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iQuestions Faculty, Ron Price 
 
 
Question: 
 
How do I properly fire an employee without risking a lawsuit of an 
angry ordeal? 
 
Answer: 
 
There are two things that most employers hate to do. The first is 
hiring, because it’s so hard to know whether or not this is going to be 
a great person. The second thing—and they really hate this even 
more—is firing. 
 
We hate to have to tell somebody that they haven’t performed well 
and it’s time to let them go.  
 
There are two basic approaches that you can take to this when you 
know you have to do it. 
 
The first is what’s called an “at-will” firing. Many states allow you to 
hire and fire people at will, which means you don’t need to have a 
reason for letting somebody go. This is the one that has the least 
amount of legal exposure. Check your state to find out what the rules 
or laws are for your state.  
 
An at-will firing means that you say to them, “I’ve decided it isn’t 
working, I’m just going to let you go,” and you say nothing else. You 
don’t go any further in describing why, no matter how many times 
they ask you. That minimizes your legal risk. 
 
The other way is what’s called an “at-cause” termination of 
employment. That’s when they’ve done something and you’ve tried to 
 
 
fix it, but it’s not working. You tell them, “Because you don’t perform 
at the right level, I’m letting you go.”  
 
In that case, you probably have an employee handbook or written 
policies about how to deal with discipline and termination. You’d better 
follow those according to the letter of those policies and document all 
of it, because that’s your defense if this gets disputed in court. 
 
If you don’t have any policies at all, then now you’re leaving it up to 
the judge to make a decision about whether or not you’re being fair, or 
whether the employee has been misjudged. You’re really putting too 
much power into their hands.  
 
In either case—whether you have a policy written or not—if it’s going 
to be an at-cause firing, be very cautious. Make sure that you’ve 
documented everything and that the employee knows that you’ve 
documented everything.  
 
Hopefully all of that will help the employee to be encouraged to go 
look for a greater opportunity and not feel the need to throw you into 
court and create a lot of unnecessary expense.  
Price -2- 
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