One of the most common questions I get from employers is ‘What is the proper way to fire an employee?’ California business owners are extremely worried (and with good reason) about getting sued because of all the crazy one-sided verdicts we have seen against employers in recent years, like this $180 million dollar Autozone lawsuit or the case with Roscoes Chicken n Waffles filing for bankruptcy.
Look as a business owner and boss the last thing you want to do is fire someone. After all you hired this person with the idea that your relationship would be mutual beneficial. You help them with a job and income and they help your business succeed with their time and skills.
But we all know that some work relationships just don’t pan out as expected. In those cases you have to do whats best for you and your business (and sometimes the employee).
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Well the good news is that in California employment is AT WILL, which means that in general you are free to fire your employee anytime you want to and for any reason you want to—so long as that reason is not an illegal reason.
BUT… this is California so it cant be that easy for us employers right? Yes that is correct. We still have to proceed with extreme caution before we let one of our employees go, no matter how bad they are at performing their job.
“Now just imagine you could refer to one place to see the potential pitfalls and roadblocks, before terminating employment?”
Well that is what I aim to give you in this guide. The most helpful tips and common precautions to take for California business owners before firing an employee.
(Note: Every situation is unique so there is no way for me to tell what your exact situation is. This post is meant to be general guide for all California employers looking to end a relationship with an employee and the typical things to consider and look out for.)
The Protected Reasons
So I mentioned earlier that California is ‘at-will’ employment but what you have to look out for is what is considered illegal firings. So what is an illegal firing? The most common illegal firing is if the person was terminated for one of the protected reasons. If you fire an employee for one of the protected reasons this is considered discrimination and is illegal!
So the first question you should always ask yourself before terminating an employee is:
Is the Employee a Member of a Protected Class?
Federal law, it is generally illegal to fire an employee due to:
- Race
- Sex
- Religion
- National Origin
- Pregnancy (including pregnancy and childbirth)
- Ethnicity
- Disability
- Age (over 40)
- Citizenship status
- Genetic Information
California state law has all the above plus these additional protected reasons:
- Marital Status
- Sexual Orientation and Identity
- Medical Conditions
- AIDS/HIV
- Political affiliation
- Veteran status
California’s Anti Discrimination laws apply to business that have 5 or more employees.
If the employee you want to terminate falls into one of these many protected classes you will want to proceed with extreme caution! Even if your firing of the employee has absolutely nothing to do with any of the protected reasons (I really hope its not or your just asking for trouble) your employee could still claim its the reason.
Of course most employees who are fired are not happy with you or the situation and whether they really believe you fired them for a discriminatory reason or are just trying to get back at you, sometimes a lawsuit or a complaint will get filed and its not something you have the option of just ignoring.
So what is the big takeaway?
If the employee you plan on firing is in one of the protected classes (minority, female, pregnant, over 40) it is important to make sure that you have as much history and documentation as possible that you are not treating the employee any differently than any of your other employees.
You probably have legitimate reasons based strictly on performance for the firing, but without documentation history to back you up, you will likely have a hard time defending against a lawsuit with so much favoring of the employees in this state.
So to sum this up.
Always proceed with extreme caution if the employee you want to fire is in one of the protected classes.
FMLA and Protected Leave
Besides the Discriminatory Protected Reasons another situation you want to proceed with caution with terminating an employee is FMLA and Protected Leave. FMLA is the Family Medical Leave Act and if your employee is away from work on this leave you usually cannot fire them.
Remember, even though them leaving could put you and your business in a real bind, the employee has the legal right to take advantage of FMLA. So if you fire an employee when they notify you they are taking the leave or you fire them right when they get back, it could be seen as a retaliation against them.
Not only can the employee take the leave and you cannot fire them, they must also be reinstated (some rare exceptions) back to the same position they had when they left.
If one of your employees recently just returned from FMLA leave or notified you they plan on taking it soon, proceed with extreme caution with any plans to terminate this person.
Its pretty tough to prove to the court it was not a retaliatory firing if it happens to close to the FMLA leave so I would recommend avoiding it all together any time near it.
If you really feel you cannot wait and you must terminate the employee, make sure you follow your termination policies carefully and document the termination process and the specific reason for firing the employee.
Documentation And Firing An Employee
To put it simply: Good documentation can be your greatest ally when it comes to terminating an employee.
You want to be sure that you have official policies and procedures in place on how to handle terminations.
You then want to make sure that when one of these situations come up you consistently follow all of your documented and official personnel policies.
That means that every employee you terminate goes through the exact same process and you don’t skip any of your steps or procedures so they are always applied in exact same manner.
Now it should be clear the power of this method. If you have policies and procedures you follow for every single termination and you have documented proof that you used those exact same steps in the firing of the employee making a complaint against you, that’s a pretty powerful argument on your side in the event of a dispute.
Be Clear on the Reasons For Firing
Even though your within your rights to fire your employee at any time you want to always give them a reason.
You want there to be no doubt in the employees head for why they are being fired (at least from your point of view). They may still come back later and say you fired them for an illegal reason but it will look much better for you if you explicitly told them what it was for and there was documentation of that meeting.
Is the reason you fired your employee in your procedures?
Check to see if the primary reason your terminating this employee is covered in your policies and procedures. For example, lets say you are firing the employee because they have been verbally abusive to other employees. Do you have an anti-harassment policy? If you want to fire your employee for harassing others, check to see specifically what your policies say about harassment.
Did the employee actually violate whats in your policy? Was the employee reprimand or given warnings for their behavior and how it violates your company policy?
Every company is different but most specify a progressive disciplinary policy in their employee procedures. This means that the offending employee has consequences for their infractions that start lighter for a first violation and may only lead to termination after multiple offences.
For example: First violation a verbal warning. Second violation a official write up. Third violation a termination.
You could put in your policies and procedures special clauses so that you are not strictly bound to this progressive method, so in that way you don’t have to go through all the progressive phases in special cases for an employee you know has to go immediately for a serious offense.
But, it is highly recommend that you try to follow your progressive policy as much as possible. I’m sure you can guess the reason. It would be yet again more difficult for your employee to claim you fired them illegally if you have documented proof of you going through all the progressive disciplinary policies with them.
It is also very important that you are consistent in enforcing your policies with all employees. We all have our top performing employees who may also screw up once in awhile.
You should follow your disciplinary policy as its written, even for your favorite employees. For example, lets say one of your favorite employees uncharacteristically screws up one time and violates one of your documented policies.
So you decide to give them an exception without any discipline. Later on one of your worst performing employees has the exact same screw up but you decided to terminate them for it. Now you have shown some inconsistency and this employee could decided to use this as evidence if they were to sue.
Lets say the fired disgruntled employee is a pregnant woman and the employee you did not discipline is a man, she could claim the reason she was treated differently was because of her gender and her pregnancy.
Keep an Employee Personnel File
Many companies do not keep an employee file and its a mistake that can cost them. An employee file will have all the relevant documentation of past incidents with this employee.
This file is a great tool to have for the termination process and good to keep around for awhile if the ex employee decides to come back to sue you later. If this file is well organized and documented it can reduce your risk tremendously.
Any past write ups or disciplinary actions against the employee should definitely be in there along with the employees signature acknowledging their receipt of the issues.
Ideally the employee file would have as much information as possible about any and all incidents related to the worker. It would be good to keep copies of past performance reviews. Emails or screenshots of complaints from customers or their co-workers.
Speaking as someone who only defends employers I can tell you how happy your attorney will be with you to see this file with all the information about the employee suing all in one place. It will give you a much better chance of coming out on the right end of a lawsuit from the person.
Employee Retaliation Claims
It is illegal for you to fire an employee in retaliation against them for reporting you for breaking a law.
For example lets say your employee reports that your paying and compensation system does not comply with the laws. If you find out who reported you and the next day they are fired you are going to have a problem.
If an employee is fired very soon after reporting some violation of law by you and your company and then fired, they are going to have a very strong case that you fired them in retaliation for making the complaint.
If an employee reports any concerns about illegal activity or violations in your company you need to take it very seriously. Even if you just think the employee is just trying to cause you a problem, investigate the matter carefully and document the entire history and process. Keep the entire investigation of the alleged illegal activity separate from the complaining employees file.
This way if you do decide to fire this employee later the paper history will show it had nothing to do with retaliation.
If you do decide to fire the employee who made the complaints at a later date make sure to proceed with caution. There should be a clear and documented policy you can point to that can justifies the termination.
Employee Pay and Wage Claims
One of the most common complaints filed by disgruntled employees against their former bosses are wage claims. That is why before you fire any employee you (or your accounting staff) should carefully check all the previous pay records for them to make sure there are no mistakes and the employee has been correctly paid for all their previous work.
If you owe the employee any money like overtime that has not yet been paid, they may file a suit against you. So it is much better to get this all taken care before it comes back to haunt you later.
No matter what the reason for the firing is if you owe the person any wages they are entitled to them and you must pay it out.
Employee Exit Interview
Firing someone, even if they are bad for your business, can be an extremely stressful and uncomfortable situation. I’m sure for most employers they would love to just rip it off like a band-aid, painful but quick and over. Unfortunately I don’t necessarily recommend this method. It would be good to be a little more patient and have deliberate steps with how you handle this situation.
While not the most fun thing in the world there are many advantages to having an exit interview. For one you might be able to get a sense of where the employee is coming from. Do they seem extremely angry? Do you get the impression that they will be filing some type of complaint against you and did they give clues to what it might be? This will give you a chance to prepare yourself.
Also an exit interview is a good chance to clear the air. You can point out again the written policies they violated that led to this moment so hopefully they can see this was not a personal thing.
Severance Pay and Signing a Release
Severance pay? I know what you are probably thinking. I fired this person because they were not a good performer and now you want me to pay (reward) them more for this? Well believe me, short term this is a small benefit to them but long term it has the potential to be a huge benefit for you.
Think of this more as an extra insurance policy. A disgruntled ex-employee who sues you can cost you thousands and thousands of dollars (even if you win the case) and potentially put you out of business if you lose the case. When you give them the severance pay it is contingent on them signing a release.
A release is generally an agreement that they are waiving the right to sue you in the future, in exchange for the severance package. This can be huge, especially for disgruntled employees who will search for a reason to sue you later on.
The person just lost their job so it can be very tempting for them to take what you are offering right then and there instead of waiting months to see how a claim works out.
I hope you found this guide useful and something you can refer back to if your ever in the situation where you may have to fire an employee.
Again every situation has unique aspects to it but this guide is based on the many years of experience we have protecting California employers from employee problems and the issues we see come up over and over again.
Want to Download this entire 2,500 word guide as a PDF?
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