They’re responsible for the implementation and lawful compliance of the organization’s mission and talent strategy.

If an employee does bring up allegations of unlawful employment practices at the time of termination, an investigation must follow even though the employee is separated.

There are situations in which releases and severance agreements constitute appropriate considerations. Whenever there’s a separation, there’s always the possibility an employee will take legal action. To avoid the threat, there’s an option to negotiate a severance agreement. Most often this type of agreement is used when there’s a lack of documentation to support a termination, but the employer wants to both end the employment relationship and avoid a lawsuit. Severance agreements also are used for offering early retirement or buying out an employment contract early.

A release should be in writing, signed by the employee waiving the right to sue and supported by adequate compensation. The employer must allow the employee time to think about signing it and encourage, in writing, consultation with an attorney to review the release before signing. Generally, an individual must be given at least 21 days to consider whether to sign and then seven days after signing to change the decision.

Such authorized causes of termination as closure, downsizing, health emergencies, installation of labor-saving devices, redundancy or retrenchment still require employer documentation. Business records should reflect the reasons for the actions and support personnel decisions to protect the employer in potential lawsuits.