Firing an employee: Protecting your practice from a lawsuit

With ever-increasing frequency, employees are filing discrimination, harassment, and retaliation claims in response to being fired. An employer’s best defense is often the ability to articulate objective and non-discriminatory business reasons for having fired the employee, and produce documentation supporting the termination.

Absent an employment contract defining the term of employment, most employment relationships are presumed to be “at-will,” and terminable by either party with or without cause or notice.

Of course, even though employers may have contractually reserved the right to fire an employee “without cause” or entered into an “at-will” employment relationship, an employer cannot fire an employee for discriminatory, retaliatory, or otherwise illegal reasons.

Firing reasons

Certain acts of employee misconduct are so egregious that it requires little effort to establish the legitimacy of the termination decision. These include criminal acts, such as theft, fraud, workplace violence, patient abuse, falsification of patient records, disclosure of confidential patient information, and diversion of drugs. 

Employers may also find it appropriate, if not necessary, to terminate an employee due to an array of other reasons, such as poor performance, excessive absences, insubordination, or lack of effective communication skills.

Set the stage

A practice manager can take a variety of proactive steps, well in advance of a termination decision, to protect the medical practice from legal action by the terminated employee.

Employee handbook

An employee handbook is a critical risk management tool and often a first line of defense against employee claims of illegal firing.

If properly drafted, it places an employee on notice regarding the employer’s policies and can create certain barriers to litigation or help diminish the risks of a successful litigation against an employer.

Next: Contemporaneous documentation

Contemporaneous documentation

Employers are also well served in defending against employee claims by conducting regular performance evaluations and documenting performance issues, such as evaluations, disciplinary notices, and corrective action plans.

In this regard, managers should be trained to properly investigate employee complaints, as well as address and document performance and disciplinary matters. Before terminating an employee, the employer should gather and review available documentation and confer with the involved parties to confirm the facts supporting the termination decision. For example, an employer who plans to terminate an employee for excessive absences should review the employee’s time records.

Separation agreement and release

Depending on the circumstances and likelihood of litigation, employers may also be prepared to offer the employee separation benefits in exchange for a written release of any employment-related claims.

Generally, termination meetings should be held in person with the employee, and ideally should be attended by the employee’s supervisor and a human resources representative or member of management.

It is important to have two employer representatives present, so as to reduce the risk of any “he said, she said” issues regarding what was discussed at the termination meeting.

An appropriate member of management also should be present when the employee packs his/her personal belongings to confirm that no confidential or business information is removed by the employee. Employers should also remember to collect all keys, company property, and security cards, and to change passwords and locks.   

Further, be prepared to provide the employee with notice of the last date of employment, a final paycheck and information regarding termination benefits (e.g., the Consolidated Omnibus Budget Reconciliation Act and payment for accrued and unused vacation).

Consult legal counsel

It is prudent to consult with counsel before firing an employee, to help assess the potential litigation risks. 

Marianne Monroy, JD, is a partner, and Lauren A. Rieders, JD, is an associate at Garfunkel Wild, P.C., in Great Neck, New York. Send your legal questions to medec@advanstar.com.