While it may be tempting, avoid firing employees in reaction to their in-house complaints or lawsuits, even if you think the charges are without merit. Reason: A jury will likely see your actions as retaliation.
You'll notice that the following case seems to go against the grain: The court tossed out an employee's retaliation suit because the company proved his underlying harassment claim a meritless sham.
The problem: In most cases, courts hesitate to label a claim "frivolous." So you'd be taking a risk: If you think an employee's claim is frivolous and you fire him or her, a judge may think differently and the error could cost you thousands in back pay and damages. So when in doubt, play it safe, and don't lash out against public complainers.
Recent case: Electrician Ron Mattson filed an internal sexual harassment complaint against his female supervisor. His claim: On one occasion, the supervisor's breast touched his arm. (Due to the factory noise, workers have to stand close to speak.) Another time, she reached around him without touching him.
Even Mattson himself didn't seem convinced. When HR interviewed him, he said he thought the contact was accidental. Based on those comments, the company stopped the investigation. Undeterred, Mattson filed an EEOC complaint. Soon after, he was fired.
Mattson then filed a Title VII lawsuit, charging retaliation for his harassment charge. A federal appeals court tossed out the suit, saying an employee filing a charge is protected from retaliation only if he reasonably believes that he has been discriminated against. (Mattson v. Cater-pillar Inc., No. 03-2495, 7th Cir., March 4, 2004