In Michigan, employment is usually considered to be “at-will”. This means that either an employer or employee may decide to terminate employment at any time, with no reason needed. There are, however, a few exceptions to the rule. If an employee claims that there was an unlawful reason for his or her termination, he or she might sue for reinstatement, damages, or both. So how can employers avoid a wrongful termination lawsuit? The first step is understanding how employment works in Michigan.
Exceptions to Michigan’s “at-will” employment rule include:
Breach of Contract
An employer and employee may agree in writing or verbally to modify the “at-will” nature of the employment relationship. An employer may avoid claims of a verbal contract, which might be difficult to disprove, by having a clear written policy that such contracts may only be in writing, signed by a key employee such as the president.
You may face a wrongful termination lawsuit in Michigan if an employee claims he or she was terminated because of color, race, sex, national origin, religious affiliation, marital status, age, height, disability, weight, or marital status.
Employers in Michigan may not terminate employment if the termination was caused by an employee’s unwillingness to commit an illegal action, or if the termination was caused by the employee reporting illegal acts or health and safety violations of the employer.
As an employer, you do not technically need to have a reason for terminating an “at-will” employee. That said, if an employee claims that he or she was fired for one of the above reasons, you should be able to counter the claim and avoid or successfully defend a wrongful termination lawsuit with a legitimate reason for terminating the employment.
Now that you have an idea of what at-will employment entails, here are three considerations to avoid or handle litigation for wrongful termination in Michigan.
Considerations for how to avoid wrongful termination lawsuits:
Job Expectations and Criteria
As a preemptive way to avoid wrongful termination lawsuits, maintain a clear and thorough employee handbook which communicates expectations of employees. If you choose to terminate an employee’s employment based on attendance, an employee handbook will be a reliable way to that show your terms of employment included a clear standard of acceptable attendance. Documentation of attendance or performance problems will also help, especially if it is signed by the employee.
Softening the Rejection
It is important to keep the termination meeting brief and professional, and include another person such as an HR professional in the room if for no other reason than to provide a witness. Termination meetings may also go more smoothly if the firing does not come as a complete surprise. If the employee is already aware that he or she is on thin ice, it should come as less of a shock.
If you are able to provide a severance package, that might ease any financial hardship that might lead an employee to pursue a wrongful termination lawsuit. If you provide severance in the expectation of avoiding litigation, it should be conditioned on the employee signing a thorough waiver and release of claims against the employer. It might be a good practice to assist the employee in finding his or her next job, whether that is in the form of providing placement or career coaching. This option might be cheaper than litigation.
Making Sure That Your Books Are in Order
Although the goal is to avoid litigation, you should be prepared for a claim. You should have all documentation ready, including written guidelines claim that describe your general criteria for downsizing or restructuring.
It is also especially helpful to have legal counsel review your policies and guidelines.
As with most legal matters, the strongest tool when it comes to avoiding wrongful termination lawsuits is prevention. Review your employee handbook and your employment practices with an attorney and make sure that you are following all labor and employment laws.
Questions? Contact us to learn more.
We assist in the navigation of federal, state, and local employment laws, as well as representation in litigation and arbitration and before governmental agencies on all aspects of employment law. Click here to learn more about our Labor, Employment & Civil Rights practice. To speak with an attorney, contact us online or at 517.482.5800.
Fraser Trebilcock Shareholder Dave Houston has over 40 years of experience representing employers in planning, counseling, and litigating virtually all employment claims and disputes including labor relations (NLRB and MERC), wage and overtime, and employment discrimination, and negotiation of union contracts. He has authored numerous publications regarding employment issues. You can reach him at 517.377.0855 or firstname.lastname@example.org.