What should small businesses know about wrongful termination?

On Behalf of Griswold LaSalle Cobb Dowd & Gin LLP

While small business owners may not have the same financial reach or resources as larger companies, they remain susceptible to the same legal woes as larger companies, such as wrongful termination lawsuits. Small business employers and employees need to know the basics of wrongful termination suits, mainly because such suits are common for small businesses. 

Entrepreneur offers insights on the intersection between small businesses and wrongful termination. Understand the laws, claims and actions surrounding illegal firings. 

Wrongful termination laws 

Laws regarding wrongful termination apply at federal and state levels. Besides the Equal Employment Opportunity Act, employees may use additional laws when filing a termination suit: 

  • Family and Medical Leave Act 
  • Fair Labor Standards Act 
  • Americans With Disabilities Act  
  • Occupational Health and Safety Act  

Employers and employees should stay current on the most recent regulations, laws and compliance requirements. 

Wrongful termination claims 

Because discrimination comes in various forms, the same applies to wrongful termination claims. Lawsuits can claim retaliation, breach of contract, disparate treatment or a hostile work environment. Most claims relate to forms of retaliation, so employers must tread carefully when deciding whether terminating an employee could come across as an act of revenge. 

Wrongful termination actions 

Companies can take steps to prevent wrongful termination suits. Creating a termination checklist that adheres to the latest laws and regulations is a good first step. Having an HR professional review the reason for termination could help sidestep wrongful termination. Avoiding specifics when terminating employees and leaving the reasoning to “for cause” may also help avoid a suit. 

Small business workers and owners must take steps to avoid running afoul of employment law. Legally terminating employees requires proper knowledge and foresight. 

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