Grounds for Firing an Employee

Understanding the legal grounds for firing an employee may help a company avoid being sued. If an employee feels like they were wrongfully terminated, they can file a claim with the EEOC. Even if your reason for firing an employee was justified, an employee could claim they were terminated as an act of discrimination.

Before firing an employee, consult with an attorney to ensure you do not put your company at risk for legal action. Every situation for firing an employee is unique. This article is for general information. We invite you to read our Disclaimer page.

Legal Reasons to Fire an Employee

When facing an EEOC claim, the employer must prove that the employee was fired for a specific reason, not because they belong to a protected class. In legal terms, this is “firing for cause.”

Here are 20 acceptable reasons for firing an employee in California:

1.    Unethical Conduct

This is a vague term which covers multiple behaviors such as theft, fraud, slander, and dishonesty. An employee with a bad attitude can seriously damage your business, and it is necessary to get rid of them. Especially if you run a small business, your internal culture and client relationships can be damaged.

2.    Damaging Company Property

If your employee damages company property when angry or frustrated, this is grounds for dismissal. Whether their actions are intentional or not, they are displaying violence, intimidating clients and coworkers, and damaging company property. Sometimes, their actions may inadvertently hurt coworkers. This is grounds for immediate dismissal. It is wise to escort them off company grounds.

3.    Possession of Drugs or Alcohol at Work

An employee under the influence of drugs or alcohol will not perform well and could damage your company’s reputation. This is an obvious reason for firing an employee.

4.    Falsifying Company Records

Deception is illegal, but this is an example of fraud and illegal. Your employee may face prison time. In order to protect your business, you need to contact your business lawyer and notify the authorities immediately.

5.    Disobedience

A disobedient employee will disrupt your workplace and internal culture. It will affect your business because tasks will not be completed correctly, and the employee’s coworkers will get impatient. Follow a discipline and warning structure before firing the employee, but continued disobedience is grounds for termination.

6.    Misconduct

Misconduct can cover a range of behaviors, but most commonly, it covers discrimination and sexual harassment. These should not be taken lightly and any complaints of these behaviors should be investigated immediately. If you witness these behaviors, you should discipline or dismiss the employee immediately depending on the severity. Gross misconduct that threatens the safety of your employees is grounds for immediate dismissal. Get witness testimony and document the incident to cover your back.

7.    Poor Performance

If an employee continually fails to meet their reasonable targets, then they may be fired. Show that you have given warnings and provided training and support to help them to improve. If the poor performance continues despite your repeated efforts, then you may dismiss them. Ensure you have documentation of your efforts and performance reviews.

8.    Theft

Theft is illegal and a grounds for dismissal. Petty theft includes stealing boxes of stationery, while larger theft may include stealing equipment or money from the company. It’s difficult to catch employee theft, so have systems and checks in place to ensure any theft is caught quickly. Daily reconciling statements or regular audits can be helpful. Assigning multiple employees to at-risk tasks can also be a good tactic.

9.    Using Company Property For Personal Business

Most employers do not mind the occasional personal email or occasional use of the company printer. However, if the employee is spending a lot of work time on personal matters, then this is grounds for termination.

10.  Too Many Absences

If the employee takes frequent sick days or unpaid leave even though they have run out of their allowance, they are not valuable employees. You will need to notify HR of the issues and approach the issue cautiously. If the absences are due to a legitimate health concern, you may be on the line for a lawsuit.

11.  Violating Company Policy

Your company policies are there to keep the workplace a safe and productive space. Your company policies will outline consequences for violating policies, so the employee will have acted wilfully. Adhere to the consequences for the policy violation, whether that is discipline or termination. Repeated violations of the company policy are grounds for dismissal.

12.  Does Not Fit the Company Culture

An employee might have the right skills for the job but doesn’t fit in with the company culture. They will not fit in with your team and may struggle to work towards your company objectives. This is why a probation period exists, so you can see if the employee fits with your company culture or not.

13.  Fails to Commit

As an employer, you want a loyal employee who is good to their word. If they persistently cannot commit to deadlines or compulsory training or conferences, then this is a great reason for dismissal.

14.  Lack of Enthusiasm and Drive

Most employees are motivated and excited during the first few months of their employment. However, some will lack the energy and drive after a while. This is a valid reason for dismissal, but it is difficult to prove. If the employee has passed their probation period, it is best to look for related reasons like poor performance to terminate them.

15.  Dishonesty

If an employee regularly lies about their credentials or their work, then this is a betrayal of trust for you and your employees. Dishonesty can include behaviors like gossip and manipulation too. If you cannot trust your employee, you must let them go.

16.  Constant Negativity

If an employee constantly makes negative comments, they can undermine your work and disrupt important meetings. In the moment, diffuse the situation and then call the employee for a private meeting to discuss their behavior later. Do not attack the employee’s personality; instead, address the effect of the negative comments. Ensure the behavior violates company policy before firing the employee.

17.  Inconsistency

If an employee’s behavior and productivity are not consistent, it can affect your business’s goals and results. Employees will have the occasional up and down, but their behavior should be overall consistent. If an employee is often inconsistent, you may have to fire them.

18.  Falling Behind

If an employee regularly fails to complete tasks and relies on coworkers to pick up the slack, it can affect your workplace morale. The employee’s coworkers will become fed up of always covering from the employee and may even resign. You may be able to correct the situation with guidance and training, and you should always try. However, if the employee consistently falls behind, even after guidance, you need to terminate them.

19.  Lying on a CV

If an employee lies on their CV and cannot complete the tasks required in the job description, you have grounds to fire them immediately. After all, their experience and skills are the reason you hired them.

20.  Chatterbox

While you cannot fire employees for being too chatty or positive, if the employee is disruptive, then it is grounds for discipline. If an employee is spending more time gossiping than working and pulling other employees into their drama, then give them a warning. If the behavior continues, then you may fire them.

Employment Laws For Termination

Before terminating an employee, you need to know federal and state laws which regulate termination. Either research the laws before you fire the employee, or hire an employment lawyer to review your firing decisions and create termination policies.

Your termination decisions and procedures must comply with federal and state laws which regulate firing. The HR department or your business attorney will have a policy and procedure in place and can advise. If you do not have an HR department, you can seek advice from an HR consultant or an attorney.

Warning the Employee

If the employee’s behavior is not grounds for immediate dismissal, you must issue them with a warning. They must understand that continuing this behavior will cause termination.

It is also wise to have a comprehensive employee handbook which details conduct and the consequences of misconduct. Ask employees to sign a document stating that they understand the expectations and discipline structure.

Poor Performance

Employees should know in advance if their work is not up to standard. This can be done in the form of performance reviews, feedback, and guidance. Be clear with the employee exactly where they are lacking, and that continued poor performance will mean termination. Have a paper trail which documents the poor performance, the warnings, and any performance reviews. This could be emails inviting them to a meeting and written summaries of performance reviews and warnings.

Productivity Issues

If you are firing someone for productivity issues you may need to issue a warning or two first. For example, if your employee wastes time on the internet, takes personal calls, or wastes time sending unnecessary emails this can be noted on performance reviews. The employee should be asked to reduce the amount of unproductive time and focus on their duties.

Inform the employee that you will monitor their use of the phone and computer to see if they improve. All new hires should be notified in writing that their use of phones and computers is monitored. This allows you to legally use this information to monitor their performance. Warn the employee again during their performance reviews so you can legally use this information to terminate them if necessary.

Gross Misconduct

Gross misconduct is behavior serious enough to result in immediate dismissal. This can include:

  • Violating no dating policies
  • Verbal abuse
  • Hate speech
  • Sexual harassment
  • Physical harm
  • Stealing

This behavior should be covered in employee handbooks and it should be clear that the consequence is immediate dismissal. Most employers will also mention these behaviors and the consequences in employee orientation.


If the company needs to layoff workers or cut certain job roles, employees should be warned in advance. Most companies will announce layoffs two to six weeks in advance to give employees time to update their resumes or take early retirement. This will show you treat your employees with respect and protect your company’s reputation. Some employers also pay for employees’ job search website membership or professional resume services. This creates goodwill amongst the laid off employees and your remaining staff. It also reduces the chance of a potential lawsuit.

How to Fire an Employee

When firing an employee, what you say and how you say it is important. You must remain professional at all times and show compassion. It is important not to let your emotions get the better of you.

Here are some tips to ensure you protect your company:

  • Get to the point – Tell the employee right away that they have been terminated and give the reason. Stick to the main reason they are being fired, do not dilute your message with a list of grievances.
  • Do it in private – Not only is it humane to fire an employee in private, but it will protect your business. Pick a meeting room or wait until the other employees have left for the day.
  • Have a witness – A member of HR, the legal department or a supervisor should attend the termination meeting as a witness. They can take notes and ensure the situation doesn’t get out of hand. They may also help explain the severance package.
  • Be brief but clear – Briefly explain the reason they are being terminated and that the matter is final. Do not talk about any other issues, stick to the essentials. Anything else you say could be used as ammo in a lawsuit.
  • Have evidence – Ensure there is evidence of the employee’s misconduct or poor performance. Have written evidence of warnings and witness statements to misconduct. These will help termination proceedings if the employee is argumentative.
  • Let the employees know about next steps and options – Ensure your employee knows what happens next and their rights to services. If your company provides career counselling or health care, give them information on how to claim those benefits. If you are offering a severance package, detail what it includes and what the employee needs to do in exchange.
  • Discuss how they will collect their things – If the employee is calm, you may escort them to collect their things and leave. However, if there is a possibility the employee may make a scene, it may be worth scheduling another time for them to collect their things. If an employee becomes physical or threatening, then you should have security escort them out of the building immediately.

Do not speak ill of a former employee. Even if they were horrible, stay professional to protect your company. Anything you say about the employee after they have been fired may be used in a wrongful termination lawsuit. Only inform employees who need to know about the termination and managers who need to know about the reasons behind the termination. Avoid creating rumors and divulging unnecessary information. Some of your employees may be friends with the terminated employee.

In Summary

No matter the reason for termination, firing someone is always difficult. However, ensuring you have a termination procedure which complies with federal and state laws will help the process go smoothly. Following protocol will protect you and your company.