Avoiding Legal Exposure When Terminating Employees for Performance
In the May 2025 issue of MSADA Auto Dealer Magazine, a publication of the Massachusetts State Automobile Dealers Association, Pullman & Comley attorneys Megan Carannante and James F. Martin author the article “Avoiding Legal Exposure When Terminating Employees for Performance,” which provides dealerships with practical guidance on managing employee performance while minimizing legal risk.
The authors, both members of Pullman's Automotive Dealership practice, emphasize the critical importance of timely and consistent documentation of performance issues. Without formal processes and thorough records, dealerships risk accusations of discrimination or unfair treatment. Megan and Jim explain, “When these processes are not in place, dealers risk being accused of discrimination, unfair treatment and/or will be challenged defending against such claims.” Clear communication of expectations and careful documentation—including written records of verbal warnings—are essential to establishing a fair and objective basis for employment decisions.
When termination becomes necessary, the authors stress the need for careful preparation and professionalism. They recommend providing employees with detailed termination letters that clearly outline the reasons for dismissal and efforts made to support improvement. Termination meetings should be conducted privately, with an appropriate witness present and avoid involving any antagonistic parties. In more sensitive cases, such as those involving long-term employees, protected class status or recent complaints, consultation with legal counsel is strongly advised. They note, “The dealership may also want to consult with legal counsel before termination especially if dealing with a long-time employee, a member of a protected class, or if the employee has recently lodged a complaint.” Additionally, Megan and Jim caution employers to use clear and focused language throughout the process, emphasizing that “Be thoughtful and direct with your word choice. Personal commentary or irrelevant information raised in performance meetings or documents can create unintended issues down the road.” By following these best practices, dealerships can enhance compliance with employment laws, reduce exposure to claims and ensure a fair and consistent approach to employee management.
To read the full article, please visit the Massachusetts State Automobile Dealers Association website.