How To Prevent A Wrongful Termination Claim Sagaser Watkins Wieland Pc

Fresno 559-421-7000Bakersfield 661-616-1360San Luis Obispo 805-296-5007Hanford 559-421-7000 Fresno559-421-7000Bakersfield661-616-1360San Luis Obispo805-296-5007Hanford559-421-7000 On Behalf of Sagaser, Watkins & Wieland PC | May 7, 2025 | Employment Law Wrongful termination claims can be costly and damaging for employers, but the good news is that there are steps you can take to reduce the likelihood of facing such a claim. By following certain guidelines and maintaining fair and consistent practices, you can help protect your business from legal action. Let’s dive into some effective strategies.

A well-structured employee handbook is essential for protecting your business. It sets the tone for workplace expectations and provides clear guidelines on discipline, performance, and termination. Ensure that your policies comply with California’s labor laws and are regularly updated. Providing employees with a copy of these policies and having them sign an acknowledgment can also prevent disputes down the road. 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. The goal of a termination is not to punish the employee but to protect your business.

BY SHAYNE FITZ-COY, CO-FOUNDER OF SABOT FAMILY COMPANIES Wrongful termination claims cost businesses financial resources and management time. With the median EEOC claim over the last six years exceeding $450,000, based on my calculations, the financial stakes couldn’t be higher. Although I rarely hear that someone who was let go at one of our portfolio companies has filed a legal claim for wrongful termination, when filed, these claims take up valuable management time and... The “wrongful” part varies, but the common denominator is that the person wants more money. I re-learned this lesson the hard way recently with an employee we’ll call “Jay.” He regularly slept at his desk and disappeared for hours during the workday.

His performance issues were obvious during his brief six-week tenure. But when we terminated his employment we faced an uphill battle defending our decision because we had failed to properly document these incidents, resulting in money paid to the employee. 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. 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.

On Behalf of Cameron & Mittleman, LLP | Oct 19, 2021 | Business And Commercial Law, Commercial Litigation | Employers have the right to make their own personnel decisions. However, it seems that every business will have to deal with former employees who claim that they were wrongfully terminated. Even in “at-will” states, employers are prohibited from terminating an employee for legally impermissible reasons. Wrongful termination lawsuits can come as a big surprise to a business, or it may be clear from an employee’s exit that there could be trouble. Regardless of how the employee left and the reasons for the employee’s termination, employers can take several steps to protect the company against such claims.

Businesses can generally terminate an employee for any reason, or no reason at all, unless it violates their employment agreement or the civil laws that protect individuals here in the United States. Examples of wrongful terminations include: Here are five actionable items that businesses can use to protect themselves: 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:

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