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Call Lipp Law: (703) 896-7704
Sometimes an employee needs to be terminated.
Maybe performance has been declining for months. Maybe there has been a serious policy violation. Perhaps the employee is not a good fit for the role, or the business needs to eliminate the position altogether.
For a small business owner, the decision may feel straightforward: we are an at-will employer. Can’t we just terminate the employee?
Not necessarily.
Virginia generally follows the employment-at-will doctrine, but “at will” does not mean an employer can terminate an employee for an unlawful reason. Depending on the circumstances, a termination decision can implicate federal or Virginia discrimination and retaliation laws, leave and accommodation rights, wage and hour laws, employment contracts, company policies, and other legal obligations.
One of the most common mistakes we see small businesses make is waiting until after an employee has been terminated to consult an employment attorney.
By that point, the former employee may have hired an attorney, sent a demand letter, filed an administrative charge, initiated arbitration, or filed a lawsuit, and decisions that could have been evaluated beforehand have already been made.
The best time to identify a potential employment-law problem is often before the termination, while the employer still has options.
Before scheduling the termination meeting, here are 10 questions Virginia employers should consider.
Start with what sounds like the simplest question: Why are we firing this employee?
The answer should be clear.
Legal liability can increase when different decision-makers give different explanations. If a manager says the termination is based on poor performance, but another manager says the position is being eliminated, that inconsistency could become important if the employee later challenges the decision.
Before proceeding, make sure the people involved in the termination decision understand and can accurately explain the real reason for it.
Next, look at the employee’s personnel file and other relevant records. If the reason for termination is poor performance, what does the documentation show?
A lack of documentation does not automatically mean an employer cannot terminate an employee. But a substantial disconnect between what the employer says happened and what its records show deserves attention.
For example, suppose an employee received a positive performance review two months ago, and management now wants to terminate the employee for “long-standing poor performance.” There may be a legitimate explanation. But it is better to identify and understand that inconsistency before the termination than after receiving a demand letter.
Employers also should not attempt to solve a documentation problem by creating misleading records after the decision has already been made. Accurate, contemporaneous documentation is far more valuable than a paper trail manufactured immediately before a termination.
Consistency matters.
Ask how your business has handled comparable performance problems or misconduct involving other employees. If one employee was given three warnings for the same conduct that resulted in another employee’s immediate termination, is there a legitimate explanation for the difference?
There may be. The employees may have different disciplinary histories, different responsibilities, or materially different circumstances. The goal is not to make every employment decision identical. It is to make sure the business can explain why employees were treated differently when circumstances were different.
This is particularly important if the employee being terminated is a member of a legally protected class or has recently engaged in legally protected activity.
Before making a final termination decision, determine whether the employee has recently complained about:
The existence of a complaint does not mean the employer cannot discipline or terminate the employee. Employees who have made legally protected complaints can still be held accountable for legitimate performance or conduct problems. But an employer cannot terminate an employee because the employee engaged in legally protected activity.
Virginia also has specific anti-retaliation protections, including the Virginia Whistleblower Protection Law and protections under the Virginia Human Rights Act and other employment statutes, depending on the circumstances.
Timing deserves particular attention. If an employee makes a potentially protected complaint on Monday and management decides to terminate the employee on Friday, that does not automatically make the termination unlawful. But it should cause the employer to carefully review the reason, timing, documentation, and decision-making process before acting.
This is one of the biggest areas where we recommend employers slow down and look carefully at the facts.
If an employee has a medical condition, has requested medical leave, has asked for an accommodation, or has recently returned from leave, determine whether federal or state disability, accommodation, or leave protections may apply before making the termination decision.
Likewise, if the employee is pregnant, recently gave birth, or has requested a pregnancy-related accommodation or leave, additional legal protections may be implicated.
Depending on the employer and circumstances, potentially applicable laws may include the Americans with Disabilities Act (ADA), Family and Medical Leave Act (FMLA), Pregnant Workers Fairness Act (PWFA), the Virginia Human Rights Act, and other state-law protections.
These circumstances do not necessarily prevent an employer from making a legitimate termination decision. But they may change the legal analysis. Medical situations, pregnancy, and recent employee complaints are among the circumstances where consulting employment counsel before terminating an employee can be particularly valuable.
Before terminating the employee, review the documents governing the employment relationship.
An employer may have legal flexibility but create unnecessary problems by failing to follow its own written procedures or contractual commitments.
For example, if your handbook describes a progressive discipline process, determine what the policy actually requires and whether it preserves management discretion. If the employee has an employment contract, review any provisions governing termination, notice, cause, severance, compensation, or dispute resolution before acting.
Before the termination meeting, determine what compensation and benefits need to be addressed.
Under Virginia law, wages due for work performed before termination generally must be paid on or before the date the employee would ordinarily have been paid had employment continued. Other compensation issues may depend on the applicable agreement, policy, compensation plan, and circumstances.
Resolve these questions before the meeting whenever possible so the employee receives accurate information rather than conflicting answers from management, HR, and payroll.
Virginia employers are not required to offer severance in every termination. But there are circumstances in which an employer may want to consider it.
A severance agreement can provide financial transition assistance to the employee while also giving the employer greater certainty regarding the end of the employment relationship.
Whether severance makes sense and how an agreement should be structured depends on the circumstances. Employers should also be aware that federal law imposes specific requirements on certain waivers of age-discrimination claims involving employees age 40 or older. An employer must have 20 or more employees to be subject to the federal law protecting older workers, the Age Discrimination in Employment Act.
A legally sound decision can still be handled poorly. Plan the logistics before the meeting.
The termination meeting is not the place to debate every performance problem that occurred during the employee’s tenure. Communicate the decision clearly and professionally.
An employee may be angry, upset, embarrassed, or surprised. Employers can remain firm about a business decision while still treating the departing employee with dignity and respect. How an employee is treated on the way out can affect what happens next.
One of the most common mistakes we see small businesses make is waiting until after an employee has been terminated to consult an employment attorney.
We get calls after terminations all the time—sometimes after the former employee has hired an attorney, sent a demand letter, filed a complaint, or initiated a legal proceeding. At that point, we can help the employer respond to the dispute. But the employer may have had more options if counsel had been involved before the termination.
A pre-termination legal review does not necessarily mean delaying a legitimate business decision or turning a personnel matter into a legal project. It means taking a closer look at the circumstances before making a decision that can be difficult—or impossible—to undo.
Employers should be especially cautious when:
Employment counsel may identify an accommodation process that needs to be completed, documentation that should be reviewed, an investigation that needs to occur, compensation issues that should be resolved, or a severance strategy worth considering.
Sometimes the conclusion will still be: yes, proceed with the termination.
But the employer can make that decision knowing the potential legal issues have been considered and with a plan for handling the termination professionally.
That is the goal of proactive employment counsel: not preventing businesses from making difficult decisions, but helping them make those decisions with greater confidence, clarity, and preparation.
Virginia generally recognizes the at-will employment doctrine. In its simplest form, that means an employment relationship without an agreement providing otherwise can generally be ended by either the employer or employee.
But the rule has important limits. An employer cannot rely on “at will” to terminate someone for a reason prohibited by applicable law.
Depending on the circumstances, legal protections may arise from federal or Virginia laws involving discrimination, retaliation, protected leave, disability or pregnancy accommodations, wage rights, whistleblowing, workplace safety, and other protected activities. Contractual obligations, policies, or past practices may also alter the analysis.
So the better question is not simply: “Can we fire this employee?” It is: “Do we have a legitimate reason for this decision, is that reason supported by the facts, and is there anything about this employee’s circumstances that we need to address before we act?”
That is a much more useful question for a business owner.
Even a carefully considered termination can result in a dispute. An employee or their attorney may send a demand letter, file an administrative charge, initiate arbitration, or file a lawsuit.
If that happens, avoid an emotional response. Preserve potentially relevant documents and communications, notify appropriate decision-makers and insurers when applicable, and consider involving employment counsel promptly.
Virginia Employers: Demand Letter Response Guide: Dos and Don’ts
The employer’s response immediately after a dispute arises can affect what happens next.
Potentially. Virginia generally follows the employment-at-will doctrine, and there is not a universal requirement that every employee receive a particular number of warnings before termination. However, the analysis can change based on employment contracts, employer policies, the reason for termination, and applicable federal or state law.
The more important legal issue is whether the employer’s actual reason is lawful. Employers should internally understand and document the legitimate reason for the decision and should be thoughtful and consistent about how the termination is communicated.
“Wrongful termination” is not simply a termination that feels unfair. Depending on the circumstances, a termination may create legal exposure when it violates an applicable statute, an enforceable contractual obligation, or a recognized exception to Virginia’s employment-at-will doctrine. The analysis is highly fact-specific.
Generally, accurate documentation of legitimate performance, conduct, and business issues can be valuable. Documentation should reflect what actually happened. Employers should not create inaccurate records after the fact simply to justify a decision that has already been made.
Ideally, before the termination when there are warning signs that the decision could present legal risk. Medical issues, pregnancy, leave or accommodation requests, recent employee complaints, inconsistent documentation, significant compensation, employment contracts, and anticipated legal disputes are all reasons to consider getting advice before acting. The employer may ultimately make exactly the same termination decision. The difference is that it can do so after identifying potential legal issues and planning how to handle them.
Terminating an employee is sometimes necessary to run a business effectively.
The goal is not to make termination impossible or to turn every personnel decision into a legal project. It is to make sure the business understands the decision it is making, has considered the important risks, and handles the process professionally.
Taking time to ask the right questions before a termination can help prevent a manageable personnel issue from becoming an avoidable employment dispute.
Lipp Law advises Virginia businesses on employment-law compliance, difficult personnel decisions, terminations, workplace disputes, and employment litigation and arbitration.
If your business is considering terminating an employee and you have concerns about legal risk, consider talking with Lipp Law before the termination meeting. We can help you evaluate the circumstances, identify potential legal issues, and develop a plan for moving forward with greater confidence and clarity.
This article provides general educational information and does not constitute legal advice. Employment laws and individual circumstances vary.
Katie dedicates her practice to employment separation guidance.
Based on her successful employment litigation practice...Read More
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