As your business grows, so does the complexity of managing your team. For larger or growing companies, the stakes in employee relations are high — both financially and reputationally. A wrong move in how you discipline or terminate an employee can lead to legal claims, damaged morale, or unnecessary business disruption. If you’re like many of our clients, you’ve probably searched “how to legally fire someone” or “how to discipline employees without legal risk.” Here’s what you need to know.
Document Early, Document Often
Documentation is your first — and often strongest — line of defense; it is also where most employers fall short. Whether it’s performance issues, policy violations, or behavioral concerns, it is essential that you keep clear, objective records.
Best practices include:
- Contemporaneous notes. Jot down details of incidents as they happen — including dates, names, and specific behaviors, as well as records of any verbal exchanges regarding problematic performance or behavior.
- Formal review processes and disciplinary records. Ideally, your company has a formal review process calling for employee performance reviews on an annual, or more frequent, basis. These reviews should be documented and signed by the employee. In addition to these scheduled reviews, employers should maintain a paper trail regarding specific issues throughout the year demonstrating that an employee has been given an opportunity to improve. This may include formal measures such as a performance improvement plan.
- Consistency. Document similar issues the same way across employees to avoid claims of discrimination. Documentation should also include records of positive performance. This will help you reward high-performing employees, but may also come in to play if you need to justify why one employee was retained or promoted over another.
- Clarity. To the fullest extent possible, your records should focus on specific behaviors, rather than vague conclusions or assertions such as an employee having a “bad attitude”. For example, rather than stating that an employee had a bad attitude with a customer, state that the employee ignored a customer in need of assistance, did not use words such as please or thank you, did not make eye contact, or used their personal phone during a customer interaction.
Poor or inconsistent documentation can sabotage even the most justified termination.
Be Careful with Progressive Discipline Policies
Employers often include a progressive discipline policy in their handbooks or other documents – i.e., a policy laying out cause for a first warning, second warning, etc. You don’t have to use progressive discipline, but if you do, make sure that the policy is clear and consistently applied. Inconsistent application or such a policy could lead to claims of discrimination or wrongful termination.
A standard progressive discipline policy might include the following:
- Verbal warning (documented internally)
- Written warning
- Final written warning
- Termination
If you choose to use a progressive discipline policy, it should be consistently applied and documented, but should also be drafted to leave you flexibility for immediate termination in the case of serious misconduct (such as theft or harassment).
Train Your Managers
Even if your HR policies are legally sound, they’re only as effective as the people enforcing them. Many growing companies neglect management training, assuming common sense will prevail. It won’t.
Train your supervisors on:
- How to document employee issues correctly
- What language to avoid (e.g., anything implying discrimination or retaliation)
- When and how to escalate to HR or legal
- How to conduct reviews and disciplinary meetings professionally
An untrained manager’s email or offhand comment can turn a clean termination into a costly lawsuit.
Be Strategic With Termination Timing
You don’t need a “perfect” time to terminate someone, but you should avoid obviously bad ones. Firing someone the day after they return from medical leave or after they’ve complained about workplace harassment can trigger retaliation claims — even if the termination is unrelated.
Ask:
- Is the employee on an uncompleted performance improvement plan?
- Has the employee recently engaged in any protected activity (e.g., requesting medical leave or reporting discrimination)?
- Is your documentation strong enough to justify this decision today?
- Have other similarly situated employees been treated the same way?
If the answer to any of these raises a red flag, hit pause and get legal advice.
Consider a Separation Agreement
When terminating an employee, and particularly for higher-risk terminations (those involving long-tenured employees, employees in a protected class, or situations with weak documentation), a separation and release agreement can provide you with additional legal protection.
Key considerations:
- Tailor the release to your jurisdiction’s legal requirements. This should include language tailored to the laws applicable in your jurisdiction. Many states require a specific recitation for a release to be valid.
- Offer adequate consideration — typically this is at least some amount of severance pay to which the employee is not otherwise entitled. Final paychecks, for example, cannot be conditioned upon a release.
- Include confidentiality, non-disparagement, and reaffirmation of any non-compete or IP obligations.
An enforceable agreement can cost far less than litigating a wrongful termination suit.
Exit Gracefully
Treat termination meetings as a professional conversation, not a confrontation. Keep it concise, respectful, and planned:
- Have at least two people present – this can avoid a “he said-she said” situation. These two people are typically the employee’s direct supervisor, as well as a representative from human resourced.
- Avoid debating the decision — the meeting is for communication, not justification
- If you are using a separation agreement, make sure to have a copy ready to send with the employee at the time
- Be aware of state specific requirements – for example, some states require that the final paycheck be provided on the day of termination, while others require notices regarding unemployment.
- Shut off access to company systems such as emails or internal networks, and retrieve company property promptly
Summary
The bottom line when considering disciplinary action or termination is to think compliance, consistency, and compassion. Terminations are never easy, but they don’t have to end in lawsuits. By tightening your documentation practices, proactively training your team, and knowing when to bring in legal help, you can navigate discipline and termination with far greater confidence — and far less risk.
If your company is scaling and you’re looking to shore up your employment policies or need to handle a high-risk termination, the team at Way Law is here to help. Contact us for a confidential consultation tailored to your industry and circumstances.