As a small business owner, what steps should I take to make certain I am not accused of wrongful termination by one of my employees?
The first step is to hire an employment attorney to help you set up business-specific policies and procedures designed to prevent claims of wrongful termination—and then to follow them. The second step occurs prior to the actual hire of an applicant. Obtain the written consent of the applicant to check references, and perform a background check to investigate the applicant's Social Security number, previous reviews by prior employers, motor vehicle records, or other records applicable to the job for which the applicant is being considered. Do a simple Google search. Eliminate applicants who refuse to sign a release for the information and give misleading information on a resume or in an interview
Once employees are hired, set out clear job duties and expectations—the more objective the better. Let employees know exactly what they are expected to do and in what time and manner. Develop work rules and consequences for violating them, and make sure employees know what these rules and consequences are! Discipline (don't punish) employees in a consistent manner for violation of the rules (don't play favorites). If you have to be flexible and waive a rule, do so only for a legitimate business reason. A company is more apt to become embroiled in employment-related litigation because it is “nice" and makes an exception to a rule than if it sticks to its rules and polices. Adopt a written policy prohibiting sexual harassment that is part of a broader anti-harassment policy that prohibits illegal discrimination generally. Develop a procedure for employees to utilize in case of a complaint of harassment or discrimination. Send supervisors (and employees if possible) to anti-harassment and diversity training
For all complaints and disciplinary problems, conduct an impartial investigation and make findings—even if the complaint turns into a “he said, she said" saga. If an employee does not perform satisfactorily, document, document, document, so in the event of a lawsuit, you'll be able to show that you warned the terminated employee and gave the employee both a chance to explain and a chance to improve. Never retaliate against an employee for filing a complaint; statistically, more companies are successfully sued for retaliation than for the actual termination. When you terminate an employee, have someone from Human Resources or another manager present, do not get into an argument about the merits of the discharge, and use clear and concise language as to why the employee is being terminated. The reason you give the employee verbally should be the same one that appears on the unemployment notice or pink slip. Inconsistency is the hobgoblin of wrongful termination claims. Don't try to figure out if the terminated employee is entitled to unemployment benefits—leave that to the state's unemployment department
For problem employees, check with labor counsel before terminating. Also consider offering a severance package in exchange for release of all claims (a guideline is two weeks pay for every year of service), and get counsel's help writing the release to be signed in exchange for the payment.
Helen M. Kemp, Division Counsel and Assistant Director, Retirement and Benefit Services, Office of the State Comptroller, State of Connecticut