Business Law

Do You Know What Right You Have to Fire an Employee as a Small Business Owner?

According to the laws of all U.S. states except Montana, if no employment contract exists between employers and workers, workers are considered to be employed on an “at-will” basis. This means that an employer has the right to fire an employee at any time for any reason, or for no reason at all without giving warning, without having to establish just cause, and without suffering any penalties. Similarly, employees have the right to quit an organization at any time, for any or no reason without incurring legal consequences.

Limitations to the Right to Terminate At Will

Over time, however, employers’ right to fire at will has been gradually diminished in the US, as the courts have come to acknowledge the following major exceptions to the at-will principle.

1. Discrimination Based on Age, Race, Gender, or Other Factors

Under federal law, it’s illegal to terminate workers because of their age, race, religious affiliation, gender, nationality, or a disability that has no effect on their capacity to function at work. Some states append further limitations; for instance, in many states firing a person based on their sexual preference is illegal.

2. A Violation of Public Policy

Employers are not permitted to fire workers on grounds that go against public policy. For example, a company can’t terminate one of its managers for telling the EPA that the company has been disposing of hazardous waste in the local landfill.

3. A “Just Cause” Promise

If employees are informed they will be terminated only for cause or if they otherwise receive rules establishing how and when firings will be conducted, such information may be the equivalent of an indirect employment contract. In such cases, if employers fail to strictly follow their disciplinary rules, they could find themselves on the losing side of a court case with the employee.

To sum up, at-will employment still exists, but it has become so thoroughly riddled with exceptions that it’s best to follow this guideline: Avoid firing an employee without a solid rationale that you can express unambiguously and support persuasively.

If you feel that your right to fire an employee has been breached and you would like to take action on the matter, contact the Ghandi Selim Law Firm today to arrange a free consultation about your case.

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Gandhi Selim

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