How To Avoid Claims Of Wrongful Termination In Employment Practices

Bonisiwe Shabane

-Oct 30, 2025, 4:29 AM

how to avoid claims of wrongful termination in employment practices

In a perfect world, employees perform optimally, enjoy high job satisfaction, and stay with one company until retirement. This type of perfection rarely exists. According to the U.S. Bureau of Labor Statistics, the median employee tenure with a single company is 3.9 years. While some staff members resign voluntarily, others are involuntarily terminated. Improper or illegal terminations expose companies to consequential legal issues and financial risk.

Employers must attempt to close all possible doors to post-termination litigation to avoid lengthy and expensive legal battles, adverse publicity, and any detrimental impact on employee morale. Make sure your employees understand their job responsibilities, the company’s policies and code of conduct, any performance issues, and ways to improve their performance. That said, the most important way to avoid litigation is by adhering to all applicable federal, state, and local laws concerning employment. Never fire an employee for an improper or illegal reason. Doing so leads to accusations of discrimination, retaliation, or breach of contract. Emotions run high following an involuntary discharge and some ex-employees are just looking for a fight.

While nothing can totally bar former workers from pursuing legal action, employers can take steps to take the wind out of these individuals’ litigious sails. Get a free trial of Practical Law, the how-to resource with termination best practices, protocols and practical tips for employers on legal risks. The best way to escape a lawsuit it to avoid its inception. Implementing and following proper termination practices minimizes the risk of encountering a wrongful termination claim. Before initiating a dismissal process, employers must understand all applicable federal and state employee termination laws and policy requirements. To protect confidentiality, only include critical individuals in discussions.

In today’s workplace environment, avoiding wrongful termination lawsuits is crucial for both employees and employers. Employers should prioritize clear documentation of performance-related issues and maintain open lines of communication with employees. This proactive approach not only safeguards against legal disputes but also fosters a positive workplace culture. Understanding the legal landscape surrounding termination is essential. Employers must be aware of local labor laws and ensure that their practices align with these regulations to minimize the risk of litigation. By implementing fair and consistent policies, they can better protect their organizations from potential claims.

Training managers and HR personnel on best practices can further reduce risks. Equipping them with the tools to handle employee grievances effectively can prevent misunderstandings that may lead to costly lawsuits. Taking these steps is vital for maintaining a healthy work environment and ensuring legal compliance. Wrongful termination covers various illegal employment practices. It can happen when an employee is let go for discriminatory reasons or in violation of established laws or regulations. Recognizing what constitutes wrongful termination is crucial for both employees and employers.

Wrongful termination occurs when an employee is fired in violation of federal or state laws, contractual agreements, or public policy. Examples include dismissals based on discrimination due to race, gender, age, or religion. Additionally, it can apply when an employee is terminated for exercising legal rights, such as reporting illegal activities or filing for workers’ compensation. Unlawful terminations are a prevalent reality in many industries. It happens when you fire an employee for an illegal cause or when the dismissal doesn’t adhere to termination policies. Other than Montana, all states in the US follow an at-will employment system.

It’s the default employment arrangement where employees can leave their jobs anytime, and you can terminate them for any reason and at any point. Unless the employment contract specifies the termination causes, both parties can end it for any or no reason without incurring legal liability. But not all terminations in at-will employment arrangements are legal. In certain situations, terminating an employee could violate a state or federal law. Lawsuits involving wrongful terminations can be costly, regardless of whether or not you win the case. Alistair Vigier of Clearway says that “Terminating an employee is hard enough without the additional stress of dealing with wrongful termination lawsuits.

Too often, many employers expose themselves to unnecessary liability. This article highlights some tips to help you avoid legal liability for wrongful terminations.” Accusations of wrongful termination can be a significant liability for the company, exposing it to potential reputational and financial damage. For this reason, taking proactive steps to prevent it is essential. Two words that no employee wants to hear and, frankly, no employer wants to say, especially after spending time and investing resources into the recruitment, onboarding, and training process. But the fact of the matter remains that, in the world of employment, termination is not avoidable.

Here at Combined, our HR experts have helped countless employers, just like you, develop a compliant approach to termination. We can help you put the proper procedures in place so that you are protected from disputes and damages following employee dismissal. In this article, we will discuss the proper process for parting ways with an employee. By reading it, you will learn 6 strategies to reduce your risk of wrongful termination claims. In the United States, though limitations apply, all 50 states recognize at-will employment. Navigating wrongful termination claims can be a minefield, especially in states like California, where employment protections are robust.

For businesses trying to thrive, protecting themselves against such legal risks isn’t just smart, it’s essential. Here’s how to build a strong defense strategy that not only shields your organization but also reinforces fairness and credibility. Most U.S. states, including California, operate under an at-will employment framework. It means you can terminate an employee without cause, but not for illegal reasons such as discrimination, retaliation, or other public policy violations. Employees can still pursue wrongful termination claims under certain exceptions, including discrimination (such as age, gender, or religion), retaliation (such as whistle-blowing), or violations of public policy.

Clearly understanding these exceptions is the first step in building a strong defense. "Document or it didn’t happen” isn’t just a saying; it’s often how juries perceive it. Keep thorough records of all performance issues, disciplinary actions, and communications. When terminating, provide written reasons and attach supporting documentation. It not only strengthens your defense but also demonstrates fairness and transparency. Selective enforcement is a red flag.

If only one employee is disciplined for a violation while others aren’t, you may open the door to claims of discrimination or unfair treatment. Ensure progressive discipline, and any termination is applied evenly across all employees in similar situations. Use one platform to manage talent, time, performance, and learning See how Lanteria works and adds value in various industry use cases. Curated content just for you! Check out the Lanteria Blog and subscribe today.

Ready to get started on your path to HR success?Get in touch with our team! The term "unlawful termination" can send shivers down the spine of any HR professional. But ensuring lawful termination isn't just about ticking boxes; it's about creating a fair and just environment. So, what happens when things go awry? The repercussions of wrongful termination aren't just legal; they can tarnish an organization's reputation and morale. This article is your roadmap to navigate the complexities of this issue and ensure your organization stands on the right side of the law.

Effective July 1, 2025, additional protections are available for workers when employers use immigration-related threats to discourage or retaliate against the usage of certain workplace rights. While Washington is an at-will employment state, employers cannot fire or retaliate against an employee who exercises a protected right or files a complaint under certain employment laws. State law gives employees protection in the following areas: Depending on the situation, L&I will investigate your complaint or refer you to the appropriate agency. You may have additional rights against termination or retaliation under a collective bargaining agreement, in your employer’s policies, or under federal law. However, L&I does not have enforcement authority in these areas.

At-will employment means that employers do not need to establish cause or give notice before firing an employee. That being said, it is against the law for an employer to fire or retaliate against an employee for discussing or filing a complaint about a violation of their protected rights.

How To Avoid Claims Of Wrongful Termination In Employment Practices

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