July 2026 Newsletter

Best Practices for Employee Terminations: Reducing Risk Through Preparation and Consistency

Few employment decisions carry more risk than terminating an employee. While Tennessee employers generally operate under the employment-at-will doctrine, that does not mean every termination is risk-free. Employees who believe they were treated unfairly may file discrimination, retaliation, wage and hour, or other employment-related claims, even when the employer believes the decision was justified.

The good news is that many termination-related disputes can be avoided through proper planning, consistent documentation, and a thoughtful termination process.

The Termination Process Starts Long Before Termination

One of the most common mistakes employers make is viewing termination as a single event. In reality, a successful termination process begins during hiring and continues throughout the employee’s tenure.

Employers should clearly communicate expectations regarding attendance, performance, workplace conduct, and professionalism from the outset. Job applications should require complete and accurate employment histories, and employee handbooks should outline workplace rules, disciplinary procedures, and the organization’s at-will employment policy.

New employees should acknowledge receipt of these policies in writing. For certain positions, employers may also consider confidentiality, non-solicitation, or other protective agreements where appropriate.

Documentation Matters

When a termination decision is challenged, documentation often becomes the employer’s strongest defense.

Performance expectations should be clearly defined and consistently communicated. Managers should document performance concerns, policy violations, coaching conversations, disciplinary actions, and improvement plans when issues arise.

Employers should also promptly investigate allegations of serious misconduct, such as harassment, workplace violence, theft, or policy violations, and maintain records of those investigations and any corrective actions taken.

A lack of documentation does not necessarily mean a termination is improper, but it often makes defending the decision significantly more difficult.

Review the Decision Before Taking Action

Before proceeding with a termination, employers should conduct a thorough review of the circumstances.

Whenever possible, a manager’s recommendation should be reviewed by HR, upper management, or legal counsel. This review should include the employee’s personnel file, performance history, disciplinary records, and the facts supporting the decision.

Employers should be particularly cautious when:

·       The employee has a long history of satisfactory performance.

·       The termination is based primarily on subjective concerns.

·       There is little or no written documentation supporting the decision.

·       The situation involves conflicting accounts of events without independent evidence.

·       The employee has recently engaged in protected activity, such as requesting leave, reporting concerns, or seeking an accommodation.

Taking time to review the decision before acting can help identify potential risks and ensure consistency across the organization.

Plan the Termination Meeting

When possible, termination meetings should be planned in advance rather than handled on the spot.

Typically, the employee’s supervisor and an HR representative should attend the meeting. Employers should determine ahead of time who will speak, what information will be communicated, and how questions will be addressed.

During the meeting, keep the conversation professional, direct, and respectful. Employees should be informed that the decision has been made, the effective date of separation, and any information regarding final pay, benefits, severance, or other next steps.

Employers should also have a plan for collecting company property, disabling system access, and addressing any security concerns when appropriate.

Handle Post-Termination Communications Carefully

The termination process does not end when the meeting concludes.

Employers should be prepared to address questions from remaining employees while respecting the former employee’s privacy. Internal communications should be brief, professional, and focused on operational needs rather than the details of the separation.

Reference requests should be handled consistently and in accordance with company policy. In addition, employers should retain personnel records as required by applicable law and securely dispose of records once retention requirements have been satisfied.

Final Thoughts

While no employer can completely eliminate the risk of a claim following a termination, organizations can significantly reduce their exposure by focusing on consistency, documentation, and preparation. A well-managed termination process protects the organization, supports workplace morale, and demonstrates professionalism and fairness, even during difficult employment decisions. By taking a proactive approach throughout the employment relationship, employers place themselves in the strongest position should a termination become necessary.