When someone leaves your business, it’s easy to think the risk ends there. But if their exit isn’t handled properly, you could still face a lawsuit after they’ve gone.

Former employees can take legal action for wrongful termination, breach of an employment agreement or unpaid wages if they believe they were treated unfairly during or after their exit.

A recent case shows just how costly that can be.

The Mr. Dell case

In a 2023 employment case, a former employee named Mr. Dell sued his company for unpaid commissions and vacation pay after being terminated. The court found that although the employer claimed the termination was justified, it had failed to pay what he was owed when his employment ended.

As a result, Mr. Dell was awarded $80,687.29 in unpaid commissions, plus 8 percent in contractual vacation pay.

It's a clear example of how failing to close out employment correctly, whether that’s missing payments, delaying paperwork or failing to document terms, can expose even small employers to legal and financial risk.

If the offboarding process had been handled properly, the company could have avoided the claim altogether.

What proper offboarding looks like

Offboarding isn’t just about collecting laptops or shutting down email accounts. It’s the process that ensures a fair, consistent and legally safe exit for everyone.

Here’s how Mr. Dell’s employer could have avoided the claim and how you can protect your own business.

1. Clear communication and documentation

When concerns or tensions arise, formal communication is essential.

Document what’s been discussed, agree on next steps and confirm decisions in writing. Transparency protects you from claims that someone was pushed out unfairly or that key information was hidden.

2. A structured exit process

If the working relationship can’t continue, manage the exit properly.

That means a formal meeting, agreed timeline and written confirmation of key terms such as final pay, handover expectations and confidentiality. Having everything documented protects both sides.

3. Timely final pay and paperwork

Delays in salary, commissions, accrued vacation pay or severance can lead to legal claims.

In Mr. Dell’s case, the employer’s failure to pay owed commissions and vacation time was what triggered the lawsuit.

Paying everything owed on time and issuing accurate paperwork shows fairness and professionalism and keeps you compliant with state and federal wage laws.

4. Consistency for all employees

Apply the same standards to everyone, regardless of position or seniority.

Inconsistent treatment can lead to wrongful termination or discrimination claims, especially if a former employee feels they were treated differently from others in similar situations.

5. Professional closure

Hold a final meeting to confirm what happens next, collect company property and clarify post-employment expectations such as confidentiality or non-compete agreements.

This closes the relationship cleanly and reduces the chance of future disputes.

The lesson for employers

In the end, the Mr. Dell case came down to one thing: how the exit was handled.

For small businesses, the same principle applies.

When someone leaves, the way you handle that exit matters just as much as how you manage them while they’re employed.

A fair and professional offboarding process protects your people, your reputation and your bottom line.



If you’d like to review how your business handles employee exits or check that your processes are compliant, get in touch. We can help to make sure your offboarding protects you rather than puts you at risk.