Firing without fear. Heading off litigation in employee terminations

Under most state laws, employee handbooks carry the status of employment contracts, or such contracts are implied through various employment conversations. Unlike in the past, when a management decision to discharge an employee could be challenged only for statutory or public policy reasons, today's employer may have to prove that he or she did not violate an employee's contractual right to employment. Employers can reduce the risk of employment liability through practical steps such as careful monitoring and documenting of the hiring, performance appraisal, and disciplinary processes, and a credible grievance procedure. Many employers have found, however, that taking these steps does not always prevent litigation. Certain legal precautions, such as written disclaimers and other handbook revisions, can result in the dismissal of such actions before trial and will deter many plaintiffs' attorneys from taking the case. The strongest legal protection in termination situations is a release of all claims executed by the employee and supported by severance pay or other valuable consideration to which the employee would not be otherwise entitled.