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Protecting your company from wrongful termination claims

Like other California businesses, your company gains significant advantages from its workers, but it could also incur significant disadvantages as well. Not every employee will work out as you hoped when you hired him or her.

Sometimes, people look better on paper than they do in reality. Others may go through circumstances that cause a decline in their work performance. Still others may never live up to your expectations no matter how hard they try. At some point, you may consider terminating such an employee, but before you do, take steps to protect your company from a wrongful termination claim.

Give the employee the chance to improve

It's possible that whoever trained a particular employee did not do a thorough job. On the other hand, the circumstances causing a decline in performance could rectify themselves, and you could see an increase in productivity and performance. In fact, any number of things could cause an employee not to perform as you intended and hoped. For this reason, you need to give the employee the opportunity to address your concerns and improve. A progressive system such as the following could help the employee and protect the company:

  • Sit down and talk to the employee. You may discover an issue you were unaware of that can be easily fixed.
  • If not, you could verbally reprimand the employee and warn him or her that the next steps include formal documentation if his or her performance does not improve. This is also the time to warn the employee that termination could result from continued poor performance.
  • The next step involves a verbal warning that you document and place in the employee's file as you continue to work with him or her to improve performance. You may decide to give two or three of these warnings before moving to the next stage.
  • You may believe that what your employee needs is a "wakeup call," which could involve a suspension without pay progressing from one day to five days. This communicates your seriousness regarding an improvement in performance and the possibility of termination.
  • If the individual's performance still fails to improve, you may decide to terminate the employee.

Your process doesn't have to exactly reflect the above, but it should contain levels of discipline that show you are attempting to work with the employee. Throughout this process, it is crucial that you document everything. You should even note that an informal counseling session occurred. The more documentation you have, the better positioned your company is should the employee allege wrongful termination if you end up firing him or her.

The same process should apply to any employee. You may want to outline it in your employee handbook so that it doesn't come as a surprise to anyone.

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