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Keeping the “Wrongful” Out of Termination: 7 Costly Triggers for Litigation

Lucere Legal helps small business owners avoid employment litigation
Categories: Employees

Although the Affordable Care Act has put mechanisms in place to reduce costs in the long-term, some small business owners face higher expenses today. According to a recent survey published in the Wall Street Journal, almost a third of those surveyed have made cuts to staff in response to the new law.

Layoffs and dismissals often ride in the wake of unstable market conditions and economic pressures that push a business to cut costs where possible. The decision to let go of an employee is never an easy one, and care must be taken to keep any downsizing from creating any more waves that will batter your business. Employers must know what constitutes wrongful termination so they can avoid any unnecessary litigation.

Here are seven situations where a wrongful termination suit could be on the horizon:

Written contract.  While Minnesota recognizes “at-will” employment — meaning that employers can terminate employment without cause – it’s easy to place restrictions on it.  For example, a written contract can nullify the “at-will” status of the employee. It is important to have a carefully drafted employment contract if you want to preserve the “at-will” status of your employees.

Implied contract.  At-will status can also be nullified through actions or words, without a written contract, when an employer says or does something that might imply that a contract exists between the company and an employee. Remember that not all contracts have to be written to be enforceable.

Unfair Treatment.  If a court could find that an employer acted unfairly in their treatment of an employee, that employee could bring a claim for breach of good faith.

  1.  When an employee takes an action that an employer disagrees with, the company must be sure that the grounds for dismissal are legally permissible. If the termination could be taken as retaliation, even if that was not the intent, it can result in litigation that you likely will lose.
  2.  Any report from an employee about the company breaking the law in a way that could cause public harm may qualify for protection under federal and state law.

Defamation claim.  A suit can follow any actions or comments made by an employer that could damage an employee’s reputation.

Victim of fraud.  An employee who can prove that an employer has purposely acted in a deceptive manner can claim fraud.

Our firm focuses in crafting employment agreements and procedures to help business owners ensure full compliance with state and federal law. To learn more about our personal approach to business planning, call us today or fill out our contact form to schedule a small business consultation session.

Image courtesy of suphakit73/freedigitalphotos.net

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The plain-English guide for Minnesota small business owners

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