A variety of reasons exist for a business-owner to consider terminating or “firing” an employee. The decision could be performance-based, lack of cultural fit, or perhaps simply a result of poor or changing business climate. You may wonder whether you need any reason at all to terminate an employee?
Like many things in the law, it depends. Yes, because the vast majority of U.S. States presume at-will employment in terms of employee-employer contracts. No, however, because of the various federal discrimination employment laws that every state and jurisdiction must obey.
Understanding the relationship between at-will employment and U.S. discrimination law is important for any business-owner. While owners certainly have control over who they employ, decisions regarding their personal cannot violate the strongly-written clauses of federal employment regulations like the Fair Labor Standards Act (FLSA) and the Civil Rights Act of 1964. Breach of anti-discrimination employment laws can—and often-times does—lead to lengthy, complicated, and expensive wrongful termination lawsuits (not to mention, poor publicity for you and your company). At-will employment status is something that should be communicated in your employment handbook.
At-Will Employment Explained
Throughout the country, the majority of employment contracts are considered at-will. In-fact, for 36 of the 50 U.S. States, at-will employment is assumed and does not need to be specified upon hiring a new worker.
At-will employment simply means that the termination of the relationship (ie. firing an employee) is not contingent upon contractual terms, conditions, or predetermined period of time, and can instead occur at any-point for almost any reason. At-will legislation gives employers (and workers) greater flexibility and control over their employment decisions. New York, for one, is an at-will employment state. Therefore, an employer may generally terminate an employment relationship at any time and for any reason, unless a law or agreement provides otherwise. For example, a federal or state law, collective bargaining agreement, or individual employment contract may place limitations on an otherwise at-will relationship.
New York employers must provide written notice to discharged employees stating the date of termination and the date that employee benefits, such as health and accident insurance, will be cancelled. This notice must be given to the employee no later than 5 working days after the discharge (NY Labor Code Sec. 195).
But the state laws prohibit employers from discharging employees for engaging in the following activities:
Court attendance. Employers may not discipline or discharge employees for absences resulting from a summons to jury duty or from a subpoena to appear as a witness or victim in a criminal case (NY Jud. Code Sec. 519 and NY Penal Law Sec. 215.14).
Notably, at-will employment is a two-way street: the employer can legally dismiss employees at any point usually without having to provide a reason, but likewise an employee can quit the position at any time also without the need for justification.
While at-will employment gives owners greater control and flexibility in terms of hiring and terminating employees, there are some situations where an employer cannot lawfully release a worker.
Discrimination framework
Although employers have near-complete control over their workforce, there are a few notable exceptions where a worker cannot be rightfully terminated. First and foremost, employee termination cannot be of discriminatory nature. Under U.S. Federal law, it is illegal to discriminate against a current or potential employee. In-fact, these laws stretch far beyond firing an employee; discrimination laws in the U.S. protect employees from harassment, differential treatment, and even the hiring process.
The extent of discrimination regulations has grown in both breadth and depth in the past half-century. In other words, these laws have expanded not only to provide stronger protections to discriminated persons, but also have grown to include more at-risk groups.
It is illegal to terminate a worker on the basis of their race, religion, sex, national origin, age, disability, citizenship, pregnancy, or genetic information. Doing so will be in violation of state and federal protections and will likely lead to a wrongful termination lawsuit. As an owner, all personnel decisions must be in compliance with anti-discrimination regulations in the U.S., such as:
- The Civil Rights Act of 1964 (Title VII and Title II, specifically)
- The Americans with Disabilities Act
- The Fair Labor and Standards Act (the Equal Pay Act, specifically)
- The Age Discrimination in Employment Act
- The Pregnancy Discrimination Act
It’s also worth noting that discrimination laws work on two levels: federal and state. The legislation listed above are all federal-level regulations. Most states supplement these federal laws with stronger protections for additional groups of people. States like California, have additional substantial protections, while other states like Wyoming, Mississippi, West Virginia, and Arizona don’t offer any of these additional protections.
Other Notable Employee Protections
In terms of illegally terminating an employee, discrimination laws are by-far the most commonly cited infringements throughout the country. However, there’s a growing number of lawsuits involving another type of wrongful termination: termination on the basis of workplace retaliation.
An owner, manager, or supervisor cannot punish an employee for reporting workplace wrongdoing. This is called retaliation, because the employer is “retaliating” against the “whistle-blowing” worker. Terminating an employee via retaliation is undoubtedly illegal and can lead to costly legal matters.
How to Avoid a Wrongful Termination Lawsuit
The first step to avoiding an expensive and time-consuming wrongful termination lawsuit is to garner an awareness of the many protections granted to commonly discriminated groups. As stated earlier, these regulations have grown in both breadth and depth in recent years, and they continue to expand into 2020.
Today, there’s a large push to amend protections for groups affected by employment discrimination on the basis of gender identity. While some states like California, Vermont, and Rhode Island (and 21 others) provide these protections on a state level, many states do not.
You’ll also want to be careful whenever you are considering terminating an employee that just came back from pregnancy leave or is considering taking such leave.
t’s crucial to know your state-specific regulations in terms of employment discrimination policy. While states are rather homogeneous in terms of at-will employment contracts, they are widely different when it comes to civil and anti-discrimination laws. Employers are largely able to terminate workers at-will, however they must be in compliance with their state and federal discrimination regulations.