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When Does 'Firing at Will' Become 'Discrimination'?

 

You can't fire an employee just because you don't like the worker. There are many caveats attached to the idea of employment at will:

  • You can't fire people for discriminatory reasons.
  • You can't fire them for exercising their rights under the Family and Medical Leave Act, the Fair Labor Standards Act, or any other federal or state employment statute.
  • In many states, you cannot fire someone for off-duty conduct as long as that employee doesn't bring such behavior into the office.

There are collective bargaining agreements to take into consideration, as well as protections for workers called to active military duty. Generally, exceptions to employment at will break into three areas:

  • Public policy — These represent a broad set of circumstances and vary from state to state. Take workers' compensation. Many states prohibit employers from terminating an employee just because of a workers' compensation claim.
  • Express or implied policy — Some states, like New Jersey, describe policies in employee handbooks as implied contracts. In Pennsylvania, the handbook is seen as a set of guidelines, not binding policies. In Montana, companies cannot fire established workers without "good cause."
  • Good faith — Recognized in 11 states including California, this says that in certain situations employers can dismiss employees only for just cause and cannot dismiss employees because of bad faith or through malice.

Obviously, a good rule of thumb would be to check with an attorney before firing anyone to make sure you're acting within the law of the state in question. But be forewarned; you can still be sued — even if you're on firm legal ground.

Experts note that before firing someone under at-will circumstances, consider that it's not uncommon to receive a retaliation claim. And you'd be right in feeling that you're being put on the defensive. Your best bet is to remember that there should be some kind of justification for putting an individual out of a job:

  • A worker's performance is poor.
  • Your company is in a financial bind, and you cannot afford the worker.

Don't make yourself an easy target with what looks like wrongful termination; this can mean incurring significant costs. Ex-employees can get an advocacy group, attracting the attention of attorneys willing to pursue their case pro bono on the way to developing a class-action suit.

The idea of discrimination has given employees a strong instrument to defend themselves with. Even if you say you're firing the worker for nonperformance, he or she may say it's because of gender or age. Discrimination has given almost everyone a cause of action.

As you can see, although job applications, employment contracts and employee handbooks contain language stating workers are employed at will, the idea that you can fire someone at any time for any reason is far from a reality. You'd be wise to work through issues with your employees before resorting to drastic measures. Clearly, working with a lawyer is called for so that you're protected.

 

 
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Our firm provides the information in this e-newsletter for general guidance only, and does not constitute the provision of legal advice, tax advice, accounting services, investment advice, or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal, or other competent advisers. Before making any decision or taking any action, you should consult a professional adviser who has been provided with all pertinent facts relevant to your particular situation. The information is provided "as is," with no assurance or guarantee of completeness, accuracy, or timeliness of the information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability, and fitness for a particular purpose.
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