How to terminate an employee is a sticky process that must be done legally and fairly. Most companies avoid legal problems by monitoring and noting employee performance and problems. For example, a manager might note that Douglas is late to work on the 2nd, 7th, 10th, and 18th. Company policy allows only three late arrivals per month. Because the manager has carefully noted these late arrivals, and warned Douglas each time, the manager can safely fire Douglas when he is late for a fourth time that month. Remember all federal, state, and local labor laws. Termination of an employee based on age, race, sex, sexual orientation, religion, etc., is not only morally wrong, but can lead to an enormous lawsuit.