I run a small family business in Massachusetts with my parents who own the business. We have 15 employees and one of them, a man my father hired in a weak moment, is becoming a problem. He doesn't do the job well, is often late, and hints around that, because he is Hispanic, that my dad would never fire him. I have no idea what he means by that, but I assume he is suggesting that he will sue us if we try to fire him. I've talked to him a couple of times about his poor work habits but have never put anything in writing. Honestly, we don't really have good employee policies in place and don't really have employee files that could be used to document issues like we are facing with this guy. Frankly, we never had any problems with our employees before because we usually hire friends of friends, etc.
Now my question is, can I go ahead and fire this guy or should I start a paper trail even though that might add some time to process? I know he can sue us for any bogus reason, but I really need to get him out of here. I could write up a report based on his last tardy appearance, because that only happened two weeks ago. Thanks for any opinion you may have.

Terminating employee in MA
You have 15 employees. It's probably time for you to talk to an employment law attorney and put some procedures and practices in place that will help you avoid or mitigate legal issues and make it easier to terminate problem employees. Employment law is governed by state and federal laws and regulations and is, frankly, a highly regulated area. In other words, there are a lot of traps out there for employers, even employers who, like you, have done nothing wrong. Given your concerns about a frivolous lawsuit, I would not take any action with the problem employee until you have established a relationship with an attorney.
If you decide to go it alone, were I in your shoes, I would create a paper trail before taking action, preferably with two or three incidents. If you end up having to fire the employee and he sues you, there is simply no substitute for accurate and contemporaneous documentation. Give him a written warning about his latest shortcoming, explain it to him, ask him to sign it, and make sure he understands that it is a warning, and that if he does not improve his conduct, he will be terminated. To further document the issues, you could refer to your time card system, assuming you have one. If you have an employee handbook (you should), make sure your termination strategy is consistent with its policies. It would also be a good idea to start employee files for all of your employees and, going forward, treat their violations of your work policies in a uniform manner (so employees cannot argue that you treat employees differently based on some illegal consideration, such as race). Good luck.
The Art of Firing Employees
I think the advice you got from the editor regarding company policies makes sense. You not only need to be careful with this employee, but should take care with all 14 of the others you have. With that many workers, you really would benefit from established policies that let employees know what's expected of them and help you properly manage operations.
The potential problem here is not that the worker's suit would necessarily have merit. As you probably know, there is no law that protects an employee's job simply because of his race. Any worker of any ethnic background can be let go for poor performance or a host of other reasons, and there no law that even suggests this might be illegal. Still, disgruntled former workers frequently make claims that their firing was disciminatory or otherwise improper, and even the most well-intentioned employers must respond. This normally cannot be done effectively without counsel, and costs for lawyers and/or settlements can add up quickly, even in cases with no merit at all. It makes sense, therefore, to have established policies for disciplining workers like this one. The more communication and documentation you have before you are forced to fire an employee, the less likely you are to face either a demand from his/her lawyer or, what's worse, a suit with the Massachusetts Commission Against Discrimination.
Jack K. Merrill, Esq.