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How to Terminate an Employee's Contract

By Jason Beahm | Last updated on

When an employee does not have an employment contract, you can generally terminate them for any legal reason. That doesn't mean that there aren't a lot of legal land mines in the way. If you trip up in the process of terminating an employee, you could be looking at a major lawsuit. Understandably employers have a lot of questions about termination.

We recently looked at the case of an employee at the University of Alabama that played the songs "Take the Money and Run" and "Son of a Preacher Man" as a dig at Auburn quarterback Cam Newton. Cam Newton has been the subject of a pay-for-play scandal involving his father, but continues to play as the NCAA investigates the matter. Alabama terminated the employee after the game. According to the University of Alabama, the game music has to be carefully scripted and approved in advance by a senior administrator.

"The former staff member deviated from the script that had been approved for the game with Auburn, and the University took steps to immediately terminate his contract," Univ. of Alabama Public Relations Director Debbie Lane told the Tuscaloosa News.

In other words, the failure to obtain approval for the songs is grounds for termination. Interestingly, there is a precedent for this kind of situation. In April 2002, Chuck Finley was pitching against the Chicago White Sox and the music director played songs mocking Finley's divorce, specifically "Here I Go Again" by Whitesnake, which Finley's ex-wife was featured in. The White Sox terminated the music director for the same reason as The University of Alabama.

The situation would be drastically different if either of these firings was done for an illegal reason. If you fire someone for a reason that is illegal, you can face major liability even without an employment contract. Here are some illegal reasons to fire someone:

  • Discrimination - it is illegal to fire an employee because of race, gender, national origin, disability, religion, or age, as well as because someone is pregnant. Some states have broader protection including sexual orientation or marital status.
  • Retaliation - it is illegal to fire an employee for asserting their rights under state and federal anti-discrimination laws.
  • Alien Status - most employers are prohibited from firing an employee due to their alien status as long as that employee is legally eligible to work in the United States.
  • Violations of Public Policy - most states prohibit firing a person for reasons that most would find morally or ethically wrong. For example, terminating an employee for refusing to commit an illegal act.

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