1. © 2011 Pearson Education, Inc. All Rights Reserved Employment Law: New Challenges in the Business Environment, 5e Moran Chapter 5 Termination Employment Law: New Challenges in the Business Environment

2. © 2011 Pearson Education, Inc. All Rights Reserved Employment Law: New Challenges in the Business Environment, 5e Moran 5-2 Termination of Employment Termination is the discharge of an employee by an employer with or without cause. An employment relationship may terminate in the following ways: Employment at will Agreement Fulfillment of purpose

3. © 2011 Pearson Education, Inc. All Rights Reserved Employment Law: New Challenges in the Business Environment, 5e Moran 5-3 Employment at will Employment at will is the employer’s right to revoke the worker’s authority and terminate him or her at will. At will means either employer or the employee can terminate the relationship upon giving proper notice. Proper notice is considered to be duration of the pay period (usually 1-2weeks Many companies choose to state in their employee handbooks that employees will not be dismissed except for cause or in the case of layoffs In this context the employer has given up their ability to terminate at will

4. © 2011 Pearson Education, Inc. All Rights Reserved Employment Law: New Challenges in the Business Environment, 5e Moran 5-4 Reason for Discharge Employers may decide to tell employees the real reason for the discharge The reason should be job related, dealing with performance, attendance, theft, drug use, harassment negligence and so forth. Employers may not want to divulge their reasons for discharging an employee but they would be best advised to have a legitimate reason for discharging an employee.

5. © 2011 Pearson Education, Inc. All Rights Reserved Employment Law: New Challenges in the Business Environment, 5e Moran 5-5 Employment Handbooks Employment hand books provide a reference guide for employees concerning the employer’s policies. This dispels confusion and ignorance which may arise from lack of information. Employment hand books should describe in detail employment policies yet be clear and concise. Employment handbooks are not considered to be contracts in most states. However in the case of a written discharge procedure the courts may find this to be a binding contract.

6. © 2011 Pearson Education, Inc. All Rights Reserved Employment Law: New Challenges in the Business Environment, 5e Moran 5-6 Breach of Contract A breach of contract occurs when the employee’s reasonable expectations under the contract have not been fulfilled. Breach of contract suits arise in the following situations: When a contract is set for a defined period of time and the employee is discharged without cause the employer is liable for the duration of the contract When an employer specifies in an interview the reasons why and employee may be terminated, then discharge is limited to those reasons. When an employment handbook recites a litany of causes for an employee’s discharge then the employer will be bound to what it stipulates.

7. © 2011 Pearson Education, Inc. All Rights Reserved Employment Law: New Challenges in the Business Environment, 5e Moran 5-7 Severance Pay Severance pay may be given at the employer’s direction when an employee is discharged Often the enhancement for an employer’s willingness to grant severance pay is to have the employee promise to forego any lawsuit against the employer in lieu of the money received The employee must be made aware of the ramifications and sign the severance voluntarily.

8. © 2011 Pearson Education, Inc. All Rights Reserved Employment Law: New Challenges in the Business Environment, 5e Moran 5-8 Contesting Termination When an employee believes he or she has been terminated for a reason that is retaliatory or discriminatory they may seek to file with the correct labor rights groups such as the EEOC and US Labor Department. For example discrimination suits may go to the EEOC Labor safety can be addressed by the US Labor Department Settlements are possible once the case has been opened but if they are not reached then each party will have to appear for hearings.

9. © 2011 Pearson Education, Inc. All Rights Reserved Employment Law: New Challenges in the Business Environment, 5e Moran 5-9 Public Policy Exceptions Public policy exceptions to at will employment exist and depending upon state law may include the following Whistleblowing, testifying or commencing a law-suit for discrimination or harassment, and filing a workers compensation claim. Upon termination if an employee falls within a public policy exception he/she may file a lawsuit for wrongful discharge, retaliatory discharge or constructive discharge.

10. © 2011 Pearson Education, Inc. All Rights Reserved Employment Law: New Challenges in the Business Environment, 5e Moran 5-10 Wrongful Discharge An employer is guilty of wrongful discharge where its motivation or termination is discriminatory. This situation gives the employee the right to sue under Title VII of the Civil Rights Act, The Americans with Disabilities Act and, Age Discrimination in Employment Act or the Equal Pay Act, to name a few. Furthermore employees may not be discharged for exercising their constitutional rights such as freedom o speech or freedom of religion.

11. © 2011 Pearson Education, Inc. All Rights Reserved Employment Law: New Challenges in the Business Environment, 5e Moran 5-11 Retaliatory Discharge If an employee has made a claim of discrimination or is to appear as a witness in a discrimination lawsuit the employer may not take retaliatory action against the employee. It is also wrongful for a worker to be discharged for filing a workers compensation claim or whistleblowing on a companies illegal activities.

12. © 2011 Pearson Education, Inc. All Rights Reserved Employment Law: New Challenges in the Business Environment, 5e Moran 5-12 Constructive Discharge As opposed to outright termination, an employer may make the work environment so intolerable that the employee may be forced to resign. This amounts to constructive discharge The actions taken by the employer can be taken directly and indirectly through other channels such as coworkers in order to make the work environment uncomfortable for the employee.