Small businesses are faced with lawsuits from employees that have been terminated just like corporations with more than 50 employees. In 1991, the Americans with Disabilities Act effectively revoked a business owner's long preserved prerogative to dismiss employees whenever he or she felt like it.

The ADA and other laws unfortunately provide leverage for plaintiffs who may not have genuine causes of action. The ADA was intended to protect a class of people that needs to be protected. But unfortunately, lawful termination cases have sometimes been initiated by streetwise former employees.

The pragmatics are that it is often less expensive to come to a settlement with a former employee than pay the expensive legal fees and face the possibility of a judge issuing an adverse opinion to the company.

Some suggested steps are:

1. Spell out the job's duties and expectations of the employee;
2. Create a file documenting events in writing. Encourage other superiors to contribute to the file. Keep your notes clear, factual and formal. Document the rules that are being violated by the employee and have the employee acknowledge receiving the memo.
3. Maintain a personnel file for each employee. Make sure that evaluations are fair and objective and honestly reflect the employee's behavior and contributions to the organization.
4. Make references as positive and accurate as possible. Be honest to avoid having an employee present an ambiguous evaluation and alleged termination.

The annals are replete with stories about employers who attempted to take every possible step to avoid a wrongful termination suit. Even if the company wins and gets a judgment for court costs, its chances of collecting are slim because the employee could ultimately declare bankruptcy. In addition, not only is it a question of dollars but it is a question of employee morale and large legal fees.

As a suggestion, here are some steps that you can take to reduce the chances of a wrongful termination action or an adverse result:

Have a witness with whom the employee doesn't have a working relationship present to listen;

• Give the employee a written termination notice reviewing the disciplinary history and events leading to the termination;
• If you're firing for a cause, have the relevant facts at your fingertips and explain how they violate company policy.
• Be direct with the statement that the employee is being terminated. Avoid any kind of euphemism such as "layoff" which could imply that the employee might be welcome back.
• Prepare an accurate written account of the interview and give a copy to the employee and have him sign it.
• Terminate an employee during a work day rather than at the end of a work day. Avoid giving notice before a holiday or after an employee has returned from a business trip.
• If you're firing for cause, make sure that this termination matches past practices for similar conduct.
• Avoid any confrontational dialogue. Say only what has to be said and make it as brief as possible.
• Have the termination interview at a neutral location rather than in a supervisor's office or an executive's suite.

In summary, be direct, courteous, non-confrontational and calm. Have a file that contains accurate and objective information, including signed notices of past omissions.