Overview: Employee terminations are restricted for certain reasons or without proper procedures. While Title VII of the federal Civil Rights Act prohibits termination which discriminates against protected classes of workers, state law can be more expansive in creating classes of workers who are eligible for such protections, shielding employees who are not covered by federal law. Similarly, some states have broader restrictions against retaliatory terminations for certain types of protected activities, like filing workers' compensation claims and for blowing the whistle on unlawful or wasteful practices in the workplace.
Federal and state law also requires employers to utilize notification procedures when they plan to lay off large numbers of employees or close an entire facility. The federal WARN Act sets the minimum standard for covered employers, but some states impose even stricter requirements on employers based on the number of employees they plan to discharge.
Employees leave a company for other reasons as well, through retirement and resignations, some of which can be viewed as forced resignations or constructive discharges. Exit interviews and managing the exit process should be handled consistently and in compliance with federal and state law.
Trends: Employers are increasingly gravitating toward severance packages for employees terminated involuntarily in exchange for waivers or releases of claims against the employer. With these systems in place, employers can preemptively eliminate post-termination threats by providing outgoing employees with something of value. Employers must be prudent, however, in ensuring that such termination agreements are enforceable by crafting agreements in easily digestible language, providing valuable consideration in exchange for waivers and fully documenting the exchange.
Author: Michael Jacobson, JD, Legal Editor
Updated to include information on Cuevas v. Wentworth Group, which relates to the use of expert testimony as proof in certain claims for emotional distress.
Updated to include information on Capeggi v. Arche, Inc., which clarified requirements for valid, written employment contracts as opposed to at-will employment.
Updated to reflect a forthcoming law restricting forum selection clauses relevant to employee terminations.
Updated to reflect IRS final regulations defining 'spouse' for federal tax and benefits purposes.
An employer must file this form with the Georgia Department of Labor within 48 hours following a mass separation of 25 or more employees in one establishment on the same day for the same reason (other than a labor dispute).
An employer must file this form with the Georgia Department of Labor, in conjunction with DOL 402, within 48 hours following a mass separation of 25 or more employees in one establishment on the same day for the same reason (other than a labor dispute).
Outside of mass terminations, an employer must provide all separated employees with this form on the employee's last day of work or must mail it to the employee within three days.
The Securities and Exchange Commission (SEC) has issued a cease and desist order targeting provisions in severance agreements that limit an employee's ability to cash in on a whistleblower award.
Updated to include information on Gerardot v. Life Care Centers of America, which concerns wrongful termination in violation of public policy.
Updated to reflect amendments to the severance pay and 'mass layoff' requirements, effective July 29, 2016.
Guidance for HR on understanding and complying with federal and state law regarding legal and fair employee terminations.