Letting Someone Go the Right Way

“How do I fire a guy without it coming back on me?” A firing rarely comes back on an owner because he let someone go. It comes back because of why it looks like he did it, when he did it, or what he cannot show afterward. Here is the rule you start from, the exceptions that cause the trouble, and a way of doing it that holds up.

The starting point: at-will employment

Most owners have heard the phrase “at will.” California’s Labor Code puts it in one sentence: an employment “having no specified term, may be terminated at the will of either party on notice to the other” (§2922). Under a rule like that you do not need a reason. But you must not have an illegal one, and if you give a reason it should be the true one.

The illegal reasons are the ones the discrimination laws name. Title VII makes it unlawful to discharge someone because of race, color, religion, sex or national origin (42 U.S.C. §2000e-2(a)); the Americans with Disabilities Act covers disability (42 U.S.C. §12112(a)); the Age Discrimination in Employment Act protects workers 40 and older (29 U.S.C. §631(a)). The federal acts reach employers with 15 or more employees, or 20 for age (42 U.S.C. §2000e(b), §12111(5); 29 U.S.C. §630(b)), but state laws often reach smaller shops: California’s fair employment law covers any employer “regularly employing five or more persons” (Government Code §12926(d)). These are the same traits that make some interview questions risky.

Retaliation: the claim that catches small employers

Retaliation is firing or punishing someone because they asserted a legal right. It is the basis alleged most often in charges filed with the EEOC: in fiscal year 2025, retaliation was alleged in 54,350 of the 88,201 charges, or 61.6%, more than any other basis. The EEOC lists examples of protected activity, including filing or being a witness in a discrimination charge, complaining to a supervisor about discrimination or harassment, and asking about pay to uncover discriminatory wages.

Two federal laws protect complaints that have nothing to do with discrimination, and neither has a 15-employee threshold. The Fair Labor Standards Act makes it unlawful to discharge an employee because he “has filed any complaint” under that act, the overtime and minimum wage law (29 U.S.C. §215(a)(3)). The OSH Act forbids discharging an employee for filing a safety complaint or exercising his rights under the act, and gives him 30 days to file a complaint with the Department of Labor (29 U.S.C. §660(c)).

None of that means a worker who complained can never be let go. The EEOC says so directly: engaging in EEO activity “does not shield an employee from all discipline or discharge,” and employers “are free to discipline or terminate workers if motivated by non-retaliatory and non-discriminatory reasons that would otherwise result in such consequences.” What protects you is being able to show the real reason, and that it came first.

Montana is different

In Montana, at-will mostly ends after a probation period. Under its Wrongful Discharge from Employment Act, a discharge is wrongful if it was not for good cause and the employee had finished the probationary period; if it was retaliation for refusing to violate public policy or for reporting a violation; if the employer materially broke its own written personnel policy; or if it was solely for legal free speech (Mont. Code Ann. §39-2-904(1)). Some details an owner there needs:

• Probation. If you set none, it is 12 months from the first day; you may extend it before it ends, to no more than 18 months in all (§39-2-910). During probation either side may end the job for any reason or none (§39-2-904(2)).
• Good cause means reasonable job-related grounds such as failing to do the job satisfactorily, disrupting the operation, material or repeated violation of your written policies, or other legitimate business reasons (§39-2-903(5)).
• The exposure. Lost wages and fringe benefits for up to four years from the discharge, less what the person earns elsewhere; punitive damages only for actual fraud or malice in a public-policy case (§39-2-905).
• Your appeal procedure. A suit must be filed within one year. If you keep a written internal appeal procedure, you must tell the discharged employee about it in writing or electronically within 14 days (§39-2-911).

The written-policy point applies in spirit everywhere: if your handbook promises a warning before termination, give the warning.

Before the conversation: the paper

• Write problems down when they happen. The date, what happened, what you said and what you expect next time. A text or email to the worker after a talk is a record with a date on it.
• Treat the same problem the same way. If one man is fired for three late mornings and another kept after six, the difference will need explaining.
• Check the timing. Has he recently complained about pay, safety or harassment, filed a claim, asked for leave or an accommodation, or been a witness for someone who did? If so, slow down and make sure your record of the problem predates it.
• Read your own handbook. Follow whatever steps it promises.

The conversation itself

Keep it short, private and in person, with a second person from the business in the room. Say the decision first and the reason in a sentence or two, and do not debate it; the time for coaching was the warnings. Have ready the final paycheck if your state wants it that day, and a list of what comes back: keys, fuel cards, the company phone, tools and the truck. Tell him what happens next with his pay, any benefits and his things at the shop. Afterward, write a short note of what was said and who was there.

Say the same reason to him, on any paperwork and to anyone who asks later. Shifting reasons are what make an ordinary firing look like a cover story.

The last check, benefits and a release

The final paycheck. The Department of Labor says employers “are not required by federal law to give former employees their final paycheck immediately,” but some states require it. Final Paychecks lists the state deadlines and what happens when one is missed.

Health coverage. If you sponsor a group health plan and had 20 or more employees in the prior year, federal COBRA lets a worker who loses his job keep the coverage for a time; the Department of Labor lists job loss, voluntary or not, among the events that trigger it.

Severance and a release. Nothing requires severance. If you offer money in exchange for a release of claims, and the worker is 40 or older and you have 20 or more employees, the age discrimination law sets the terms for the release to be valid: it must be written so he can understand it, refer to his age discrimination rights, advise him in writing to consult a lawyer, give him at least 21 days to consider it (45 when the offer is part of a program for a group of employees) and 7 days after signing to revoke it, and pay him something beyond what he was already owed (29 U.S.C. §626(f)(1)). That is a document for a lawyer to draft.

A checklist for the day

1. The reason is written down, with dates, and it is the same reason you will give.
2. No recent complaint, claim or leave request that the timing could be tied to, or a record that clearly predates it.
3. Your handbook’s steps were followed, and in Montana, probation and good cause are checked.
4. The final check is ready by your state’s deadline.
5. A second person is present, the return list is ready, and a note is written afterward.

General information, not legal or tax advice. Rules change and vary by state; check with the agency named above or a professional for your situation.