As a business owner, one aspect of running the business can be nightmare-inducing: terminating an employee. Or more accurately – trying to properly terminate an employee. Not only do you have to be concerned with how they will react in the moment, you must also concern yourself with the ramifications that the termination may have on your business. It is difficult to know how a former employee may respond. Everything may be fine, but it could also see you end up in court. No business owners wants to have to defend themselves against a wrongful termination suit. This is why it is imperative that you take the proper precautions when terminating an employee.

Step One: Document Everything

The most important step to protecting yourself against a wrongful termination suit is to document everything. From the moment you realize that you have a problem employee, begin documentation. Document any and all communications you have with this person. If you notice issues with their performance, make a note. Include a description of the incident, the date, the time, and any details that you can provide. Include any supporting documentation you can get your hands on. Make a file specifically for this person, and be sure to include any performance reviews or formal warnings, probations, or any other interactions you have with them. Include any steps that the business takes to help the employee’s performance improve. This will go a long way to showing that you did what you could to allow the employee to stay.

Step Two: Communication Is Key

The main reason for wrongful termination lawsuits is that the former employee was not aware there was anything wrong with their performance in the first place. This is why it is extremely important to have clear and direct communication. If you are having an issue with an employee, address it as soon as possible and be as straightforward as you can be. Make sure that before the conversation is over, the employee understands that they have performance issues that they need to correct, or else they face termination. Give them clear action steps on what needs to change and give them a clear timeframe for when the changes need to be made. This is not the time to spare the employee’s feelings. And again, make sure that this conversation is documented and added to the employee’s file.

Step Three: Protect Yourself & Your Business

If you have had the hard talk with your employee and they still have not improved their performance, then it may be time to terminate their employment. But first, make sure you have done your due diligence and consulted with your attorney to ensure that the reasons for termination are not unlawful. In speaking with your attorney, provide any and all documentation that you have collected on the employee. Be sure to also discuss the finer details of any communications you have had with the employee.

Once this is done, it is time to speak with the employee. You need to sit down with the employee and discuss the reasons for termination. Review the documentation you have collected with them. Be as clear and direct as you can to avoid any confusion on the employee’s part.

If the employee argues with you, this is not the time for you to engage or be defensive. Simply state the facts as clearly and plainly as possible, then end the conversation. For additional protection, it is best if you also have a witness in the room for the duration of the conversation. Do not use a peer of the employee who you are terminating, this is a potential violation of the now ex-employee’s rights. The witness will ideally be someone from HR or another manager. Once the conversation is over, have the employee return any keys, ID badges, or other business-related articles such as parking passes. You will also need to have your IT department remove their access to any computer systems they may use.

Work With Your Attorney

It is best to prepare in advance for any termination. The best preparation involves speaking with your business attorney to be sure that both you and your business are protected from a wrongful termination lawsuit. The business attorney will guarantee that you terminate the employee properly.