Protect Your Business from Litigation Over Performance-Based Termination

Terminating an employee is never an easy thing to do, but employers in Georgia have a lot of leeway in letting an employee go. Since Georgia, like most states, is an at-will state, “You can be terminated for any reason except an illegal reason,” says Ken Winkler, with Berman Fink Van Horn in Atlanta. “An unfair termination doesn’t mean it’s illegal. I can be a bad employer and say, ‘You know what, you don’t fit in, it’s time to go,’ but that doesn’t make it illegal.”

So what’s an illegal reason? Pretty much anything that violates federal law, such as firing someone for reasons of race, gender, religion, national origin, sexual orientation, pregnancy, and gender status or identity. Employers can also be sued for wrongful termination if the employer has communicated to the employee “that they are not at-will but employed for a [set] period of time,” says Mary Donne Peters, a co-founder at Gorby Peters Law in Atlanta.

Learn more about employment discrimination claims, retaliation claims, and legal protections under anti-discrimination laws.

The Cost of Wrongful Termination Claims

Financial ramifications for wrongful termination depend on the violations, Winkler says, but typically involve claims for back pay, front pay, compensatory damages, punitive damages, liquidated damages (for example, under the federal Age Discrimination in Employment Act and Fair Labor Standards Act), as well as costs and attorneys’ fees. “These cases can range from low five-figures to high six-figures depending on the facts and circumstances of each case,” he says.

Calculations for overtime pay can be “very expensive and potentially catastrophic,” Peters adds, especially if the business doesn’t have the necessary insurance coverage to fund the defense of such claims.

Then there’s damage to your firm’s reputation. “That’s huge,” Peters says. Given the many websites where employees rate employers, “if any employee finds that another has sued and recovered funds, that creates an environment where employees may sue first and attempt to resolve differences second.”

Protect Your Business From Litigation

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Avoiding Legal Claims Over Performance-Based Termination Decisions

The starting point for avoiding litigation over a performance-based termination is making certain your employees know what their roles are, what is expected of them, and whether they are meeting those expectations. “Good, honest communication is critical,” Winkler advises. Performance feedback throughout the year is an “effective step to manage performance. I believe that if an employee is terminated for performance, it should not be a surprise to the employee.”

“There is a quote from Dr. Brené Brown I use: ‘Clear is kind. Unclear is unkind,’” Peters says. “Without fair, specific feedback, you are robbing that employee of the opportunity to improve or to find a job where they can be successful.”

Document Everything for the Termination Process

Along with good communication, retain solid documentation of employee reviews, “So you have evidentiary proof that issues were discussed and that you counseled the employee and gave them a fair opportunity to improve,” Winkler says.

In addition, Peters advises a careful review of offer letters, employee handbooks, and employee reviews to determine whether an employer “has inadvertently created an expectation in the employee’s mind that they have a contractual relationship with the employer that overcomes the presumption of at-will employment.”

And if you do find yourself being sued for wrongful termination, preserve all applicable information. “Do not destroy relevant evidence, either inadvertently or intentionally,” Winkler says. “There are rules against spoliation, meaning the destruction of evidence.”

Terminating Remote Employees

Peters says she is increasingly being asked how to terminate remote employees. Her response? “The same way as any other employee.” The only difference is that if you terminate someone online or by Zoom, “assume someone is recording it,” Peters says.

“Be aware that whatever you say will likely be played to a jury or the Department of Labor or EEOC. Choose your words with care… Put yourself in the employee’s shoes and do everything to make the exit comfortable. Everyone can and should be civil, kind, and specific.”

Managing Employee Performance

Winkler provides a basic template for employee reviews:

1. Notify the employee of the problem, explain how it impacts the business, and why it needs to change.
2. Clearly lay out expectations going forward so the person can correct the situation. “Give fair opportunity to improve,” he says.
3. Finally, explain the consequences of failing to meet expectations, including possible termination.

“If you follow those steps, you are better able to manage performance and to defend a claim if one is brought,” Winkler says.

Find Legal Counsel

If you are facing legal action from a former employee or want to get ahead of legal risks in how you craft company policies or handle employee performance issues, visit the Super Lawyers directory to find an employment law attorney for legal advice.