At-will employment is a term used for employment relationships in which an employee can be dismissed by an employer for any reason, and without warning, as long as the reason is not illegal.

Employers may find themselves in trouble by disregarding the last piece of at-will employment.  Let’s look at it again. The last 8 words are the important ones.  “As long as the reason is not illegal.” While it is certainly true that an employee can be terminated for any reason and it is also true that an employee has the right to resign without notice, employers still need to be careful to avoid potentially discriminatory situations.

Because of this doctrine, many employers think they don’t have to document disciplinary actions, since they are allowed to fire people for any reason.  The opposite is true.

Having performance documentation is good in a couple of ways.  First, it gives the employer an opportunity to point out the shortcomings in their employees.  This, in turn, gives the employee a chance to fix the issue and become a better employee. If it doesn’t work out, nobody is surprised, and a claim is unlikely to occur when it is obvious (and proven) that the employee simply couldn’t do the job.

Second, documentation is helpful in avoiding costly unemployment insurance rates. Sometimes, the employee just doesn’t work out, in which case the employee is usually entitled to receive unemployment benefits. However, if misconduct is established, the unemployment claim may be denied, which helps keep those unemployment insurance rates low. Employers will need documentation to prove misconduct.

It may appear safe to fire your perpetually tardy employee – until he files a claim alleging that you failed to accommodate his doctor appointments (which is why he was late) due to his ADA-related disability. Not knowing the reasons for the tardiness makes it worse.  Remember: ignorance is no excuse in the eyes of the law.

The key to at-will employment being successful comes down to communication. Often, when the tables are turned and an employee quits without notice, the employer is surprised and often upset. Take the time to conduct reviews. Your employees should know where they stand. It can be as simple as MBWO (manage by walking around), which gives you an opportunity to see how everyone is doing.

And, pay attention to your workforce and have the interactive discussions.  Why has your employee been late 7 times in the last 3 weeks? Is there something going on (that may be a protected situation)? Take the time to find out. A short conversation can go a long way toward mitigating your risk in letting someone go for no reason just because the law says you can.