Generally, if you can produce a well-documented business reason for your termination—for example, poor performance—you are more likely to avoid—or win—any lawsuit.
Imagine yourself on the witness stand explaining that a termination was due to poor performance. Then the defense attorney produces a string of performance appraisals—signed by you—that say “satisfactory” or “good.” Case closed. No matter what you say now, you're a liar. You were lying then or you are lying now.
Sometimes it doesn’t even take a formal document to show acceptable performance. Just the fact that you treated the employee like other good-performing employees—i.e., gave raises and bonuses--is enough to convince a jury that you are fabricating the poor performance reasoning.
As many organizations have found out to their dismay, being technically correct in a legal sense is often not enough. Juries often react more on the basis of fairness than of law. And, by the way, so do the rest of your employees. Therefore, it is necessary to evaluate both the actual legal requirements and the softer issue of fairness before terminating an employee.
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Here's another take on pretermination lawsuit prevention—a checklist from HR.BLR.com that recommends answering these questions before firing an employee:
If you answer “no” to any of the questions above, review the situation carefully before making a termination decision.
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