Involuntary Terminations

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Federal

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Authors: Rebecca Sipowicz and Darrell R. VanDeusen, Kollman & Saucier, PA

Summary

  • Despite the continued existence and relevance of the Employment at-will Doctrine, very few modern employment relationships are truly "at will". Rather, the at-will relationship can be modified by contract, tort and statutory limits.
  • When a legal dispute arises, employers should expect and be prepared to offer a legitimate, lawful explanation for the termination. Termination for cause, typically associated with contract employees, requires a higher standard. See The Seven Rules for Just Cause.
  • When economic downturns occur, employers often turn to layoffs and reductions in force (RIFs) to cut costs. Employers must be careful, however, in identifying and selecting employees for layoffs, given the myriad legal issues that may arise following a mass termination. See Identifying Job Related Criteria for Layoff Selection.
  • Employers should consider alternatives to layoffs prior to instituting large scale terminations such as hiring freezes, salary rollbacks, employee furloughs and voluntary attrition programs including early retirement programs. Employers must craft any such alternative to termination carefully, so as not to discriminate against protected classes of workers. See Alternatives to Layoffs; Voluntary Attrition Programs.
  • All employers are well-advised to have outgoing employees sign release agreements waiving their rights to bring suit against the employer. Typically, any such waiver must accompany payment for severance or supplemental severance. It is particularly important to obtain a release when terminating an employee 40 years of age or older. Some causes of action cannot be waived. See Obtaining a Release, Generally; Obtaining a Release Under the OWBPA; Causes of Action That Cannot be Waived.
  • Certain large employers are required to provide 60 days advance notice of impending plant closings or mass layoffs to statutorily-defined individuals and organizations under the Worker Adjustment and Retraining Notification Act (WARN Act). Failure to abide by the provisions of the WARN Act exposes an employer to serious sanctions and costly legal disputes, though there are some key exceptions to the notification requirements. See WARN Notifications.
  • Other federal statutes make it unlawful to retaliate against employees who exercised protected legal rights such as opposing discrimination, assisting in efforts to enforce legal rights or disclosing employer misconduct. See Key Anti-Retaliation Statutes.
  • Individuals claiming retaliation must show they exercised protected legal rights and that, as a result, they suffered adverse employment actions such as denial of a promotion, demotion, reduction in wages or termination. See Types of Proof: Direct Evidence or Indirect Circumstantial Evidence of Retaliation
  • Some employers may choose to retain independent contractors to perform work in lieu of the traditional employment relationship. Terminating such relationships may be governed by contract, meaning the employer should exercise caution and strive to follow the terms of the contract. See Contract Employees.
  • Workers who are ill, who have suffered injuries, or who need to care for ill or injured family members may be protected by federal legislation, the Family and Medical Leave Act (FMLA), which requires certain employers to approve unpaid leave for qualified employees, upon proper notice from the employee. The FMLA also bars employers from retaliating against employees who have requested or taken qualified leave. See Termination Related to FMLA Leave.
  • Other types of workers are also protected by federal legislation such as pregnant women (Pregnancy Discrimination Act and/or Title VII), workers 40 years of age or older (the Older Workers Benefit Protection Act) and workers who serve in the military (Uniformed Services Employment and Reemployment Act). , Terminating Pregnant Employees, Terminating Employees Age 40 or Older; Terminating Members of the Military.

State Requirements

The following states have additional requirements for this topic under applicable state law.