How To Avoid Wrongful Termination Lawsuits Best Practices For

Bonisiwe Shabane

-Oct 29, 2025, 5:19 PM

how to avoid wrongful termination lawsuits best practices for

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. 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. If an employee is successful at proving constructive discharge, your business may face a five- to six-figure lawsuit. Other than preventing costly litigation, avoiding wrongful termination lawsuits is important because it’s the right thing to do. By preventing and investigating harassment and discrimination in your workplace, you create an environment that is safe for everyone.

As a result of your efforts, you can also decrease the odds of having and losing a wrongful termination lawsuit. In a landmark case involving the National Labor Relations Board (NLRB), constructive discharge was first created as a legal doctrine. Back then, employers in the 1930s used harassment and intimidation to get employees to quit rather than having to fire them. In the 1938 Foods v. NLRB case before the Supreme Court, this method of effectively firing workers was deemed illegal. In a Mission to Grow podcast on avoiding wrongful termination lawsuits, Brian J.

Shenker, principal in the Long Island, New York, office of Jackson Lewis P.C., talked about constructive discharge in the United States today. According to Shenker, “The Supreme Court has defined this doctrine as an employee’s reasonable decision to resign because of unendurable working conditions so that it’s equated with a formal discharge by the employer.” The Equal Employment Opportunity Commission (EEOC) defines a constructive discharge to be any time when you’re effectively forcing an employee to leave by making work conditions so intolerable that they can’t stay. To fit the doctrine of constructive discharge, three key facts must be true. 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. 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. A wrongful termination claim can be devastating to an employer. Per a 2017 Thomson Reuters study, the average award for wrongful termination lawsuits was $797,000. Even if an organization can settle out of court, wrongful termination settlements are still very costly.

Notably, a wrongful termination case has other non-monetary costs. Wrongful termination lawsuits and claims usually severely impact employee engagement and the work environment. They also damage an organization’s employer brand, making it harder to attract and hire top talent. To prevent the headaches and costs of wrongful termination suits and punitive damages, MP’s HR experts share a two-part series outlining key steps to preventing wrongful termination lawsuits. Employers should work with an HR expert, like the ones at MP, to learn more about the labor laws surrounding how a company may or may not fire an employee. These laws will vary from state to state.

Hence, employers with offices in various states, or employees who work remotely in multiple states, need to understand all relevant labor laws to ensure full compliance. Sometimes employees and former employees may file a lawsuit no matter how much organizations prepare. Employers will reduce the likelihood of a lawsuit or devastating compensatory damages if they’ve already procured liability insurance. Similar to the step above, preparation is critical for prevention. An employment lawyer could help review discipline and termination policies to ensure compliance. Connecting with an employment law firm also reduces the impact of wrongful termination lawsuits (including steep compensatory damages) when they do occur.

It’s critical to consult with a labor attorney before terminating anyone, no matter how unsatisfactory their performance, infringement on their employment contract, sexual harassment violation, etc. When consulting with an employment attorney, share any documents and evidence for possible termination. These items may include: Writing a comprehensive disciplinary policy is vital to preventing wrongful termination lawsuits. Employers should work with HR experts to develop a disciplinary policy that complies with all relevant state and federal laws. It must also meet the Equal Employment Opportunity Commission’s guidelines.

Organizations should add the policy to their employee handbook and consider using talent management software, such as MP’s, to disseminate the policy (and handbook) and retrieve signed acknowledgment of receipt. The policy should include these elements: Firing an employee is one of the most legally sensitive actions a manager can take. If not handled properly, it can lead to lawsuits, financial penalties, reputational damage, and legal disputes. To protect the company from legal challenges, managers must ensure fair, transparent, and legally compliant dismissal procedures. At Ultimate Forensic Consultants, we help companies avoid wrongful termination lawsuits by ensuring HR compliance, proper documentation, and fair disciplinary procedures.

This guide explains how managers can avoid lawsuits from employees who feel they were fired unfairly, including best practices, legal steps, and risk management strategies. An employee may sue for wrongful termination if they believe they were fired without just cause or due process. 🚫 No Valid Reason Given – Employee was fired without cause or explanation.🚫 Discrimination – Dismissal based on race, gender, religion, age, disability, or pregnancy.🚫 Retaliation – Employee was fired for reporting misconduct, whistleblowing,...

How To Avoid Wrongful Termination Lawsuits Best Practices For

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