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Employee Terminations: The Do's and Don'ts

By: Debra Fowler


Every manager at some point in their career will have to make a termination decision. These types of decisions are rarely easy or straightforward and sometimes result in costly mistakes.

In Colorado, employees are considered “at-will” and neither the employer nor the employee are required to give a reason or advance notice for ending the employment relationship.

Yes, that means that employers in Colorado can terminate employees for any reason, as long as that reason is lawful. Employers are not allowed to make termination decisions related to protected class factors and should be aware that termination decisions that are not carefully considered and documented carry liability.


Illegal Reasons for Termination of Employees:

  • Retaliation for whistleblowing or reporting illegal or unethical behavior

  • Participation in union activities

  • Discrimination based on age, race, skin color, religion, marital status, gender, sexual orientation, transgender status, disability, medical condition, national origin, citizenship status, genetic information, etc.

  • Taking time off for maternity leave, FMLA purposes, or HFWA sick time.

  • Filing a worker’s compensation claim.

  • Lawful off-duty activity, unless the activity relates to the employee’s responsibilities, aka a “bona fide occupational requirement”

  • Complaint about sexual harassment or other workplace harassment

  • Complaints about unsafe work conditions

  • Participation in an investigation into harassment or unsafe working conditions

Common Termination Mistakes:

  • Making heat of the moment decisions

  • Failure to document performance issues as they occur, and then “blowing up”

  • Waiting too long to pay employees for wages after their final day of employment

  • Failing to pay out an employee’s accrued/earned vacation

  • Not consulting with Human Resources before terminating an employee

  • Making the termination decision for personal reasons

  • Creating an implied employment contract either verbally or in writing


Best Practices for Correctly Terminating an Employee:

  1. Determine why an employee’s misconduct, behavior, performance, etc. justifies termination.

  2. Think it through, give it a day to settle, and make sure that your reasons are valid. However, don’t wait too long and make it look like the termination decision is unrelated to the incident.

  3. Look at the termination decision from the other side – what would this decision look like to an attorney or Unemployment Hearing Officer?

  4. Gather supporting documentation of the reasons and/or incidents.

  5. Discuss with HR whether or not the termination is valid and mitigate risk.

  6. Document the entire process including any action taken prior to the decision to terminate, final warning(s) to the employee, any written notice provided to the employee about the termination, final pay including severance pay, and/or separation agreement if applicable.

  7. Pay your employee their final pay within 24 – 48 hours depending on whether your payroll department is on or off-site, and don’t forget to pay out accrued/earned Vacation leave.

  8. Be sure to revoke employee access to any company systems, gather any company-issued equipment, collect keys, etc.


When in doubt about a termination decision, we highly encourage you to contact Human Resources and discuss the issue, get advice, and get assistance with making lawful and well-documented termination decisions.

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