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Termination of At-will Employment: Top 6 Questions

Wed April 2, 2014 Publications

Some lawyers go to law school to try cases. They are excellent advocates who enjoy cross-examining witnesses and making closing arguments to juries. They are good to have around when you need them. But, let’s hope you don’t.

I lead a team of experienced employment litigators, but the most important part of what we do is providing day-to-day counseling. We think ahead. We advise business owners and managers on how to avoid potential risks and make the best workplace decisions for their business. Among the most common calls for advice are those that involve the termination of an employee. Termination is a high-risk action, even when employment is at-will. Here are the top six questions related to termination of at-will employees.

1. Do I need to have a good reason to fire an employee? No. Florida is an employment at-will state. This means that you may terminate an employee at any time for any reason, so long as:

  • The reason is not unlawful.
  • There is no contract requiring employment to continue for a specific duration of time.

From a risk management perspective, it is still important that you investigate the facts, consider the employee’s side of the story, examine the employee’s personnel file and think through the final decision. [Note: Florida is also a right-to-work state, and many people mistakenly use this term when they mean employment at-will. Right-to-work means that an employee has the right to work for a unionized employer without becoming a dues-paying union member.]

2. Should I give a written reason for my decision? No. We suggest that you communicate the termination verbally as a decision made in the best interest of the company. In the event that you feel compelled to say more, your explanation should be verbal, concise, well-considered and well-counseled.

3. Must I provide a payout for unused accrued leave? It depends on your policy. If your policy is “use it or lose it,” then no payout is required. A policy that is unclear or silent creates potential liability, which you should discuss with your employment law counsel.

4. Is an employee entitled to review or copy his or her personnel file? No. Personnel files belong to the company and need not be disclosed. In contrast, a federal, state or local government employee is entitled to review and copy his or her personnel file.

5. Should I challenge the claim for reemployment assistance (unemployment compensation)? Consider each claim separately. You avoid liability if you prove the termination was due to misconduct. However, you must consider that:

  • Misconduct is difficult to prove under the law.
  • Your challenge to a claim may provoke hostility and other litigation.
  • Recent court decisions have expanded discrimination laws to apply to an employer’s decision to contest unemployment benefits.

As a result, your response requires careful consideration.

6. Should I offer severance pay? It may make sense from a risk management perspective to offer severance pay to obtain a written release and avoid future litigation. To be enforceable under state and federal law, a written release must contain certain information and technical requirements. You should only use a separation and release agreement that has been recently updated and approved by your employment counsel.

When considering a high-risk termination of an at-will employee, preventative counseling is a low-cost way to insure compliance with the law and avoid future litigation.

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