HRMG 505: Quiz 4

Layoffs: Determining Which Employees to Lay Off

-Employers generally have the right to reduce the size of their workforce. -Employers must decide who will be laid off in an objective and nondiscriminatory manner and avoid any intentional or unintentional consideration of an employee's race, color, religion, sex, national origin, age, disability, or membership in any protected class.

Notice: Employer Conduct That May Undermine Notice

-A past practice is employer conduct that deviates from company policy and establishes a revised standard to which employees may expect adherence. -Employers that intentionally or unintentionally establish a past practice generally have the right to revert back to the enforcement of the original policy. -The employer can likely require employees to adhere to the rule consistent with how it was written but only after the revision is clearly communicated to the affected employees. -Even if an employer provides notice of its workplace rules, it must also ensure that its supervisors and managers do not engage in behavior that undermines the effectiveness of said workplace rules.

Release Agreement

-A release agreement can prevent terminated employees from filing a legal claim challenging the termination as well as for any other issues arising out of their employment. -Determining rights to be waived - employers have discretion to structure releases to protect themselves from potential liability. -Individual rights cannot be waived under federal law - rights under the NLRA (the National Labor Relations Act governs the relationship between employers and labor unions) and the USERRA (the Uniformed Services Employment and Reemployment Rights Act provides employees serving in the military with certain rights to take leave and to return to employment upon completion of their service. -Individual rights that cannot be waived under state law. -Limitations on timing of conduct that gives rise to a claim - a release can only affect the rights of an employee based on past conduct, not future -Contract law generally applies.

Liability for a Violation of the WARN Act

-A violation of the WARN Act can result in significant financial penalties. -Can include back pay and benefits for each affected employee for each day of the 60-day notice period during which the employee was not informed of the layoff.

Termination of an At-Will Employee for No Cause

-Although an employer is permitted to terminate an at-will employee for no cause, this rarely occurs. -A "no cause" termination might impact an employer's ability to retain and recruit top talent because others would fear they would be terminated for minor infractions.

Judicial Modifications: Duty of Good Faith and Fair Dealing

-An employee may have a claim for wrongful discharge if the employer acted in bad faith when making the decision to end the employment relationship. -Duty of Good Faith and Fair Dealing: contractual theory that may impose an obligation on both parties in an employment relationship to act in good faith. -This obligation limits employers' termination rights and requires the two parties who enter into the employment relationship to act appropriately toward one another, regardless of an application of the at-will doctrine. -At least 11 states have applied this contractual theory to employment relationships and at-will employees.

Termination of an At-Will Employee for Cause

-An employer can terminate an at-will employee for valid reasons: -Employee's failure to report to work on time, to respect a supervisor, or to satisfactorily perform a job duty. -Because an at-will employee did not fit in with the culture of the workforce.

Rule Must Be Reasonable

-An employer will be able to support a termination for the violation of a rule only if the rule is a reasonable one. -No precise definition for the term reasonableness, because it requires a fact specific analysis of the nature of the misconduct and the business of the employer. Generally an employer can establish reasonableness by showing: -rule serves a legitimate business purpose, -rule is common among other employers in the industry, or -rule is necessary to address a specific safety concern.

Importance of Written Documentation

-As soon as a workplace issues arises, employers should begin to document the circumstances surrounding the misconduct, as well as the steps taken to address the inappropriate behavior. -Establish a record of past problematic behavior. -Refute allegations of discriminatory conduct.

Statutory Limitations: Federal and State Laws

-Employees cannot be terminated for a reason that is prohibited by a federal or state law, i.e., for a discriminatory or illegal reason. -Prohibition on workplace discrimination. -Federal and state discrimination laws. -Cannot be terminated based on a membership in any protected class. -Cannot be terminated in retaliation. -Whistleblowers are protected. -The NLRA protects the rights of individuals to organize their workplace, which means that an employer cannot justify its termination of an at-will employee because of their participation in an organizing drive. -NLRA also provides employees with the right to engage in protected activities - related to the terms and conditions of employment.

Company Handbooks: At-Will Disclaimer

-At-will disclaimer: language included in a company handbook that makes it clear that the benefits described in the handbook are not intended to alter the at-will status of the company's employees. -If a disclaimer is used, it should be clear and conspicuous, meaning that it is prominently displayed and distinguishable from the remainder of the handbook text. -An at-will disclaimer might be as simple as a statement indicating that, notwithstanding any of the handbook language, at-will employees can still be terminated with or without cause and with or without notice. -Most courts recognize that the inclusion of an at-will disclaimer weakens the claims of employees asserting that the handbook imposes some type of contractual obligation on their employer and that their employment is not governed by the at-will doctrine. -However, there are differences of judicial opinions on whether these disclaimers do not bind the parties and allow employers to retain their broad termination rights. -In most cases, courts look to the totality of the evidence and weigh the presence of a disclaimer (and whether it is clear and conspicuous) against the other evidence (including the types of provisions the handbook contains and any other circumstance that might affect the employee's employment status) to determine the ultimate impact of a disclaimer.

Key Component in Creating a Severance Policy: Calculation of the benefit's precise value

-Calculation must be nondiscriminatory -Minimum and maximum payments: employers may establish a minimum severance payment regardless of the length of time of service as well as a cap that limits severance -Reimbursement of partial payment if employee obtains employment before severance time period has expired -Timing of benefit - employers have latitude in determining how to pay

Post-employment Liability: Defamation

-Cause of action relating to the communication of false information about an individual (in a verbal or written form) that causes harm to his reputation or deters third persons from dealing with the individual. -Slander: refers to a defamation claim based on communication that is spoken. -Libel: refers to a claim based on a written communication. -Both parties to an employment relationship may be subject to liability for a number of other types of post-employment conduct.

Company Handbook Limitations on Implied Contracts

-Certain provisions in a company handbook have been held to limit termination rights: -Progressive discipline: may suggest that an employee cannot be terminated without going through gradual escalation of discipline process. Suggests that an employee cannot be terminated for a first offense (particularly for a minor infraction). -Termination rights: a company handbook might list the reasons for which an employee can be terminated, thereby limiting the employer's termination rights. To retain termination rights, language should mirror the at-will doctrine. -Severance policy: may suggest that an employee will only be terminated for certain reasons and with notice, thereby limiting expansive termination rights.

Elements of a Defamation Claim

-Communication harms an individual's reputation: current reputation of the individual is relevant. Does not require actual harm but prejudices the person in the eyes of others. -Publication: actual communication of the harmful statement to a third party. -False: a truthful statement will not subject an individual to liability, even if it is harmful to an individual's reputation.

Company Handbook Limitations on Implied Contracts Cont.

-Company handbooks are not required, yet most employers find it to be efficient and effective to compile all such necessary policies and notifications into a handbook for distribution, with updates as appropriate. -Employers must carefully draft any company handbook provisions that are designed to highlight workplace policies or to offer benefits to employees because these could be used as a basis for an implied contract claim. -Certain provisions have the potential to undermine an employer's position that it intended to retain wide latitude to terminate its at-will employees.

Release Agreements to Protect Other Interests

-Confidentiality of the release and its terms: A confidentiality clause could be included in the agreement to prohibit either party from disclosing certain details. -Confidentiality of information obtained during employment: Terminated employees are generally prohibited from sharing trade secrets. An employer may want additional protections beyond trade secrets. -Whether or not an employee has an obligation to keep information obtained during employment confidential, absent an independent agreement to that effect, is based on a fact-specific analysis of the nature of the information.

Restrictive Covenants

-Contractual provisions that limit the rights of former employees to engage in certain conduct that could result in competition for the employer or the sharing of confidential business information after the employment relationship ends. -Parties are not obligated to include restrictive covenants in release agreements. -The precise nature of the types of covenants that will be enforced is governed by state law and subject to stringent judicial review as restrictive covenants are generally disfavored.

Just-Cause Standard and Judicial Imposition Based on Employer Conduct

-Courts have imposed the just-cause standard based on employer statements and conduct that suggest the parties did not intend for the employer to retain broad termination rights. -EX: Verbal statements, company handbooks (could intentionally or unintentionally contractually obligate an employer to apply a just-cause standard to all employees, including those at will), Voluntary imposition by the employer of the just-cause standard. -Potential inconsistencies arise between employers wanting to maintain broad termination rights and policies within the company handbook that may suggest a just-cause standard rather than an at-will employment relationship (namely termination language and progressive discipline policies). -A clear and conspicuous at-will disclaimer can help remedy this and can state the use of these policies is not intended to alter the at-will status of the company's employees.

Limitations on Termination Rights: Implied Contract Cont.

-Courts look to a fact specific analysis of the totality of the circumstances to override the presumption that an employer retained broad termination rights. -Includes statements made during the recruitment process or interviews, language used in job advertisements, and company documents that establish terms and conditions of employment. -Statements about satisfactory job performance and continued employment may create an implied contract. -Verbal and written statements about an employee's length of employment may create an implied contract. -Based on the uncertainty surrounding how a particular court might view such statements, employers should pay careful attention to the statements made and documents given to at-will employees relating to the employee's job security.

Company Handbook: Disclaimers

-Employers generally want to retain rights that are not legally required. -May add general disclaimer to the handbook reserving the right to modify the terms at their sole discretion for any reason at any time. -May add additional disclaimer specifically designed to ensure handbook does not undermine employer's broad rights to terminate an at-will employee for any reason at any time.

Components in Creating a Severance Policy

-Employers have wide discretion to implement a severance policy of their own choosing. -However, as a term and condition of employment, the severance benefit must be offered and calculated in a uniform and nondiscriminatory manner. -There is no set formula for a calculation of the benefit, although it is usually tied to an individual's salary and length of service. -Employers generally use the same formula for the calculation of severances as they do for layoffs. -To minimize the potential for a claim for discriminatory conduct, employers should establish a clear policy that outlines the details about the benefit, places employees on notice of the rules, and ensures the rules are implemented in a uniform and nondiscriminatory manner.

Practical Application of the At-Will Doctrine

-Employers retain broad termination rights. -Yet there are a number of limitations that provide at-will employees with some job security, depending on the reason the employer makes a decision to terminate their employment. -There is a persistent tension between those who favor a strict application of the at-will doctrine, enabling employers to retain full discretion to terminate employees for any legal reason, at any time, and those who believe employees should have the right to continued employment provided they continue to satisfactorily perform their job responsibilities.

Investigation

-Employers should conduct a complete and impartial investigation to determine whether an employee actually engaged in the misconduct used to support a just-cause termination -Employer should then make an unbiased determination of whether the termination is appropriate. -The presentation of evidence illustrating that the employer conducted an appropriate investigation prior to terminating an employee is another factor used to support a showing that a termination decision was supported by just cause.

Appropriateness of the Penalty

-Even if an employer can establish an employee violated a reasonable rule that was uniformly enforced, the employer must still illustrate the termination is the appropriate level of punishment for the misconduct. -A just-cause termination can likely be challenged in the event the termination is viewed as an overly harsh response to the misconduct. -The appropriateness of the penalty will be based on an analysis of the specific facts relating to the nature of the misconduct and the impact on the operations of the employer's business. -The final issue relevant to whether a termination is supported by just cause relates to whether the ending of the employment relationship in response to the violation of a rule is a reasonable response based on the nature of the misconduct.

Notice: Progressive Discipline

-Even in the absence of a widely disseminated verbal or written notification about the existence of a particular rule, an employer might illustrate an employee was on notice of a rule by showing that the employee was subjected to progressive discipline for violating it. -The purpose of progressive discipline is to impose escalating levels of discipline on an employee in an attempt to provide him with notice of any inappropriate behavior and to give him an opportunity to correct it. -If an employer can show that the employee was counseled about the importance of a particular workplace rule, or issued a verbal warning for failing to comply with it, or then given a written warning or suspension, this conduct could constitute a notification of a rule.

Release Requirements for a Group of Employees

-Exit incentive program: employer plan that would provide certain employees the opportunity to receive enhanced compensation in exchange for voluntary resignation and the signing of a release. -Usually includes offering two or more employees enhanced compensation in exchange for a voluntary release. -Employers are subject to additional requirements under the OWBPA to ensure employees are knowingly and voluntarily waiving rights, such as additional time to consider the agreement and additional information about employees who were offered continued employment.

Situations That Might Provide Employers With the Right to Provide a Shorter Notice Period

-Faltering Company -Unforeseen Consequences -Natural Disasters -For these exceptions to apply, the notice that is given must be provided as soon as it is practicable to do so, and it must include the relevant information. -Additionally, the employer is required to submit a statement supporting its position that one of these exceptions applies. -Shorter notice for a faltering company is based on an employer's showing that altering employees to the situation would negatively affect ability to secure funding that might have enabled the employer to avoid some or all of the layoffs.

Benefits of Severance to Employees

-Financial benefit: an immediate and guaranteed benefit that also provides a bridge to support an employee while seeking alternative employment. -Job security: an employer would be less likely to terminate an employee for an insignificant reason if there is a financial cost tied to such a decision.

Application of Contract Law

-For an agreement to be a legally enforceable contract, both parties must receive consideration. -Consideration is a benefit that is derived from the agreement that the parties would not otherwise receive. -An employee may receive consideration in the form of a financial benefit. -An employer may receive consideration in the form of an employee's agreement not to challenge the termination.

Limitations on Termination Rights: Implied Contract

-Implied Contract: contractual obligation that may arise based on an employer's conduct or statement. -A court may find that an employer's statement or conduct created a contractual obligation, depending upon the nature of that conduct, even if that result was not intended. -An employer who wants to terminate an at-will employee for a reason that does not conflict with another law or does not fit into one of the previous exceptions may still be subject to other restrictions. -If an employer engages in conduct that suggests its intention was to provide the individual with some degree of job security, an implied contract may exist.

Applicability of the Just-Cause Standard: Overview

-Individual employment contracts -Collective bargaining agreements -State laws -Judicial imposition based on principle -Judicial imposition based on employer statements or conduct: -Verbal statements -Company handbooks -Termination language -Probationary periods and progressive discipline -Voluntary use of just-cause standard

Just-Cause Standard: Overview

-Just cause: a broad standard that might be used to determine the appropriateness of an employer's decision to end an employment relationship. The obligation to adhere to the just-cause standard may arise because: -The employer intentionally agrees to adhere to it, -The standard is judicially or legislatively imposed, or -The employer's conduct suggests this was the intended result.

Layoffs: Overview

-Layoff process: ending an employment relationship, usually due to budget restraints, initiated by an employer due to a business need to reduce the size of its staff. -Selecting impacted employees -Providing notice and notice pay -Offering severance -Calculating the benefit -Using release agreements -Notifying employees of layoff -Layoffs assume the parties have not entered into an agreement that restricts the employer's right to lay off the employee.

Constructive Discharge

-Legal theory whereby an employer would be subject to liability for wrongful termination based upon making an employee's working conditions so intolerable that it would compel a reasonable employee to resign -Courts require an employee to show that a reasonable person would not have agreed to continue to work under the working conditions. -A resignation that is tendered to escape intolerable working conditions may be the basis of a claim against an employer for wrongful termination. -Sometimes there is a question whether an employee's decision to leave was truly voluntary, or whether employer conduct compelled the employee to leave her position against her will. -This is sometimes referred to as a forced resignation. -Most successful constructive discharge cases involve significant changes to job responsibilities, or those that dramatically alter the working conditions under which the tasks are performed.

Rules Should Be Uniformly Applied

-Look to whether there was selective enforcement of the rule: inconsistent enforcement of a workplace rule, which could undermine an employer's position that the behavior supports a just cause termination. -Selective enforcement could result in a discrimination claim if based upon an individual's membership in a protected class. -Does not mean employers are required to respond to the same misconduct in the same way. -Employers should consider mitigating factors: circumstances that may warrant more lenient forms of discipline for similar misconduct. -Even if after an investigation, an employer determines the employee engaged in the misconduct, the just-cause termination might still be challenged if other employees engaged in similar behavior and were not subject to the same level of discipline.

Natural Conclusion to the Employment Relationship

-Many employment relationships end absent any dispute or ill will: -Length of time: parties may agree to a specific term of employment, at which point the employment relationship comes to a natural and mutually-agreed upon end. -Project-based employment relationship: length of employment may be based on how long it will take for a project to be completed.

Employment at Will: Overview

-Most individuals are employees at will. -Employers retain the right to terminate at-will employees: for any reason at any time, for good cause, bad cause, or no cause, with or without notice.

Judicial Modifications: Public Policy Exception

-Most states prohibit the termination of at-will employees for reasons that conflict with a clear mandate of public policy. -Public policy exception: limitation on employer termination rights under state law that could prohibit the termination of an at-will employee for conduct society wants to encourage. -No precise definition -Broad categories of accepted conduct that fit within the scope of the exception. -Exception not universally accepted.

References

-No legal obligation on an employer to provide references. -Many employers will provide only basic information about former employees, such as dates of employment and job titles. -Potential liability for negligent referral. -Once a reference is provided, it must be complete and cannot withhold negative information that could present a risk to others. -Potential liability under Title VII. -Should have a uniform and nondiscriminatory policy for providing references. -Informal reference checks can be problematic. -A reference request might ask for the verification of an individual's dates of employment, salary, or title. -The prospective employer might also ask a former employer about an applicant's job performance, skills, attendance record, or personality to assess whether the person would be a match for the position the company is seeking to fill.

Examination of whether an employee's misconduct rises to the level of just cause:

-Notice that the behavior was impermissible includes: verbal notice, written notice, posting of the rule, providing assistance to comply with the rule, progressive discipline, employer conduct that undermines the rule. -Reasonableness of the rule. -Investigation -Uniform application of the rule -Appropriateness of the penalty -With regards to notice of impermissible behavior, employers should not assume that employees will share their views about what constitutes acceptable workplace behavior. -Instead, they should clearly communicate their workplace expectations along with the consequences of failing to meet them. -Some courts impose a reasonable person standard and look to whether the conduct is something that a reasonable person should know would not be tolerated. -Most employers expend efforts to ensure employees are on notice of the rules and consequences of non-compliance. -It is simply easier to present evidence that an employer placed an employee on notice of a rule than to litigate whether the conduct warrants an exception to the notice requirement. -The burden will be on the employer to show notice was provided.

Layoffs: Providing Notice

-Notice: refers to how far in advance an employee is told that their employment will end. -Notice pay is offered in lieu of notice, and is a payment of an individual's salary for the period of time the employee would ordinarily continue to work after being informed his employment would end. -If an employee receives notice pay in lieu of notice, he will be relieved of job responsibilities during this period. -Generally offered to provide financial support during the time the former employee can dedicate to their job search. -Generally, employers provide laid-off employees with some type of notice of the anticipated date of the end of their employment as well as a financial payment.

Types of Restrictive Covenants: Non-solicitation agreement

-Prevents a former employee from recruiting the employees of a former employer or approaching clients of a former employer for business.

Judicial Modifications: Promissory Estoppel

-Promissory estoppel: legal theory that a promise should be enforced if an individual reasonably relied on the promise and injustice can be avoided only by such enforcement. -This detrimental reliance theory is an exception to the at-will doctrine and allows an employee to challenge a termination decision even in the presence of broad termination rights. -Provided applicable state laws recognizes this cause of action.

What constitutes Just Cause?

-Question of whether or not the offensive misconduct would constitute just cause for a termination will depend on a fact-specific examination of the circumstances leading up to a termination decision. -Depends on the nature of the job and the nature of the offending behavior. -Once it is determined that an employer will apply the just-cause standard to terminations, the next question is how the standard is applied.

Benefits of Severance to Employers

-Recruit and retain qualified employees - can be used as a recruitment tool. -Goodwill - helps enhance employer's reputation among workforce and community. -Avoid litigation - when conditioned upon the signing of a release agreement, a severance package can help reduce or avoid litigation costs.

Severance

-Refers to the benefit an employer might offer a terminated employee in exchange for the signing of an agreement that the departing employee will not challenge the termination or file any claims arising from his employment. -Usually refers to a financial payment but it could be a more extensive exit package that includes noneconomic benefits. -Helps provide for a smooth transition in the ending of the employment relationship. -To limit potential risks on departure from the employment relationship, some employers provide terminated employees with either a financial benefit, a nonecomonic benefit, or both, often conditioned on their signing a release that would limit their rights to assert certain claims. -Noneconomic benefits could include things such as access to outplacement services, training, resume critique, and access to interviewing skills workshops.

Example of Protected Behaviors Within Public Policy Exception

-Refusing to violate a statute -Performing a statutory obligation -Exercising a statutory right or privilege -Reporting an alleged violation of a statute -Public health and safety

Types of Restrictive Covenants: Non-disparagement clause

-Restrictive covenant prohibiting former employees from publicly ridiculing or vilifying a former employer, the other individuals who work at the company, or the company's products. -In some instances, a non-disparagement clause imposes mutual obligations on the both parties.

Types of Restrictive Covenants: Non-compete clause

-Seeks to limit the employers for whom an individual can work after an employment relationship ends. -Non-compete clauses are generally disfavored and subject to significant judicial scrutiny because they restrict the rights of employees to work in the field in which they are trained.

Layoffs: Offering Severance

-Severance is a monetary benefit provided to a terminated employee, usually in exchange for an agreement that the decision to terminate the employment relationship will not be challenged. -The calculation of a severance payment is usually based on a formula that provides a certain number of weeks' salary for each year of service completed by the impacted employee. -Employers can minimize the potential for the filing of workplace claims in response to layoff decisions by conditioning the payment of this severance benefit on the signing of a release document. -Like all other terms and conditions of employment, any severance policy must be applied in a uniform and nondiscriminatory manner. -Pursuant to the terms of the release, laid off employees would waive their legal rights to file certain claims against their employer in exchange for the economic and noneconomic elements of an exit package.

Limitations on Termination Rights: Judicial Modifications

-Some restrictions on termination rights have developed as courts work to balance the right of employers to select their workforce and the rights of employees to sustain their employment. -These exceptions are judicially created and depend on the state laws that govern a particular employment relationship.

Limitations on Restrictive Covenants

-State laws regulate restrictive covenants, with some states completely prohibiting them. -Most courts will only enforce restrictive covenants if: 1. Their purpose is to protect a narrowly tailored legitimate business interest; 2. They are supported by consideration; and 3. They are reasonable in scope.

Unemployment Benefits

-Terminated employees may also be entitled to unemployment benefits, which refers to money paid to eligible individuals who lose their employment through no fault of their own (as defined by state law) -Purpose is to provide qualified individuals with temporary financial assistance -Unemployment benefits are generally paid through a tax on employers -Eligibility and the amount and length of payments of unemployment benefits are governed by state law -Ultimate decision is determined by the state administrators of the unemployment program -Employer can contest an individual's application for unemployment benefits

The WARN Act: Obligation to Provide 60-day Written Notice

-The cornerstone of the federal WARN Act relates to the obligations of an employer to notify its employees that they will be laid off. -The intent of the WARN Act is not to alter any existing notification period. -The 60-day notification period required under the Act may run concurrently with any other notification period that might apply. -Employers of unionized employees have additional notice and financial obligations pursuant to the terms of an existing bargaining agreement. -Regulations require WARN notifications to include the date of the layoff or plant closing, as well as the name and contact information of the company representative to be contacted for additional information.

Resignation

-The ending of an employment relationship initiated by the employee. -While there is no federal law requiring employees to provide notice of their intent to resign, the standard business practice is to provide an employer with at least two weeks notice before leaving a position. -Employees should put notice in writing. -Notice period provides employer with time to look for a replacement. -At-will employees retain the reciprocal right to end their employment relationship for any reason at any time.

For an Investigation to survive a legal challenge the following factors should be considered:

-Timeliness: employer should conduct investigation as soon as possible after incident occurs in order to increase accuracy of information and should have written documentation of key pieces of evidence. -Suspension pending investigation: employer may impose a paid or unpaid leave on an employee accused of misconduct until a determination is made as to whether the individual engaged in the misconduct and, if so, what level of discipline is appropriate. -Proof: may include direct and circumstantial evidence from different sources. -Due process: provides the employee with the opportunity to present his recollection of events and to be free from threats or harassment. -Interview of witnesses -Physical evidence should be preserved

Other Potential Sources of Post-Employment Liability

-Tortious interference with contractual relationships:cause of action relating to employer's conduct intended to unlawfully block an individual from forming a contract with a third party or inducing a third party not to abide by its terms. -Post-employment retaliation: claims that relate to the imposition of an adverse employment action in response to a former employee's assertion of a legal right. An employee's right to file retaliation claims continue even after the employment relationship ends.

Affirmative Defenses that can be Asserted to the Filing of a Defamation Claim

-Truth: also prevents imposition of liability for expression of an opinion. -Absolute privilege: protects an individual from defamation claim based on the role the person is acting in when the statement is made, i.e., witness in a trial. -Qualified privilege: protects an individual acting in a certain role, provided there is no malicious intent. -Consent: if an employee agrees to the communication of a defamatory statement.

In Assessing Reasonableness of the Scope of a Restrictive Covenant, Courts Look to the Following Factors:

-Type of conduct that is prohibited: prohibit conduct only to the extent necessary to protect the legitimate business interest. -Geographic scope of the restriction: should only prohibit conduct in the specific geographic location that is necessary to protect the employer's interests. -Duration for the restriction: depends on the nature of the employer's business and the business interest the covenant is designed to address.

Just-Cause Standard and Collective Bargaining Agreements

-Unionized employees are not employees at will. -The right of an employer to terminate unionized employees is established through a collective bargaining agreement (a negotiated contract). -An employer's termination rights will likely be much more restrictive than the termination rights provided for under the at-will doctrine. -Generally includes basic language indicating that employees working under the collective bargaining agreement are subject to a just-cause standard.

Categories of Behavior That May Constitute Just Cause

-Unsatisfactory Job Performance: an employee's failure to satisfactorily perform the duties associated with the position. -Serious Misconduct: certain categories of conduct that will, standing alone, be sufficient to establish the just cause necessary to support a termination (such as workplace violence). -There is no precise list of misconduct that will provide a legally sound basis for termination under the just-cause standard.

The Worker Adjustment and Retraining Notification (WARN) Act

-WARN Act: federal law that requires large business employers (generally those with 100 or more employees) to provide employees with 60 days' advance written notice of covered plant closings or mass layoffs. -The WARN Act is enforced by the Department of Labor (DOL) -Some states provide even greater protections for laid-off employees by imposing obligations on smaller employers and providing more extensive notice requirements. -The intent of the WARN Act is to balance the needs of the employer with the needs of the employees to have time to seek alternative employment.

Layoffs: Notifying Employees

-Whether an employer is obligated to provide more notice than that dictated by its company policy will depend on the number of employees affected as well as the state in which the individuals are employed. -An employer's flexibility with regard to notification requirements is governed by federal and state law.

Statutory Limitations: Whistleblower Protections

-Whistleblower laws: protect individuals from retaliation for revealing information that shows there is mismanagement, corruption, or illegal behavior. -Cannot terminate an employee who has initiated an investigation. -Employee cannot be terminated in retaliation for raising or participating in a claim under Title VII or the FLSA. -Whistleblowers who reveal information related to unsafe working conditions are protected by the Occupational Safety and Health Act (OSHA).

Termination Rights Pursuant to Contractual Obligations: Promissory Estoppel

A promissory estoppel claim might be available under state law if the employee seeking to enforce a promise can show: 1. The employer made a promise; 2. It was reasonable for the employee to rely on the promise; 3. The employer would expect the employee to rely on the promise; 4. The employee acted in reliance on the promise; and 5. The employee would suffer significant harm if the promise was not enforced. -A promissory estoppel claim is based on the idea that if an employer makes an individual a promise with respect to a job, and the employee relies on that promise, then the promise should be enforced if injustice can be avoided only by the enforcement of it.

Termination Rights Pursuant to Contractual Obligations

A significant issue within employment contracts is the retention of the right to terminate the relationship prior to the end of the agreed-on terms: -Fact-specific termination rights -Duty of good faith and fair dealing -Termination language is often subject to a duty of good faith and fair dealing, which is the obligation on the parties to not engage in any conduct that will destroy or injure the rights of the other. -Promissory estoppel/detrimental reliance -Terminated employee asserts her right to some type of enhanced job security because an employer made a promise suggesting this result. -While most individuals are at-will employees, some employment relationships are governed by employment contracts.

Collective Bargaining Agreements: Grievance and Arbitration Process

Collective Bargaining Agreements generally establish a grievance and arbitration process: -A method for unionized employees to challenge employer's administration of a provision in the collective bargaining agreement including exercising any termination rights. -This process is used by the union to challenge an employer's decision to terminate a unionized employee for a reason that did not rise up to the level of just cause.

Key Component in Creating a Severance Policy: Eligible Employees

Employer may limit benefit to employees who have at least one year of service, or are outside of the probationary period, or who have been terminated for specific reasons.

Notice: Employer Assistance to Comply with the Rules

Employers can also show that employees were on notice of workplace rules and expectations if they provided them with assistance in complying with the rules: -Training related to particular behavior or rule in question. -Financial assistance provided to employee to assist in compliance with a certain rule or requirement. -Alteration of working conditions. -Employers should utilize a number of methods to communicate notice of workplace rules to decrease the likelihood a decision maker will determine that an employee was unaware of the rule and therefore could not be disciplined or terminated for failure to adhere to it. -Employers should consider how they would provide evidence that the information was communicated in the event of a legal challenge.

Release Must Be a Knowing and Voluntary Waiver

Looking at the totality of the circumstances to determine whether an agreement is "knowing and voluntary," courts consider the following factors: -Whether the language in the release was clear and specific; -Whether the release was induced by fraud or improper conduct by the employer; -Whether the departing employee had time to review the terms and consult with an attorney; and -Whether consideration was received or whether the employee had a preexisting right to the severance benefit. -There is no blanket requirement that the waiver in the release agreement refer to a specific statute under which the employee waives her right to file a claim. -Most courts look to the totality of the circumstances surrounding the negotiation of the release agreement to determine whether it was a "knowing and voluntary" waiver of the individual rights. -The Age Discrimination in Employment Act (ADEA) imposes additional obligations upon employers attempting to secure a waiver intended to prevent employees who are 40 years of age or older from filing an age discrimination claim, as such, the ADEA must be specifically referenced in any waiver. -Each state's laws should be researched to determine how to structure a release that will be most likely to withstand judicial scrutiny and prevent a terminated employee from asserting a claim for wrongful termination or a claim arising out of another term or condition of employment.

Exemption to Written Notice

No notice is required: -If the closing of a worksite is due to the closing of a temporary facility or the completion of a particular project. This exception applies only if the employees were aware of the temporary nature of their work at the time of their hiring. -If the employees do not expect continued employment, i.e., employees who voluntarily quit, are terminated, or are on strike. -If the employees work for the federal, state, or local government. -This exception to the written notice requirement of the WARN Act represents another reason why it is critical for employers to clarify the terms and conditions of employment for employees at the time they are hired.

Situations That Trigger Notification Obligations under the WARN Act

Plant Closing: refers to the shutting down of a single worksite that results in a job loss for 50 or more employees (excluding part-time employees) for any 30-day period or longer. Mass Layoff: Relates to a loss of employment for at least 30 days at a single site for: -500 or more employees (excluding part-time employees) -50-499 employees (excluding any part-time employees) if the latter make up at least 33% of the employer's active workforce. -An employer's business decision that would result in job losses or a break in employment that falls within these parameters will trigger notice obligations for the employer, and a failure to comply with these obligations could result in significant financial liability.

Just-Cause Standard and State Laws

Some states mandate the imposition of a just-cause standard for all terminations, regardless of whether the employment is at will or whether some other termination standard was negotiated by the parties.

Judicial Modifications: Promissory Estoppel Requirements

To support a promissory estoppel claim, an individual must show that: 1. the employer made a promise 2. it was reasonable for the employee to rely on the promise 3. the employee acted in reliance on the promise; and 4. the employee would suffer significant harm if the promise was not enforced.

Release Must Comply with the Older Workers Benefit Protection Act (OWBPA)

Under the OWBPA, in order for a release to be a valid waiver of ADEA claims, a release must: -Be in writing and understandable; -Specifically reference the Age Discrimination in Employment Act (ADEA); -Waive only past claims and have no impact on claims that might arise in the future; -Be in exchange for valuable consideration; -Include a written provision suggesting that the affected employee consult an attorney prior to signing the waiver; -Provide the employee with at least 21 days to review the agreement; and -Provide the employee with a seven-day period after executing agreement during which the individual retains the right to revoke it. -The OWBPA requires employers to take extra measures to ensure that a release signed by an older employee that is intended to prevent the filing of a claim for age discrimination is knowing and voluntary. -The Supreme Court has determined if a release agreement is missing on of these elements, it will not constitute a voluntary and knowing waiver of an individual's rights and will therefore not block the terminated individual's right to file an age discrimination claim under the ADEA.