According to the Wall Street Journal and the EEOC, age-discrimination allegations by employees is up 29% this year. With so many boomers still in the workforce, who’s surprised? But if it’s a legitimate business decision—you have to let the older employee go—how do you avoid a lawsuit?
Susan Heathfield, management and organization development consultant for her own company and About.com “guide”, recommends:

Just do your homework. Make sure your managers are well-trained about documenting performance for each employee. Note that I did not say just underperforming employees, I said, each employee.

Then, follow up with employees who are not performing. Coach and counsel, try to help the employee improve, and document each of these steps. If all else fails, document a formal improvement plan with the goal of really effective communication with the employee. Do these steps correctly, over a period of time, and you will know, both legally and ethically, that you did your best to help the employee succeed.

Will you never be sued? Most likely not, but keeping a paper trail and proving that you really did try will prevent any lawsuit from spiraling out of control.