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Preventing wrongful termination lawsuits

As a small business owner, you realize your employees are your most important asset. Part of managing a business is having to terminate employees from time to time. There are many business reasons to terminate an employee. Small business owners and managers need to be aware of the legal reasons to terminate an employee, and do so in a way that minimizes the risk of a wrongful termination lawsuit.

Even when businesses do the right thing and follow the law, they could still be at risk of a wrongful termination lawsuit by an employee who was terminated. Although employees are "at will" employees, meaning a business can terminate them at any time for any reason, the reason cannot be discriminatory or retaliatory by law.

Under federal law, it is illegal for a business to fire an employee for the employee's:

  • Race
  • Gender
  • National origin
  • Religion
  • Age (when the employee is at least 40 years old)
  • Disability (including pregnancy, or a medical condition related to pregnancy or childbirth)
  • Immigration status (as long as the employee is legally eligible to work in the U.S.)

If an employee complains about being discriminated against because of any of the above reasons, a business cannot legally terminate that employee in retaliation for the complaints.

Under whistleblower laws, an employee cannot be terminated for reporting to the government that the business is engaging in illegal activities. An employee also cannot be terminated for taking time off that's permissible, such as family leave protected by federal law.

Although these guidelines may seem straightforward, even the most law-abiding and careful businesses can feel uneasy about wrongful termination laws and whether they are at risk for a lawsuit. Fighting a wrongful termination lawsuit takes time and energy that a small business may not have. Some employers offer a severance package to an employee upon termination, and in exchange, has the employee sign a release stating they will not sue their employer. This is common for employees who are being laid off because their position is being eliminated, and less common for employees being fired.

If you are worried about a wrongful termination lawsuit, an experienced employment law attorney can help answer questions. As each small business, employee and case may vary based on the circumstances, an attorney can evaluate the situation and help offer guidance. If you need legal representation to fight a wrongful termination lawsuit, having an attorney by your side who is skilled in this area can take a lot of the pressure and stress off, and let you focus on running your business. An attorney can also ensure that the matter is resolved as quickly as possible.

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