When Can You Legally Fire Employees?

When you can legally fire employees isn’t an easy question to answer. Laws and cases have become increasingly protective of employees. Although the “at will” doctrine is still prevalent in many states (meaning that you can freely fire an employee at any time), there are many exceptions. Plus, employees are increasingly suing managers and companies for “wrongful termination,” harassment, discrimination, and other reasons.

Employment lawsuits can be nasty and expensive, and they can generate negative publicity for your company. Juries tend to be particularly partial to terminated employees.

So when can you legally fire an employee? Here is a list of some reasons that should generally stand up:

  1. Consistent incompetence. If an employee just isn’t able to do a competent job, and you have given the employee a reasonable opportunity to succeed, then termination will often be seen as appropriate.
  2. Violation of company policy. If you have established clear, legal, and consistent policies, and the employee obviously has violated them in a meaningful way, then termination is appropriate. Violation of antiharassment, discrimination, or confidentiality policies are particularly actionable.
  3. Repeated unexcused absenteeism or tardiness. Your company depends on its employees to show up for work and perform their jobs. Continual absence or tardiness jeopardizes the ability of an employee to complete important tasks. If absenteeism or tardiness is continual and unexcused, then termination may be justified. Be careful to investigate the reason for the absences. If they’re the result of a medical condition, you may need to accommodate that condition, or at least attempt to do so.
  4. Physical violence. If an employee commits or threatens physical violence, you will want to fire him or her immediately. All employees are entitled to a safe work environment, and employers have a duty to take reasonable steps to provide for that. 
  5. Drugs and alcohol. Depending on the circumstances, being under the influence at the office may be grounds for immediate suspension or termination. Some companies now offer treatment and rehabilitation counseling as an alternative to immediate firing. Conditions caused by the use of prescribed drugs may also require a more tempered response.
  6. Illegal acts. If you find the employee committing illegal acts, such as theft or embezzlement, immediate termination is justified. Before you fire the accused employee, however, make sure you know all the facts and have heard the employee’s side of the story.
  7. Falsified information. Sometimes employees lie on their employment applications or resumes (they list fake degrees or jobs they’ve never held). When you discover this, and the falsification appears deliberate and material, termination of the employee is usually warranted.

There are other instances when you can legally fire an employee. For example, if the employee has had shortcomings and has been given fair warning of these problems with a reasonable opportunity to respond, then a firing can often be legally defensible.

Note: If you do fire an employee and a lawsuit is brought against your company, you should have adequate backup documentation and proof as to the rationale and reasonableness of your actions. Numerous employee appraisals that show consistent poor performance can be part of the documentation (see the sample employee appraisal form listed on this page).

Ultimately, the safest approach to firing an employee is to make sure you have a reasonable and legitimate business reason — one that you have carefully thought out and adequately documented.