When You Can’t Fire Employees at Will

At-will employment does have limitations when it comes to terminating employees. Read on below for some things to keep in mind before you fire someone.

Employment at will—the right to terminate a work relationship for any reason or no reason at all—is a state law concept structured to give both businesses and workers flexibility and mobility. For employers, employment at will obviously provides great latitude concerning staff management and it can help facilitate decisions related to seasonal and holiday workers, outsourcing, probationary periods, and policy effectiveness. Forty-nine states recognize employment at will as the default employment relationship (Montana being the exception).

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    But employment at will is not an employer’s carte blanche and the doctrine does have its limitations. While an employer need not necessarily give a reason for terminating an employee at will, if a reason is given, it must be a permissible one. Even when no reason is given, the circumstances of the termination might imply an impermissible motive underlying the termination. Further still, the relationship between the employer and employee may evolve over time to imply something more than at-will status.

    Employers should always pause and assess the situation before opting for termination.

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    Personal characteristics and immigration status

    Anti-discrimination laws, spearheaded by Title VII of the Civil Rights Act of 1964, prohibit workplace discrimination based on race, gender, national origin, or religion. Other state and federal laws have expanded anti-discrimination protections to age, sexual orientation, pregnant females, and new mothers.

    It is permissible to refuse employment or terminate an existing employee if their immigration status prohibits them from working; however, federal statutes like the Immigration Reform and Control Act (IRCA) prohibit hiring and firing decisions made based on legal alien status.

    Pretextual termination

    A perfectly legal basis for termination might later be perceived or characterized as pretextual for something more insidious, potentially making the circumstances surrounding a termination relevant to a wrongful termination lawsuit. Common examples of pretextual termination include releasing an employee before he or she qualifies for retirement benefits, or coercing an employee’s departure through uncomfortable or inhospitable work conditions in order to avoid paying severance.

    Not cooperating with company investigations

    Generally, employees might refuse to cooperate with a company investigation—a property search or drug test, for example. It is also generally alright for a company to respond to such refusal with a termination letter. But there are situations where non-cooperation is not proper grounds for terminating an employee at will. The federal Employee Polygraph Protection Act, for example, prevents termination for refusal to take a lie detector test.

     First Amendment rights

    While the First Amendment to the U.S. Constitution broadly protects freedom of speech, the Constitution generally regulates only government activities and its application to private employers is therefore limited. However, some types of speech, such as politically expressive speech, operate in a gray area. While several states have extended protection for political speech to private employees, Ohio is not among them.

    Other speech, such as discussions about workplace conditions and acts contrary to public policy, remain in the sphere of protection. Let’s delve into them.

    Politics affecting workplace conditions

    The National Labor Relations Act prohibits employers from banning discussions about workplace conditions, including how the political climate or the outcome of a particular election might impact the workplace. By logical extension, employers also cannot fire terminate employees for such discussions.

    Under the U.S. Supreme Court’s infamous decision in Citizens United v. FEC, 130 S. Ct. 876 (2010), which held that corporations have a right to make independent political expenditures under the First Amendment, employers can communicate directly to employees about elections, encourage them to vote for certain candidates, and, in many states, even compel them to do political work or attend political gatherings during work hours and for compensation.

    In a legislative parallel, the Civil Service Reform Act of 1978 prohibits discrimination (up to and including termination) of a public employee for his or her political affiliation. This protection has not found widespread purchase in the private sector. Ohio has no such employee protections, but it does require employers to allow for “reasonable” time off to vote at the polls. See R.C. 3599.06.  

    Retaliation

    Employers cannot terminate employees simply for attempting to defend or assert their rights. For example, consider an employee who files a good faith lawsuit for workplace discrimination; the employer cannot terminate the employee out of hand just for bringing the lawsuit. A court could find that such a termination was retaliatory.

    Another point of retaliation might be an employee challenging the business on public policy grounds. Public policy is an amorphous talking point in the law, but in our context the heart of it is to encourage acts that the public would view as morally or ethically positive and discourage those which are not. An employee’s refusal to commit an illegal act, reporting an employer’s illegal act (i.e., whistleblowing), or exercising a legal right (e.g., voting) are all favored by public policy and may not be used as a basis for termination.

    Implied contracts

    Sometimes, an implied contract can arise from an employment at will relationship. Such an implied contract could arise from representations by the employer that suggest job security to the employee. Courts will often carve out or limit an employer’s otherwise blanket right to terminate based on these kinds of representations. In some states, even at-will policies in employee handbooks can be amended or nullified by an employer’s subsequent representations and assurances. See, e.g., Wilson v. General Motors Corp., 454 N.W. 2d 405 (Mich Ct. App. 1990).

    Most of the prohibitions on termination that we’ve discussed require the employer to take some conscious (often contentious) action. An implied contract, though, can form from the most innocuous of conversations. Hence, employers should be careful about representations made to employees in any circumstance.

    Max Julian is an attorney at The Gertsburg Law Firm. Julian’s practice is focused on commercial litigation. He can be reached at mj@gertsburglaw.com or by phone at (440) 571-7541.


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    Next up: Gen Z: 7 Must-Have Characteristics They Want in a Job
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  • Gen Z: 7 Must-Have Characteristics They Want in a Job

    In just a couple short years, Generation Z is expected to comprise a fifth of the workforce. If you want to successfully attract this talent, make sure you tailor your positions to the following seven characteristics this generation wants in a job.

    Generation Z, those born after 1995 and are just entering the workforce, are different than any generation that has come before them. They are a thoughtful generation in making decisions and that is especially true when it comes to accepting a job. Read on below for a list of the seven things that matter most to this generation in their job search.

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    Generation Z plans to change companies no more than four times in their career. Thus, it is important to them to work for a company who offers growth opportunities. From the initial interview through annual performance reviews and everything in between, this generation will be challenging their managers to show them a path. They will want to understand what opportunities are present both inside and outside of the company.

    Generous pay

    This generation watched their parents struggle through a recession. They understand money doesn’t grow on trees and that you must work hard for what you have. They expect to work harder than any prior generation, but they also expect that their salaries match their effort. Generous pay is a priority to them.

    Making a positive impact

    Philanthropists at heart, Generation Z wants to work for companies that are making a positive impact. They want to know the companies they work for are good corporate citizens and are doing good for the communities in which they operate.

    Job security

    Because this generation doesn’t want to change jobs often, it is important to them to know they have job security. They want to feel comfortable in their roles and know that if they work hard, they will have a job.

    Healthcare benefits

    With the ever-changing political scene surrounding healthcare, it is no wonder this generation wants to ensure that they have good healthcare benefits.  It is important not only that they have coverage, but good coverage.

    Flexible hours

    Like the millennials that came before them, Generation Z would like to see flexible hours. Unlike millennials, they prefer to do their work in a traditional office setting with small groups.

    A manager to learn from

    Managers to learn from are becoming an increasingly important attribute. Generation Z wants to learn from their manager as they would like to stay in their companies and grow. Who better to learn from than the person who is leading you?

    If these are the factors that are important to Generation Z, do you feel your company is ready to meet their demands? How might you change your internal policies? With this group becoming 20% of the workforce in 2020, time is of the essence. 

    Ashley Basile Oeken is president of Engage! Cleveland, a nonprofit whose mission is to attract, engage and retain young, diverse talent to the Greater Cleveland area. Learn more about her organization’s work by clicking here.


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    Next up: Health Insurance for Same-Sex Spouses
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  • Health Insurance for Same-Sex Spouses

    Following the United States Supreme Court’s decision on June 26, 2015, same-sex marriage is now recognized in all 50 states. While Medical Mutual has covered same-sex-spouses in many of its health plans in the past, the ruling means same-sex spouses will be considered eligible in all of its plans.

    Following the United States Supreme Court’s decision on June 26, 2015, same-sex marriage is now recognized in all 50 states. While Medical Mutual has covered same-sex-spouses in many of its health plans in the past, the ruling means same-sex spouses will be considered eligible in all of its plans.

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    Many health insurance carriers are offering a limited special enrollment period for same-sex spouses who were previously married (before June 26, 2015) in a state where same-sex marriage was already legal.

    While this special enrollment period may only be available from other carriers for 30 days, Medical Mutual is giving previously married same-sex spouses a full 60 days to enroll in coverage. The deadline will be August 25, 2015. Dependents of same-sex spouses can also be added to existing plans during this time.

    Previously married same-sex spouses who miss the August 25, 2015, deadline for special enrollment will have to wait for their employer’s open enrollment period. Those married on or after June 26, 2015, will be required to follow the same processes for a qualifying event as spouses of opposite-sex marriages. 

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    Next up: Hire and Hope is Not an Effective System
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  • Hire and Hope is Not an Effective System

    “Ruth, I need your help.” Diane sounded anxious on the phone. “I have a dear friend who I’ve known for over twenty years. She really loves our hotel and she’s here all the time. She saw how much stress I was under and she offered to take the office manager job for me.” Well, I got her up and running but before I knew it she had created a complete mess.” Diane says.

    “Ruth, I need your help.” Diane sounded anxious on the phone. “I have a dear friend who I’ve known for over twenty years. She really loves our hotel and she’s here all the time. She saw how much stress I was under and she offered to take the office manager job for me.” Well, I got her up and running but before I knew it she had created a complete mess.” Diane says.

    “Uh-oh,” I say.

    “She got a lot of the billing wrong. Long story short, by the time I noticed what was happening she had upset a number of guests and I had to refund thousands of dollars to them.”

     “Oh my!” I say. “What else?”

    “She overpaid some vendors, and now I am in a terrible cash crunch.”

    “Did you already fire her?”

    “She quit already. She was so humiliated when the whole thing came to light. But it took me weeks to realize what was going on,” says Diane. “I figured that since I’ve known her for so long, that I made a good decision. I just hope that I haven’t lost a friend along with the money I lost,” Diane admitted.

    “Yes. That is typically how many employers hire people,” I say.  “Diane, it's not you, it’s your system.”

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    Bad hires are expensive both financially and emotionally. Even when hiring friends and family, you  need a system in place. Here is a three-part formula designed to put the right person in the right job. 

    Ask yourself this question: What problem am I trying to solve?  We think about hiring rock stars and people that may solve all of our problems or people we like. Creating your benchmark first helps to avoid this mistake.  

    Automate the process. A screening process isn't a new idea but be sure that it constrains people to easily follow directions. We have found an 80% decrease in the work of hiring and an increase in better hires by instituting automation that allows us to see someone's behavior in action.  

    Use DISC assessments. Don't forget to match a candidate’s behavior profile to the job benchmark before you decide to have a conversation with anyone. Assessments after you are emotionally attached give you information, but won't help you to make the correct decision about solving your problem. 

    Remember – there are no bad employees. There are only good people in the wrong jobs. Get the right people into your job. Set yourself up for successful hires from the beginning and put an end to hire and hope.

    Learn more about best practices in hiring at Ruth's Small Business Convention workshop: It's Not You! It's the Hiring Process that's Flawed on Thursday, October 23 from 1-2 p.m.

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    About Ruth


    Ruth Schwartz is a PCC, business and executive coach, motivational speaker, author, facilitator of assessments and the creator of the Fail Proof Hiring System.  She owns High Performance Advocates, a management development company and is an enthusiast for working with successful entrepreneurs and business leaders who are tired of task and employee management are ready to create change. Connect with Ruth on Twitter and LinkedIn.   


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    Next up: Hiring 101: Evaluating the Candidate
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  • Hiring 101: Evaluating the Candidate

    Your business is growing and you’re ready to bring someone aboard to join your team. But the hiring process can be complicated and intimidating. Check out these important things to keep in mind as you attempt to find the perfect candidate.

    Good employees can be the most crucial ingredient in a successful business. But finding and hiring good employees can be among the most challenging aspects of running a small or growing company. There are some important things to keep in mind as you set out to add the best-of-the-best to your team.

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    Know the laws

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    Numerous federal and state laws govern the various processes of soliciting employees, including advertising, interviewing and hiring. If you don’t follow the rules, you may find yourself as the defendant in a lawsuit over your hiring (or non-hiring) practices.  Or, you may end up being stuck with a very costly and unproductive employee who you have trouble firing.

    Employers are subject to many laws requiring equal employment opportunity and prohibiting discrimination in employment, which can include:

    • Title VII of the Civil Rights Act of 1964;
    • Equal Pay Act;
    • Age Discrimination in Employment Act;
    • Civil Rights Act of 1966;
    • Immigration Reform and Control Act;
    • American with Disabilities Act; and
    • numerous other federal and state laws.

    Don’t even Go there

    You probably have many questions that you would like to ask a prospective employee. But certain questions can only get you in trouble (yes, you can trip over many laws in an interview). The following seven questions are examples of questions you should NOT ask:

    No.1: How old are you?

    No. 2: Do you have any disabilities?

    No. 3: Are you pregnant?

    No. 4: Are you married with kids?

    No. 5: Have you ever been arrested?

    No. 6: What is your religious affiliation?

    No. 7: What is your sexual orientation?

    Focus on questions relating to the skill and experience of the candidates and the qualifications needed to perform the job.

    Do your homework

    Once you find the “perfect” candidate for the job, you should perform a background and reference check before extending an offer. Ideally the prospective employee will sign your “background check permission form,” which allows you to get reference information from prior employers and even do a credit-check. Before formally requesting information in writing from a prior employer, make sure the prospective employee gives you permission to do so. However, you may find that previous employers are reluctant to give much information, often confirming only the employment, position and maybe salary. (And yes, your company should have a similar policy with respect to your departing employees.)

    From a fact-checking perspective, think about checking out school experience (some people embellish their degrees or where they went to school); talk to the candidate’s former supervisor(s), if possible, who may provide more meaningful information than the company’s HR department; for sensitive jobs, check for felony convictions; and verify past employment (ensure the candidate actually worked at each of the companies listed, in the position listed, and check dates of employment).

    Stacy is a founding member of BauerGriffith, a business law firm providing high quality legal and business counsel to a wide array of clients, with an emphasis on non-profit organizations, small business and individual planning clients. She serves as outsourced corporate counsel for diverse clients, partnering with executive management to design, plan and implement stated and defined business objectives within legal parameters.
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    Next up: Hiring 102: 5 Must-Have Items for Your Staffing Toolkit
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  • Hiring 102: 5 Must-Have Items for Your Staffing Toolkit

    There’s a lot to consider, and a lot of information to gather, when your business is seeking new candidates. To make it an easier, more streamlined process, we’re outlining five items you should have in your hiring toolkit.

    In Hiring 101: Evaluating the Candidate, we discussed the hiring laws to be aware of, appropriate questions for interviewing and background information you should seek. Now we’re delving into five specific items you should have on hand and included in your hiring toolkit. 

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    Hiring Toolkit Item No. 1: Employment applications

    Think about requiring all prospective employees to complete an employment application. The application solicits a lot of information that will help you decide whether or not to hire the person. However, be careful regarding what is included in the application; remember some questions are illegal to ask. A good employment application asks for the following information:

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    • Prior work experience
    • Special skills
    • Educational background
    • Legal right to work in the U.S.
    • Consent for the company to check references

    Attach the prospective employee’s resume to the application and keep these on file. This can be helpful later if, for example, you decide to fire an employee after discovering he/she lied about the information on the employment application form.

    Hiring Toolkit Item No. 2: Offer letters and mistakes to avoid

     When you find the applicant who seems to meet your needs, you are ready to make an offer. Although you can do this over the phone, it is better practice to put it in writing to avoid miscommunication or misunderstanding. Include the following items:

    • Position and duties
    • Start date
    • Compensation
    • Employment-at-will status
    • Various other legal provisions to protect you and your company

    Be careful not to mislead the applicant or promise something you can’t deliver. For example, avoid statements that give the applicant a false sense of security, or what might be construed as a long-term promise of employment. Stay away from phrases such as “We expect you will have a long and prosperous career here,” “You can expect your salary to increase by X% each year,” and “After a probationary period, you will enjoy the benefits the company provides to its long-term employees.” Also avoid offering different benefits to an applicant than those available to other employees. Your current employees may see this as discriminatory and take action accordingly.

    If you intend to offer stock or stock options, make sure it vests, or is earned, after some significant period of continued employment. If you plan to offer a commission, bonus or profit-sharing arrangement, make sure the percentage or amount is reasonable and does not make the employee unprofitable for your business.

    Hiring Toolkit Item No. 3: Employment agreements

     Employment agreements are not necessary for most employees, though you may want some high-level employees to sign one. A well drafted employment agreement will cover the following items:

    • Job position and whether the employer has the right to change the position
    • Length of the agreement
    • Salary, bonus and benefits
    • Whether the employee gets stock or stock options
    • When the employer can terminate the employee for good cause, along with a definition of what good cause means
    • When the employer can terminate the employee without good cause and what severance payments the employer will provide
    • Job responsibilities
    • Confidentiality obligations
    • Where and how disputes will be handled

    Hiring Toolkit Item No. 4: Confidentiality and invention assignment agreements

     Your employees, especially in high-tech businesses, have access to a lot of the company’s confidential information. In addition, you expect your employees to come up with ideas, work product and inventions that are useful to your business. To ensure your employees keep the company’s proprietary information confidential, you should require them to sign a confidentiality agreement. Either as part of the confidentiality agreement or as its own agreement, your employees should also acknowledge and agree that the ideas, work product and inventions they come up with belong to the company, not them. The following key provisions should be included:

    • The employee cannot use any of the company’s confidential information for his/her own benefit or use.
    • The employee will promptly disclose to the company any inventions, ideas, discoveries and work product related to the company’s business made during the period of employment, and that the company is the owner of such inventions, ideas, discoveries and work product.
    • His/her employment with the company does not breach any agreement or duty he/she has with anyone else, nor can he/she disclose to the company or use on its behalf any confidential information belonging to others.
    • The confidentiality provisions will continue after his/her termination of employment.
    • The agreement does not represent any guarantee of continued employment.

    Hiring Toolkit Item No. 5: New employee paperwork

     When a new employee joins the company, make sure to have all the appropriate paperwork ready for him or her to sign, preferably on day one, including the following:

    • Company employee handbook
    • IRS forms
    • Benefit elections
    • Confidentiality and invention assignment agreement
    • Form I-9
    • Emergency notification

    Hiring new employees can be an often arduous and sometimes unexpected process. Knowing that you have these items accessible and ready to go will help the situation seem less intimidating and will ensure that your company is operating at full capacity as soon as possible.

    Stacy is a founding member of BauerGriffith, a business law firm providing high quality legal and business counsel to a wide array of clients, with an emphasis on non-profit organizations, small business and individual planning clients. She serves as outsourced corporate counsel for diverse clients, partnering with executive management to design, plan and implement stated and defined business objectives within legal parameters.

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