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Given the employee's history, you should expect him to take legal action if you terminate him and do not obtain a release of claims from him in return for a severance package.
Knowing the likelihood that legal action will follow, it is critical that you document all the reasons the employee is being terminated. It is NOT illegal to terminate an employee who does not comply with company policies or is insubordinate, which appears to be the case here. So it is important to document each incident independently and present it to the employee to acknowledge that he has seen the warning in writing.
It is also important to follow the same policies and procedures you would for an employee that has not filed a worker’s comp claim, so it can be shown that you did not retaliate against the employee for filing a worker’s comp claim, but for reasons any other employee would be terminated.
I would also consult further with a local employment law attorney so they are in a position to respond promptly to any action the employee may take against you.
Or, you could request that the attorney draft an enforceable severance and release agreement if you wish to pay the employee severance in return for releasing any claims he may have against the company. That is often the most cost-effective option to prevent a lawsuit.
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