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By Bradley Hunt, Attorney at Law

North Carolina is an “at will” employment state. This means employers may terminate employees at any time without a reason…with some exceptions. There are numerous federal and state employment laws that do offer some protection to employees; these same laws may put employers who act without understanding these laws at risk of finding themselves defending a wrongful termination lawsuit.

Termination Pitfalls to Avoid

There are certain situations where terminating an employee is a clear-cut decision. If an employee has stolen from the employer or committed illegal activity while on the job, there is no question they are in the wrong. In cases where it not as clear, I usually recommend organizations have human resources policies in place that include such things as a verbal warning followed by a written warning, with all actions fully documented prior to the employee being terminated.  It is crucial to document any performance issues or violations of company policies.  This documentation will be essential if the employee challenges the termination and can help to demonstrate that the decision was based on legitimate business reasons. It is also important that employers avoid these pitfalls:

  1. Discrimination: If an employer terminates an employee because of their race, gender, age, religion, disability, or other protected characteristic, the employee may be able to sue for wrongful termination. There are several federal and state laws that protect against discrimination. These include Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act, and the Americans with Disabilities Act, among others.  In addition, they cannot terminate an employee for reporting workplace safety violations or participating in protected activities like union organizing.
  2. Retaliation: Employees have the legal right to file complaints about workplace safety, file a workers’ compensation claim, report discrimination or harassment, or even report illegal activity by the employer. If you terminate an employee because they exercised these legal rights, you may open your organization up to a wrongful termination lawsuit. The North Carolina Retaliatory Employment Discrimination Act (REDA) is one law that governs these actions.
  3. Breach of Contract: While most North Carolina employers do not enter into contractual agreements with employees, those who do must be sure to review the terms of employment before firing the employee. Terminating them without cause can lead to a breach of contract lawsuit.
  4. Final Paycheck and Benefits:  

In North Carolina, employers are required to pay a terminated employee all wages owed, including any accrued but unused vacation time unless the employer has a written forfeiture clause in its vacation, commission, or bonus policy or termination policy, on their last day of work. Employers may also be required to provide notice of any continuation of benefits, such as COBRA health insurance coverage, and any applicable deadlines for enrollment.

  • Family and Medical Leave Act (FMLA): This federal law allows eligible employees to take unpaid leave for certain family or medical reasons. Eligible employees may take up to 12 weeks of unpaid leave per year; employers may not terminate them for taking FMLA leave. Employers are required to either bring the employee back into their prior role or offer them an equivalent position. For an employee to be eligible for FMLA leave, they must work for a covered employer (private sector employers with 50 or more employees and all public sector employers, including state, local, and federal government agencies); have worked for the employer for at least 12 months; and met several other requirements.
  • Protecting Confidential Information:

Employers should take steps to protect their confidential information and trade secrets when terminating an employee. This can include disabling access to computer systems, collecting any company property, and reminding the departing employee of their obligations to maintain the confidentiality of company information.

Employment law can be complex. I always recommend you speak to an experienced North Carolina employment law attorney if you have any questions about the laws that may apply to your situation. Contact Brinkley Walser Stoner today to schedule an appointment.