Terminating an employee can potentially cause conflict. Former employees sometimes allege that companies violated their rights by terminating them. They may file lawsuits against their prior employers. In some cases, they may also make unreasonable demands regarding severance pay.
Technically, Nevada state employment statutes do not mandate severance packages when companies and work arrangements with specific employees. However, employment contracts may include severance agreements.
Particularly when companies attempt to eliminate or reduce severance packages, workers may dispute that decision. They may even threaten litigation.
Documentation can justify employer decisions
Most employment agreements that include severance pay provisions have certain standards integrated into those agreements. For example, companies may be able to eliminate or reduce severance obligations if they terminate workers for cause.
Misconduct or poor job performance could justify the decision to deny a worker severance pay. However, workers who lose their jobs often have a difficult time accepting responsibility. They may feel anxious about their finances after a sudden loss of income.
Terminated employees pushing to maximize the severance that they receive might make inflammatory allegations against their employers or threaten litigation. The best way for businesses to minimize the fallout of such disputes is to have clear documentation supporting the company’s decisions.
Validating the terms of the contract and any severance clauses in the initial employment agreement can also help ensure that the company fulfills its contractual obligations or has a contractual justification for choosing not to do so. In some situations, making minor concessions about severance could help resolve termination-related disputes quickly.
Preparing in advance for the likelihood of workers becoming frustrated after summary termination can reduce the likelihood of costly business litigation that negatively affects a company’s reputation as an employer.