Every incident. Every warning. Every conversation.

The employee you're about to fire will have their attorney call yours. That attorney will ask for documentation. If you've got a paper trail showing repeated problems and multiple warnings, the lawsuit dies before it starts. If you don't, you're paying a settlement.

Documentation is your insurance policy against wrongful termination claims. A thorough written record proves you didn't act on a whim or personal grudge. It shows a pattern of behavior, your attempts to fix it, and why firing was the only option left.

Most business owners document too little, too late. By the time they're ready to fire someone, there's nothing in the file except a few vague notes. That's how you lose in court.

What Exactly Counts As Documentation?

Written records of what happened, when it happened, and what you did about it.

Documentation creates a timeline from the first problem to the final termination. Here's what belongs in an employee's file:

• Verbal warnings (in writing). Even informal coaching conversations need a paper trail. If you told someone they're making too many mistakes, write down exactly what you said, date it, and file it. You don't need their signature for informal warnings.

• Written warnings. These are formal documents the employee signs. They outline the specific problem, the consequences if it continues, and a timeline for improvement. Date, signature, file.

• Performance reviews. If someone's consistently scoring below expectations, those reviews become evidence. They show the problem existed before you decided to fire them.

• Policy violations. Video footage, timecards, manager notes, customer complaints. Anything showing the employee broke company rules. The more proof, the better.

• Performance improvement plans (PIPs). These documents set clear expectations, provide support, and give the employee a chance to fix things. If they fail the PIP, that's documented proof they couldn't meet basic requirements.

• Attendance records. Chronic tardiness or absences build a case over time. One late arrival means nothing. Ten late arrivals with warnings means something.

• Any written correspondence. Emails, messages, formal letters. If it references performance or behavior issues, it goes in the file.

Every company should have a Standard Operating Procedure for collecting these documents before termination.

How Specific Do My Notes Need To Be?

Facts only. No opinions, no emotion.

Bad documentation: "Bob is lazy and doesn't care about quality."

Good documentation: "Bob failed to install the required washer in the assembly process. This mistake required stopping the production line, disassembling 14 units, and reassembling them with the correct parts. Total production delay: two hours."

The difference is measurable impact. One is your opinion. The other is what actually happened and what it cost you.

When you write up an incident, answer three questions:

• What specifically did the employee do (or not do)?

• What was the impact on the business?

• What did you tell them about it?

Skip the personality judgments. "Irresponsible," "careless," "bad attitude"—these words have no place in documentation. Describe the behavior and its consequences. That's it.

When Should I Start Documenting Problems?

The first time you notice a pattern.

One mistake isn't worth documenting. Three mistakes in a week? That's a pattern. Document it.

Here's the test: Could this lead to formal discipline later? If yes, write it down now.

Example of something NOT worth documenting: "Hey Bob, you need better attention to detail."

Example of something worth documenting: "Bob, this is the third day you've forgotten the extra washer. I've mentioned this several times. I'll be monitoring your work, and if this continues, we'll move to formal discipline."

The second example is specific, references a pattern, and warns of consequences. That gets documented.

Do Employees Need To Sign Every Document?

Formal write-ups, yes. Informal notes, no.

For informal coaching conversations, you write your notes, tell the employee you documented it, date it, and file it. No signature needed.

For formal disciplinary action, get a signature. This proves they received the warning and understand what's expected.

When employees refuse to sign (and they will), you have options:

• The checkbox method. Add "I agree / I don't agree" boxes on the form. They check one and sign. Their opinion doesn't matter—what matters is proof they received it.
• The refusal technique. Ask them to write "I refuse to sign" on the document and initial it. Same result: proof of receipt.

If they won't do either, send the warning via email and copy HR. That email becomes your proof.

What Documents Do I Need Ready On Termination Day?

Everything that led to this moment, plus everything that happens next.

Before the meeting:

• The employee's complete file. Pull everything: all warnings, reviews, PIPs, policy violations, correspondence. Have it ready in case questions come up.
• A termination letter. This states the reason for termination, the last day of work, and any next steps. Keep it factual. No long explanations.
• Final paycheck details. Some states require immediate payment. Others give you until the next pay period. Know your state's rules.
• COBRA information. Federal law requires you to notify terminated employees about continuing health insurance. You've got 30 days from termination to provide this.
• Benefits information. What happens to their unused vacation days? Their 401k? Spell it out in writing.
• Company property checklist. Laptops, keys, ID badges, company credit cards. List everything they need to return.
• Unemployment information. While not required, providing paperwork for unemployment claims is decent practice.

Have all of this ready before you call the meeting. Scrambling for documents during termination makes you look unprepared and opens you up to mistakes.

What If I Didn't Document Anything And Need To Fire Them Now?

You're in trouble, but you still have options.

First, understand what you're risking. Without documentation, you can't prove the termination was justified. That makes you vulnerable to wrongful termination claims, discrimination lawsuits, and bad unemployment hearings.

If you're in an at-will state, you can fire without cause. But "at-will" doesn't mean "fire for any reason." You still can't fire someone because of their age, race, gender, disability, or other protected characteristics. Without documentation, you can't prove you fired them for legitimate business reasons.

Your options:

Start documenting now. If the problem is ongoing, document the next incidents thoroughly. Wait until you've built a case. This delays termination but protects you legally.

Offer a severance package. In exchange for severance pay, ask the employee to sign a release waiving their right to sue. This is called a mutual separation agreement. It costs money but avoids lawsuits.

Accept the risk. Fire them anyway and hope they don't sue. This is gambling. Sometimes you win. Sometimes you pay five figures to settle.

The lesson here: don't wait until you're desperate. Document problems from day one.

Can I Fire Someone Without Warnings First?

Yes, for serious violations. Everything else needs progressive discipline.

Immediate termination makes sense for:

• Theft
• Fraud
• Violence or threats of violence
• Sexual harassment
• Drug use on the job
• Criminal activity

These are called "gross misconduct." No warning required. Document the incident and fire them.

For everything else—poor performance, attendance issues, policy violations—use progressive discipline:

1. Verbal warning (documented)
2. Written warning
3. Final warning or PIP
4. Termination

This shows you gave them chances to improve. It also creates the documentation trail you need if they sue.

How long should I keep termination documents?

At least three years. Some lawyers recommend seven.

The statute of limitations for most employment lawsuits is two to three years, depending on your state. Keep everything until that window closes, then keep it longer just to be safe.

Store terminated employees' files separately from active employees. Mark them clearly with the termination date. If a lawsuit comes later, you'll know exactly where to find what you need.

What Mistakes Should I Avoid During Termination?

Not documenting enough. Documenting opinions instead of facts. Waiting too long.

Here are the biggest documentation mistakes:

• Being vague. "Performance issues" isn't enough. What specific performance issues? When did they happen? What was the impact?
• Including opinions. "Employee has a bad attitude" loses in court. "Employee cursed at a manager during a team meeting on March 15" wins.
• Inconsistent enforcement. If you fire one person for being late five times but let another slide after ten late arrivals, you've got a discrimination claim waiting to happen. Document everyone equally.
• No paper trail. Firing someone with zero documentation in their file looks arbitrary. Even if you had verbal conversations, you can't prove they happened.
• Last-minute documentation. Writing up six months of incidents the day before you fire someone looks fake. Document problems as they happen.
• Forgetting to date everything. Undated documents are worthless. Every warning, every note, every email needs a date and time.

Building a business means dealing with tough situations like firing employees. If you need help navigating HR issues, employment law, or any other aspect of running your business, visit our Unsexy Shop to schedule a consultation or sign up for one of our courses. We've helped hundreds of business owners avoid costly mistakes and build stronger operations.

Key Takeaways:

• Document every warning, every incident, and every conversation that could lead to discipline—this paper trail is your only defense against lawsuits
• Write facts and measurable impacts, not opinions or personality judgments about the employee
• Get signatures on formal warnings, but document informal coaching conversations without requiring sign-off
• Have all termination paperwork ready before the meeting, including the final paycheck, COBRA info, and benefits documentation
• Serious violations like theft or violence allow immediate termination, but performance issues require progressive discipline with documented warnings