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How to Avoid a Hiring or Termination Lawsuit

Posted by Erin Borgerson on March 4, 2015

shutterstock_189871757How to Avoid a Hiring or Termination Lawsuit

The hiring process can be tough on aspiring employees, but they aren’t the only ones feeling the burden. Franchisees can also find themselves straining under the pressure to hire the right candidate. The amount of time it takes to sift through applications, sit down for interviews and notify the candidate if they’ve been hired (or not) can add up quickly. Sometimes, potential job candidates who were turned down may look for a way to sue the franchise for discrimination in hiring, which can cost a franchisee even more time. And we all know: Time equals money.

The converse is true: The firing process can be time and money intensive for employers too. From all of the time it takes sit down with employees to explain the situation, go through necessary paperwork and severance packages, no company wants this process to be extended by a drawn out lawsuit.

Unfortunately, mistakes are made in the hiring and firing processes that easily could have been avoided by franchisees or managers in charge of hiring and firing. To help your franchisees avoid expensive litigation, today we review best practices to remember during the potential hiring or firing of an employee to ensure that your franchise is protected through the process.

How to Avoid a Hiring Lawsuit

The most common lawsuit that comes up when looking at a franchise’s hiring practices is discrimination lawsuits, which most commonly arise during the interview process. Many people know that according to The U.S. Equal Employment Opportunity Commission (EEOC), it’s illegal to discriminate against hiring an individual because of their race, color, religion, sex, age, national origin or disability. Accordingly, direct questions asked in an interview regarding any of these topics, such as “What is your religion?” are illegal to ask and can lead to lawsuit.

Oftentimes, individuals in charge of hiring for a franchise – in an effort to get to know the candidate – may ask questions that unintentionally allude to these topics in an indirect way. For example, “Do you have children?” may be a well-intended question toward a candidate to try and make them feel comfortable, but this question should be avoided at all costs. According to the EEOC, is unlawful for a franchise or any employer to reject a job candidate if they have children or are preparing to create a family in the future. In any other situation asking this type of question may be viewed as an ice-breaker, but when interviewing an employee to work in your franchise, it has the potential to lead to an unnecessary lawsuit if they are not chosen for the position.

As you can see, one of the easiest ways to avoid an unnecessary lawsuit in the hiring process is to carefully examine the EEOC document to know what topics are on and off limits. It may be wise to create a strict interview process for candidates with outlined and pre-approved questions for franchisees or those in charge of hiring to utilize during interviews to avoid these situations. 

How to Avoid a Termination Lawsuit

The most common termination lawsuits include those under the category of wrongful termination and retaliation. The most effective way to avoid a wrongful termination lawsuit is to develop clear firing procedures for your franchise. These termination procedures should include standardized documentation forms, planned terminations with witnesses, exit interviews with the terminated employee, severance package education etc. Once these standardized systems are in place, you will be better equipped to terminate an employee with a reduced risk of litigation. 

As we discussed the EEOC above, it can also be used in a wrongful termination and retaliation. These are lawsuits from an ex-employee claiming they were fired due their race, color, religion, sex, age, national origin, disability or as some sort of revenge by a higher up. To avoid this type of litigation – or any termination litigation at that – it’s necessary for a business to keep a paper trail of all employees, such as a folder for each employee. These files should be created once an employee is hired, and should contain all of his or her paperwork, employee evaluations, any warnings they may have received, a work schedule with their timecard, etc. It’s crucial to stay up-to-date with this information, especially if you’re planning on laying off employees in the near future.

When these cases are taken to court, paper documentations are oftentimes a franchise’s only evidence of the situation that is admissible in court. Having the ability to prove that there was a recurring problem with an employee with written documentation is hard to negate in court, making a franchisee’s odds of winning litigation better. Without a paper trail, lawsuits oftentimes turn into a heresy trial, forcing the jury to decide based on credibility and which candidate they liked best.

No matter if you’re looking to hire in the near future or not, franchisees and their employees in charge of hiring should re-familiarize themselves with hiring and firing laws. Having the knowledge and right systems in place can help save your franchise from undergoing a costly lawsuit.

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Franchise Hiring Tips, Franchise Operations & HR, Franchise Hiring and the Law


Erin Borgerson

About the Author

Erin is the Director of Marketing, Crisis Controller and Culture Ambassador (the last two titles she gave to herself) who joined the Hireology team in April of 2012. As a certified Inbound Marketer, Erin manages Hireology's marketing department, the Hireology Blog, and media relations. She is also a co-leader of the Chicago Hubspot User Group which brings together Hubspot users from around the Chicagoland area. Erin set off to Chicago after graduating from Western Michigan University. In her spare time she can be found shaking it in a Zumba class, reading a bestseller, or drinking a craft beer on her Wrigleyville porch.