Wrongful Termination Lawsuits 8 Steps For Prevention Part 1 Mp Hr

Bonisiwe Shabane

-Oct 30, 2025, 4:36 AM

wrongful termination lawsuits 8 steps for prevention part 1 mp hr

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: Losing a job is hard enough, but losing it in a way that feels unfair or unlawful can leave you even more frustrated and searching for answers.

Perhaps you were suddenly let go after raising a concern at work, or maybe the reason given just doesn’t add up. Wrongful termination isn’t always easy to spot, but if you suspect your employer crossed the line, it’s only natural to want to figure out what really happened. The challenge is proving it. Employers rarely admit they fired someone for the wrong reasons, so the responsibility often falls on you to show evidence and connect the dots. This is what this blog is for. Below are eight key steps to help you prove wrongful termination and protect your rights.

Employment laws vary widely by state, which means the circumstances that qualify as wrongful termination in one place might not apply in another. Most states follow “at-will employment,” where an employer can terminate workers for almost any reason, as long as it’s not discriminatory or retaliatory. However, some states have exceptions that protect employees more strongly. For example, Montana stands out because it doesn’t fully follow at-will employment rules. Workers there often have more protection against being fired without just cause. If you’re dealing with a situation in that state, it’s worth learning more about Employment Law and Wrongful Discharge in Montana since those protections may help you prove your case.

Knowing the legal standards in your state helps you identify whether your termination was lawful or not. 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. You can't do much about an employee's post-termination emotions. But you can prevent him from some post-termination actions, such as a lawsuit for wrongful termination, if you follow proper procedures. One of the most effective steps your company can take to prevent wrongful termination suits are the proactive ones, beginning from Day One of an employee's working relationship. Communicating your expectations -- orally and in writing -- is essential to preventing lawsuits and claims of biased employment decisions, according to Massachusetts-based human resource outsourcing firm HR Knowledge.

When you bring new supervisors and managers aboard, ensure they receive training in fair employment practices and workplace policies. Leadership training should include orientation on federal and state employment laws, how to be first responders in employee relations and performance-related issues and company-specific processes for handling terminations. Include training on the importance of consistently enforcing and documenting workplace policies, disciplinary action and performance evaluations. Offer supervisory refresher training and one-on-one guidance, coaching and support. Interactive training that includes experiential learning is a plus in offering effective supervisory training, according to Austin, Texas-based management firm Workplace Answers. New-employee orientation should include an extensive review of the employee handbook and workplace policies.

Many wrongful termination suits can be prevented through simply communicating workplace policies and expectations for job performance and workplace behavior. For example, if your company policy justifies termination after five late arrivals in one month, as long as the employee is aware of that policy and the supervisor consistently enforces and documents policy violations,... Everyone who works for the company -- from a rank and file employee to a top director -- should sign acknowledgement forms indicating receipt and understanding of the company policies. When you revise policies, don't assume that one signed acknowledgement is sufficient; require newly signed acknowledgements to ensure that employees are clear and current on all changes. Always provide the employee with a copy of the signed acknowledgement and put the original in the employee's personnel file. Implement a process for handling terminations.

In many cases, a supervisor or manager contacts the human resources department about a performance-related issue or another problem that may warrant disciplinary action or termination. HR then reviews the employee's work records and information the supervisor provides, giving the supervisor an opportunity to talk through the circumstances of a possible termination. Sometimes, the HR manager has veto power over department leaders when it comes to termination decisions, based on HR's expertise and its responsibility for mitigating the company's risk of liability for wrongful termination suits. Wrongful termination claims can be costly, time-consuming, and damaging to a business’s reputation. Employers must take proactive steps to protect themselves from lawsuits while ensuring compliance with state and federal labor laws. Understanding what constitutes wrongful termination, implementing best practices, and preparing for potential claims can help businesses avoid legal risks and maintain a fair workplace environment.

Wrongful termination occurs when an employee is fired in violation of federal, state, or contractual employment laws. While most states, including Michigan, follow the at-will employment doctrine—allowing employers to terminate employees for any legal reason—there are several exceptions that protect employees from unfair dismissals. A well-drafted employee handbook outlining company policies, code of conduct, and disciplinary procedures can serve as a legal safeguard. The handbook should clearly state that employment is at-will, except where contractual agreements state otherwise. One of the most effective ways to defend against a wrongful termination claim is to maintain thorough records. Employers should:

Many wrongful termination claims stem from improper actions taken by supervisors. Employers should: Last Updated on May 30, 2025 by Dave Schoenbeck If an employee suspects they have been discriminated against, they may be able to file a lawsuit for wrongful termination, even if the position was at-will. This means it’s vital for every business owner to know how to avoid a wrongful termination lawsuit. Even if you know your reason for firing that employee was justified, you might have to prove that in a court of law.

Wrongful Termination Lawsuits 8 Steps For Prevention Part 1 Mp Hr

People Also Search

A Wrongful Termination Claim Can Be Devastating To An Employer.

To Prevent The Headaches And Costs Of Wrongful Termination Suits

Similar To The Step Above, Preparation Is Critical For Prevention.

Writing A Comprehensive Disciplinary Policy Is Vital To Preventing Wrongful

Perhaps You Were Suddenly Let Go After Raising A Concern