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At-will employment still has its limits

Small business owners face many uncertainties. Unpredictable factors like the economy, competition and personal issues will always keep you guessing. However, every small business owner who has employees will most certainly face one thing in common: firing someone.

As unpleasant as it seems, sometimes you just have to let someone go. Maybe the employee is not performing well or hasn't been honest with you. Perhaps you are over on payroll and just need to lighten the load. Whatever the reason, terminating an employee is a delicate matter that you may wish to consider and plan for before the situation arises.

Wrongful termination

Like many other states, California has at-will employment. This means that you can fire anyone on your staff without giving a reason. You don't have to explain why or even keep records of warnings. This allows a great deal of flexibility for you. In most cases, you can terminate someone without worrying that the court will hold you responsible for the employee's losses as a result of being fired.

Of course, you may have more serious issues to deal with if the employee accuses you of firing him or her because of some discrimination. Federal law protects people from losing their jobs due to the following:

  • Race
  • Religion
  • Disability
  • Gender
  • Age
  • Sexual orientation

Employers should also avoid any semblance of retaliation by firing someone who has blown the whistle on some unethical practices in the company.

In addition, if your employment contract protects your worker from termination for no reason or without benefits, at-will employment may not apply to your situation. The implied contract exception also applies even if the contract between you was verbal, although it is more difficult for an employee to prove such a contract existed.

Pre-empting a lawsuit

If you have terminated an employee who is now threatening a lawsuit, you may have many questions about your legal standing. On the other hand, perhaps you want to take precautions so that this situation never arises. You can reduce the likelihood of facing a wrongful termination lawsuit by having firm hiring and firing policies in place and following them carefully.

An attorney can guide you in preparing such policies and creating a handbook that will clarify your company's rules to your employees. Such an attorney can also help you devise an employment contract that may provide another level of protection.

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