Employers Rights | How To Protect Yourself

How Employers Can Exercise Their Rights During A Termination

Sometimes it seems employers don’t have any rights. It's true employers lose over 70% of all wrongful termination cases brought to court (source: "Getting Fired" by Steven Mitchell Sack). Over the past 7 years, the average wrongful termination award has been $536,927 with the maximum award being $28,040,000! This is according to Jury Verdict Research.

As you can see, you want to stay out of court if possible. If you go to court, there's a good chance you'll lose and get a big financial penalty. For small businesses, losing a wrongful termination suit could mean bankruptcy or your former employee owning a large part of your business.

So why are the cards stacked against you? Let me give you three reasons.

First, the jury is sympathetic with the terminated employee. Like all of us, every jury member has had an employer screw them around. He or she may have even been a victim of a layoff or firing. Therefore, it's the jury's chance to help the little guy even the score.

So, even when your case against the employee is airtight, you may still lose in court. I know this isn't comforting, but it's a fact you're going to have to live with. Your best course of action is to stay out of court.

You do this by writing a separation agreement with a release of claims and convincing the employee to sign it.

Second, the supervisor often fires the employee without satisfactory documentation. You should know this rule:

"If it's not written down, the jury isn't going to believe you."

This means you have to build a case against the employee before you fire him. To build a good case, you must prove you warned the employee about the bad behavior and performance. Then you must show you gave him chances to improve. After 3 chances, you're justified in firing the problem employee. (For gross misconduct you can often fire for a first instance, but there are exceptions.)

By following this procedure, even a hostile jury must admit your treatment of the employee was fair.

Third, employers often lose wrongful termination suits because they fire for illegal and, frankly, stupid reasons... or at least the employee's attorney can make it look that way. For example, you should never fire a woman because she's pregnant (illegal) or because she likes NASCAR racing (stupid). The jury is going to frown on the illegal reason and feel sympathy on the stupid reason. Either way, you'll likely have to pay a $536,927 jury award.

So what should you do?

Only fire for a legitimate reason. These are 1) poor performance, 2) repeated minor misconduct, 3) gross misconduct and 4) business economics. If you stick with these, your case will be much stronger and your chance of losing will be reduced dramatically.

To get more details on any of these topics, please see the Employee Termination Guidebook. It will show you how to write separation agreements, discipline warnings and reports on gross misconduct. I also give a listing of illegal termination reasons you must avoid. Many of these will surprise you. You may be violating many of them now and not know it. To find out more, click employers rights.

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