How to Protect Your Business When Letting Employees Go

Article by: Siphokazi Lali You worked hard building your business. You put together the business plan, took the financial risk, made the sacrifices, and carefully vetted a team you thought would help make the dream a reality.

Unfortunately, things don't always work out the way you planned.

The employee who seemed fantastic on paper isn't quite as fantastic after signing the offer letter. The person who was supposed to make your life easier is somehow creating three new problems before lunch. Performance is slipping, personalities are clashing, and you are starting to wonder whether “team player” was perhaps interpreted a little too creatively during the interview.

Eventually, you may find yourself facing the conversation every business owner hopes to avoid: “This isn't working.”

If that happens, how do you end the employment relationship without creating a bigger problem for your business?

At-Will Employment Does Not Mean Anything Goes

Ohio is an at-will employment state, which generally means that an employer or employee may end an employment relationship at any time, with or without notice, and with or without cause, unless an exception applies.

For employers, that provides considerable flexibility. You generally do not have to prove that an employee committed some spectacular offense before you can terminate them. Sometimes an employee simply is not doing the job.

But there is a significant difference between “I don't have to establish cause” and “I can fire someone for any reason I want.”

At-will employment does not permit an employer to terminate an employee for an unlawful reason, including certain forms of discrimination or retaliation. Contractual obligations and other federal, state, and local protections may also affect the employment relationship.

The takeaway for business owners is simple: at-will employment gives you flexibility, but it does not eliminate legal risk.

Your Best Protection Starts Before There Is a Problem

The strongest defense to an employment dispute is often created long before anyone is talking about termination.

Clear, written expectations are one of the best tools a business owner has.

That means having job descriptions that accurately describe the position, employment agreements that appropriately address the employment relationship, and written policies, guidelines, and standard operating procedures that tell employees what is expected and how the business operates.

These documents are more than administrative paperwork. They establish the rules before there is a dispute about the rules.

If an employee is eventually terminated for failing to meet expectations, the business should be able to demonstrate what those expectations were, that they were communicated, and how the employee failed to meet them.

Consider the difference between telling a former employee, “You weren't doing your job,” and being able to point to the employee's job description, the applicable policy or procedure, the training they received, and the documented instances in which they failed to meet those expectations.

The second is evidence.

Policies and procedures can be some of the best insurance a business has when defending an employment decision or responding to employment litigation—but only if the business actually follows them. If a policy says one thing while management routinely does another, the policy may not provide the protection the business expected.

Your documentation should reflect your actual workplace, not an idealized version of it.

When Performance Becomes a Problem

Once an employee begins falling short, address the problem rather than allowing it to become a six-month accumulation of frustration.

Documentation should be factual, specific, and created when the events occur. “Jane has a bad attitude” tells you very little. “Jane interrupted a client three times during the meeting after being instructed to allow the client to finish explaining the issue” gives you something concrete.

The objective is not to build a case against an employee. It is to create an accurate record of the employment relationship.

And what about a Performance Improvement Plan?

A PIP can be an effective management tool when an employee is genuinely being given an opportunity to improve. It should identify the problem, establish clear expectations, explain how improvement will be measured, and provide an appropriate timeframe for reassessment.

It is not, however, a magic legal shield.

If the decision to terminate has already been made and the PIP is simply being created to make the file look better, that is a very different situation from genuinely attempting to improve an employee's performance.

When You Decide to Let Someone Go

If termination ultimately becomes necessary, preparation matters.

Before the termination meeting, the employer should understand the reason for the decision, review the relevant documentation and policies, consider whether there are any circumstances that could create additional legal concerns, and make sure the termination is being handled consistently with the company's practices and obligations.

The termination conversation itself should be professional and focused. This is not the time to finally tell an employee everything you have thought about them for the last 14 months.

You do not need to win the argument. You need to end the employment relationship appropriately.

And don't forget the practical details: company property, system access, final compensation, benefits, and any continuing contractual obligations should all be addressed.

What About Unemployment?

Being fired does not automatically mean an employee is disqualified from unemployment benefits.

Ohio law considers the circumstances surrounding the separation, including whether the employee was discharged for just cause in connection with the individual's work, along with other eligibility requirements.

That means the reason for the termination and the facts supporting it matter. An employer saying “I fired them for misconduct” does not automatically settle the unemployment question, just as being fired does not automatically make an employee eligible.

It is also important to understand that unemployment eligibility and wrongful termination are separate issues. An employee may qualify for unemployment without having a wrongful-termination claim.

And If You're the Employee?

If you are the employee who just lost your job, being fired can be stressful and upsetting. It can also make you wonder whether your former employer did something illegal.

Sometimes the answer is yes. Sometimes the answer is simply that your employer decided the relationship was no longer working.

Being treated unfairly is not necessarily the same thing as being treated unlawfully, and being fired from an at-will position does not automatically create a legal claim.

You also may not need to hire a lawyer.

If your only question is whether you can apply for unemployment, or whether your employer was allowed to terminate an at-will relationship for a lawful reason, you may not need an attorney.

There are circumstances where legal advice is important, particularly if you believe the termination involved discrimination or retaliation, you have a significant wage or compensation dispute, you are being asked to sign a severance agreement, or there is a dispute involving a contract or restrictive covenant.

Sometimes the most useful legal advice is simply, “You don't need me.”

Protect Your Business Before You Need Protection

No business owner wants to spend their time defending an employment decision. The best time to think about that risk is before there is a problem.

Clear job descriptions. Written expectations. Thoughtful policies and procedures. Appropriate employment agreements. Consistent management. Accurate documentation.

None of those things will make your business lawsuit-proof. Nothing will.

They can, however, give you something invaluable when an employment relationship goes bad: a clear record of what you expected, what you communicated, and why you made the decision you made.

And if you are an employee on the other side of that decision, understanding your rights can help you determine whether you have an actual legal issue—or simply a really lousy Tuesday.

This article provides general information about Ohio employment law and is not legal advice for any specific situation. Employment matters are highly fact-specific, and federal, state, local, contractual, and workplace-specific laws may affect a particular situation.