How to Fire Bad Employees & Avoid Potential Legal Problems

"What the #%@*!" cried Barney, owner of Aunt Bea's Barbecue Pit, as he read the lawsuit just served on him by the sheriff's deputy. "Wrongful termination!" he bellowed into the telephone at his attorney Andy. "Why that lazy, good-for-nothing Otis was the worst manager I ever hired. And I thought this was a fire 'at will' state!" Barney took a deep breath. "Now, Andy, tell me, this is a frivolous suit, am I not right?"

"Now calm down, Barney," said Andy. "I need more information before I can say for sure. Let me take a look at the complaint. I'll file an extension of time to respond. In the meantime, I'm sure I'll have some questions for you. Also, about my fee...."

"I know, I know, you'll send me an agreement - $200 per hour." Barney slammed down the receiver. "This really burns me up!"

While an excitable fellow, to be sure, Barney homed in on an important employment legal issue -- the "at will" employee. In the United States, most private sector, nonunion workers are employees at will. This means that they are not hired for a specific length of time but rather are hired for some indefinite period. Either the employer or employee can terminate the employment relationship at any time without notice for almost any reason or no reason at all. Under the most basic definition of "at will" employment, the employer may terminate the employee - for cause or without cause -- and not be subject to liability for wrongful discharge. This is such a well-known employment legal principle that some businesspeople - like Barney - who know a little employment law, brandish the "at will" doctrine like a badge and a service revolver, in belief that they can "give the boot" to any employee at any time and for any reason.

In practice, it's not that simple. State and federal laws limit the circumstances under which you can lawfully terminate an at will employee. Furthermore, an employer may think that an employment agreement is at will, when in fact, he unwittingly created a contract that requires him to terminate the employee only "for cause," i.e., some reason recognized by law that shows the employee was unfit for the job.

Like most fair-minded folks, you might raise your eyebrows at the thought that most people can be fired at a whim. The doctrine of employment "at will" has noble beginnings. After slavery was abolished in this country in the 1860s, the accepted and encouraged principle was that a person could leave anyone's employment anytime he or she wished without legal penalty. Conversely, the law determined that if the employee could leave anytime she wished, then the employer should be able to terminate the employee anytime she wished. The pendulum has since swung back to offer more protection to the employee.

This article discusses some of the legal snares you can step into when firing an employee. As with many areas of the law, many problems can be sidestepped using common sense. But as the old saw goes, "common sense ain't all that common." Small businesses are particularly vulnerable to these suits due to typically loose, informal communication channels, good-old-boy and -girl culture, and lack of formal management training. Most sophisticated medium-sized companies, and nearly all large corporations and institutions have human resource departments that spoon-feed their supervisors with carefully designed systems and training on how to hire, promote, and terminate employees. And even those businesses find themselves defending their actions at times. You need to be especially careful.