One of the most difficult undertakings for any employer is carrying out a decision to terminate an employee. Of all the employment-related actions taken by employers, the act of termination creates the greatest risk of legal liability. Many claims of employment discrimination filed with the Equal Employment Opportunity Commission arise from the act of termination. In many federal courts, employment-related lawsuits account for more than 50% of all court filings; these lawsuits cover a wide range of subjects, such as failure to hire, defamation, breach of contract, and harassment, to name a few. However, most employees sue because they have lost their job or fear they will lose their job. Because these individuals have virtually nothing to lose, they often see filing a claim with the Equal Employment Opportunity Commission or filing a lawsuit as the only viable option-often suing for wrongful discharge. With a thoughtful review of the issues and the legislation addressed in this article, health care managers can reduce the unnecessary risk of expensive, time-consuming litigation.