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December 29, 2023 | BusinessEmployment

“You’re Fired!”: How to Legally Terminate an Employee in Tennessee

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Terminating an employee is a difficult decision that must be approached with care.  In Tennessee, understanding the necessary steps and legal considerations is crucial to ensuring a lawful and fair termination process.  In cases where employers do not take the proper steps to legally terminate an employee, the employer may be opening themselves up to a lawsuit.

Required Steps to Terminate an Employee in Tennessee

When terminating an employee, it is imperative that employers take steps to avoid liability.  First and foremost, employers should establish clear employment policies and consistently communicate these policies to employees.  Employers can accomplish this by having an employee handbook and requiring employees to periodically review and acknowledge company policies.  If appropriate, employers should document performance issues and policy violations by employees.  Additionally, employers should conduct fair and unbiased investigations into any alleged misconduct or performance problems, affording the employee an opportunity to respond.  Open communication and transparency throughout the process can help mitigate potential legal issues.

Is Tennessee an At-will State?

Like most U.S. states operate under the “at-will” employment doctrine, which means that employers have the right to terminate employees for any lawful reason or no reason at all, and employees have the right to resign from their positions without providing a reason.  In at-will employment states, there is an assumption that employment is voluntary and indefinite, meaning that there is no implied contract for continued employment.

While at-will employment is the default in many states, there are exceptions. Employment contracts, collective bargaining agreements, or specific company policies may modify the at-will relationship, providing additional job security or outlining specific termination procedures. Additionally, at-will employment does not allow termination for reasons that violate federal or state anti-discrimination laws, as employers are still bound by legal protections against wrongful termination based on factors such as race, gender, religion, disability, or other protected characteristics.

Exceptions to At-will Terminations

While Tennessee operates as an at-will employment state – providing employers and employees with the flexibility to terminate the employment relationship without cause – it is essential to recognize the exceptions to this doctrine. These exceptions are designed to protect employees from unfair and discriminatory practices, ensuring that terminations adhere to the principles of law and fairness.

  1. Anti-discrimination Laws:

One crucial exception to at-will employment in Tennessee involves protection against termination based on discriminatory factors. Employers cannot dismiss employees on grounds of race, gender, religion, disability, age, or other protected characteristics. Federal laws like the Civil Rights Act of 1964, the Americans with Disabilities Act (ADA), and the Age Discrimination in Employment Act (ADEA), as well as Tennessee state anti-discrimination laws, safeguard employees from discriminatory terminations.

  1. Retaliation Protections:

Employees in Tennessee are shielded from retaliation for engaging in certain protected activities. “Protected activities” include reporting illegal activities within the company or exercising rights under various labor laws. If an employee reports instances of workplace misconduct, unsafe conditions, or other violations, the law prohibits employers from retaliating against them by terminating their employment or taking other adverse actions against them. This protection encourages employees to come forward with legitimate concerns without fear of reprisal.

  1. Contractual Agreements:

Employment contracts, whether written or implied, may establish specific terms and conditions for termination. If a contract outlines a definite period or “term” of employment or specifies limited reasons for termination, it supersedes the at-will presumption, and the parties are bound by the terms of the contract.

  1. Public Policy Exceptions:

Tennessee recognizes public policy exceptions to at-will employment, prohibiting terminations that would violate established public policies.  For example, if an employee is terminated for refusing to engage in illegal activities or for exercising a legal right (such as filing a workers’ compensation claim), the termination may be deemed wrongful under public policy exceptions.

Understanding these exceptions is crucial for both employers and employees operating within the at-will framework. Employers must navigate terminations with a keen awareness of anti-discrimination laws, retaliation protections, contractual obligations, and adherence to public policy. On the other hand, employees should be aware of their rights and protections, seeking legal recourse if they believe their termination falls outside the bounds of the recognized exceptions to at-will employment.

Are Employers Required to Pay Severance?

In Tennessee, there is generally no legal requirement for employers to provide severance pay.  Whether or not to offer severance is at the discretion of the employer or may be determined by employment contracts or company policies.  However, if an employer chooses to offer severance, it should do so in an even-handed and non-discriminatory manner.

Contact an Experienced Employment Attorney Today:

Navigating the legal complexities of employee termination in Tennessee requires a thorough understanding of state and federal employment laws.  If you have a question , seek guidance from an experienced attorney to help navigate you through the legal process and protect your rights.  Whether you are an employer seeking guidance on proper termination procedures or an employee facing an unjust termination, our experienced attorneys are ready to provide the assistance you need.



Photo by Brandon Jean on Unsplash
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