Even when employed at will, employees cannot be terminated for illegal reasons. A wrongful termination claim cannot be brought without a termination or constructive discharge. Alternatives to termination—including retraining, transferring, demoting, or suspending—should be considered. To the extent that these are adverse employment actions, they still present legal concerns, but they are less apt to be challenged than terminations.

Last chance agreements are sometimes a viable alternative to termination and are generally taken seriously by both arbitrators and courts in the event of subsequent transgressions by the employee. The option of written voluntary resignation agreements can be pursued when there are growing concerns about the performance or conduct of an employee but a termination is not yet imminent. Termination decisions should receive careful higher-level review. Terminations tainted by discriminatory or retaliatory motives are particularly likely to be identified by this type of dispassionate internal review.

Termination decisions should not be made on the spot by single individuals. Employees should be placed on administrative leave if circumstances warrant their removal prior to completion of an investigation. Employers do not have to be correct about their reasons for terminating at-will employees. But an employer without good documentation of the reasons for a termination will be at a disadvantage in defending against wrongful discharge claims.

The reasons for termination decisions and the process followed should be solidly documented. Materials should be in writing, produced prior to the termination decision, and support the decision to terminate. Provide employees with clear and succinct statements of the reason(s) for their termination. Employers should generally avoid making public statements about terminated employees and the reasons for their terminations.

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