I’m Cited in The National Law Review Article “When It’s Time to Part Ways: Managing the Risks of Employee Termination”

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Most U.S. employment relationships are “at will.” Either side can generally end the relationship at any time, without a fixed term or a showing of cause. That does not mean anything goes. The employer’s reason still must be lawful, and contracts, union agreements, and state or local laws can impose additional limits.

Poor performance, misconduct, insubordination, policy violations, and a genuine reduction in force can support termination. Discrimination, retaliation, and certain violations of public policy can make the discharge unlawful. A protected characteristic is a personal trait covered by discrimination laws. The traits protected and the employers subject to those laws vary by jurisdiction.

A request for a disability accommodation calls for particular care. The Americans with Disabilities Act may require an interactive process in which the employer and employee discuss adjustments that would enable a qualified employee to perform the job. Firing someone for making the request can create a separate retaliation problem. The practical obligations depend on the employer, the employee, and the governing law.

For more on those obligations, read Managing Medical Leave and Employee Health Issues: A Strategic Overview.

Why the Timing of Termination Matters

A manager can have legitimate performance concerns and still miss something important. Did the employee recently complain about unpaid wages, report harassment, request an accommodation, or take protected leave under the Family and Medical Leave Act? When did the performance concerns begin, and when were they documented?

Katie Rinkus, a partner at The Prinz Law Firm, P.C., explains her starting point: “I want to know the timeline of the employee’s employment- start date, meetings regarding performance concerns, any complaints made by the employee, whether the employee had requested protected leave or a reasonable accommodation.” That timeline helps counsel assess whether the company’s explanation fits the events.

Protected activity does not erase a performance problem. It does require management to verify that the proposed termination rests on an independent, supportable reason. If a complaint remains unresolved, a careful workplace investigation may be necessary before anyone decides what happens next.

To learn more about handling a workplace complaint, read When the Workplace Becomes the Investigation. You can also watch a related topic, I Know What You Did Last Summer: Workplace Investigations.

What the Personnel File Should Show

Start with what the employee knew. Was the rule communicated? Were expectations reasonable? Did coaching identify what needed to change and what would happen if it did not? Progressive discipline is exactly what it sounds like: increasingly serious corrective steps, such as coaching and warnings. Do not assume every workplace uses the same sequence; follow any applicable commitments.

Record concrete conduct, its effect on the business, and relevant witness accounts. “Bad attitude” says almost nothing. Refusing an assignment, interrupting customers, or repeatedly responding to feedback with insults gives management something it can actually evaluate.

“I want to see complete files, I want to see consistency,” Max Barack, an employment attorney with Garfinkel Group, LLC, says. A write-up that suddenly appears just before medical leave can invite questions about whether the stated reason is a pretext, a cover for an unlawful motive.

Compare similar cases, too. Consistency is not glamorous, but it matters. If another employee received a warning for comparable conduct, explain any material difference that supports termination here. Keep a dated account as issues arise and preserve the feedback given to the employee. Notes assembled only after management has settled on dismissal may leave their timing and purpose open to challenge.

When Severance Makes Business Sense

Severance is money or other benefits provided at separation. It can ease the employee’s transition and give the company a chance to obtain a lawful release of existing claims. Packages may include health insurance assistance, outplacement services, or permission to retain specified equipment.

Federal wage law generally does not require severance. An employment agreement, a benefit plan, or applicable state law may. An executive’s contract may distinguish termination “for cause” from termination “without cause,” which can affect notice and compensation. Read the actual definition of “cause” in the contract, and check whether the executive has an opportunity to cure the alleged breach before it is invoked.

For a discretionary offer, weigh the likely claim, defense costs, available cash, and past practice. Employment practices liability insurance, or EPLI, covers certain employment claims subject to policy terms. Check coverage and notice requirements before assuming the insurer will fund a dispute.

Employers should apply severance policies consistently. Some severance arrangements must comply with the Employee Retirement Income Security Act (ERISA), depending on their structure and administration. Even outside such a plan, unexplained differences in how comparable employees are treated can raise discrimination concerns.

The Legal Limits of a Release

A release is a bargain: the employee gives up specified claims in exchange for something of value. That value should go beyond what the employee is already entitled to receive.

Helen Bloch, principal and founder of Law Offices of Helen Bloch, P.C., cautions against assuming a signed agreement ends every potential dispute: “There are some claims that can’t be waived by law.” Earned compensation, workers’ compensation, unemployment rights, and vested benefits require separate analysis. Their treatment depends on the governing law.

The rules become more exacting when a covered employee age 40 or older waives a federal age-discrimination claim. The Age Discrimination in Employment Act (ADEA) and the Older Workers Benefit Protection Act (OWBPA) impose specific safeguards. For a typical individual separation agreement, the employee must be given at least 21 days to review the terms, followed by a seven-day period after signing during which they may revoke their acceptance. Group programs, such as a reduction-in-force affecting multiple employees, require 45 days and additional disclosures about the program. The agreement must also recommend that the employee seek legal advice and meet the remaining applicable requirements. The rules for age discrimination releases deserve review before the offer goes out.

Do not draft away the employee’s right to file an EEOC charge or participate in agency proceedings. Confidentiality, nondisparagement, and other restrictions also need review under current federal and state law. An old form may contain promises the company cannot lawfully demand.

Delivering the News Without Escalating the Conflict

• Decide in advance who will speak and who will take notes.
• Have two company representatives present, choose a private setting, and prepare for practical questions.
• Favor an in-person meeting when feasible, especially after a long employment relationship, but weigh safety and remote work options.
• State the decision promptly, with a concise, truthful explanation consistent with the record.
• Avoid mischaracterizing the reason for termination. Calling a performance termination “position elimination” when the job remains can damage credibility and raise questions about a release obtained on that representation.
• Allow a response and answer reasonable questions without turning the meeting into a debate.
• Avoid jokes, personal attacks, and unnecessary discussion of coworkers.
• Where another sensible time is available, consider avoiding a late Friday dismissal; that is a practical preference, not a legal requirement.

Managing the Handoff and Final Paperwork

• Prepare final pay, benefits information, device return, and return of company information.
• Coordinate with IT so system access is removed and account changes occur at the appropriate time.
• Preserve needed records and help the employee collect personal belongings discreetly.
• For a separation involving a handoff of property or information, consider incremental severance payments rather than a single lump sum, as suggested by Charles Krugel, owner of Charles A. Krugel, Labor & Employment Law on Behalf of Businesses. Also, remember: payment of earned wages remains a separate obligation regardless of the severance structure.
• Send a short follow-up letter confirming the separation date, benefits process, and any severance offer.
• Keep the supporting detail in the personnel file. Comply with state law on records requests; Illinois, for example, provides access rights under its Personnel Record Review Act.

The Risk That Remains After Separation

An unemployment claim calls for a business judgment, not a reflex. Consider the evidence, applicable eligibility rules, administrative effort, and potential effect on unemployment insurance costs. A lawful termination does not automatically make the employee ineligible. Rinkus notes that even one claim can materially affect a small employer’s costs, while Barack cautions that fighting a marginal claim can deepen the conflict.

Do not dismiss later complaints, either. The National Labor Relations Act applies to most private-sector employers, not only unionized workplaces. Under that Act, covered employees are protected for concerted activity regarding working conditions, including some group complaints voiced by one employee. An angry letter requires review of its substance before management responds.

A broader financial contraction brings another set of obligations. If the termination is part of one, assess any potentially applicable layoff notice rules. For more on the issues that arise when an employer is in financial distress, read What Happens to Employees When a Company Files for Bankruptcy?

Tell remaining employees only what they need to know. Use a consistent reference practice. Secure the records. The company should be able to explain the decision long after the meeting ends.

To learn more about this topic, view “It’s So Hard To Say Goodbye: Minimizing Risk When Terminating Employees”. The quoted remarks referenced in this article were made either during this webinar or shortly thereafter during post-webinar interviews with Financial Poise Faculty. Read more about protecting your employee assets on Financial Poise.

This article was originally published on October 28, 2026.