Protecting Yourself from the Loss of Your Job
There are two ways individuals can be classified when referring to employment: “at–will” or “contract.” The “at–will employee” doctrine holds that the employees without a contract can have their employment terminated by either party, at any time, for any reason, with or without notice, provided there is not a written contract for employment. The employer does not have to have good cause to terminate employment. On the other hand, an individual who has an employment contract has an agreement with the employer. The employment contract is a voluntary, deliberate, and legally enforceable document that binds both employer and employee to the contract. Unless the employee signed an employment contract that states the employee cannot be terminated without good cause, it is assumed that the employee is an “at–will employee.”
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Many individuals would be surprised to learn that they are an “at–will employee.” Most states have laws establishing employment as “at–will.” Although “at–will” employees can have their employment terminated for any reason, those reasons must be in accordance with state and federal law. Likewise, an employee is free to leave a job at any time for any reason or no reason with no adverse legal consequences. There are limitations on terminating an employee and employees who have been terminated are granted certain rights under state and federal law. For example, an employer cannot terminate an employee based on the employee’s race, color, religion, sex (including gender identity, sexual orientation, and pregnancy), national origin, age (40 or older), disability and genetic information.
It’s important to know these rights and limitations and to understand the various methods of insuring yourself if you lose your job.
Wrongful Termination or Discharge
Even in an “at-will” employment law state, you may be able to seek damages for wrongful–termination, based on the circumstances of your discharge.
Anti–Discrimination Laws. Generally, you cannot be fired in violation of law or of public policy. Your employer cannot terminate you in violation of any federal laws prohibiting discrimination, including the provisions of the Age Discrimination in Employment Act (ADEA), the Equal Pay Act, the Americans With Disabilities Act (ADA), or any other state or federal law prohibiting discrimination in employment. For example, if an employee participates in an investigation regarding discrimination in their employer’s hiring practices, that employee cannot be terminated for doing so.
Whistleblower Retaliation Claims and Wrongful Termination. Although an employer may fire an employee for an array of reasons, taking adverse action against a worker who is engaged in certain protected activities can constitute unlawful retaliation and wrongful termination. An employee who reports a violation of the law by his or her employer is referred to as a “whistleblower“. Federal law protects these employees from retaliation for participating in protected activities, such as reporting unlawful activities or participating in an investigation into the practices of the employer. Some of the most commonly invoked federal protections can be found in the Civil Rights Act, the Age Discrimination in Employment Act, the Americans with Disabilities Act, and the Equal Pay Act. Additionally, the following Acts each contain protections for an employee who complains about safety or health hazards caused by an employer:
- The Clean Air Act (CAA);
- The Comprehensive Environmental Response, Compensation, and Liability Act;
- The Energy Reorganization Act (SDWA);
- The Safe Drinking Water Act (SDWA);
- The Toxic Substance Control Act; and
- The Water Pollution Control Act.
Retaliation for Failing to Perform Illegal Acts and Wrongful Termination. Similar to the whistleblower protections, employers may not demand employees to perform illegal acts. For example, if an employer knowingly requires workers to ignore safety regulations and subsequently fires the workers, there is a retaliation and wrongful discharge claim.
Depending on the laws of your state, you may be protected against employer retaliation in the event that you report the illegal or unethical act committed by your employer. For example, a school district that fires a teacher who blows the whistle on wasteful pending or unsafe school conditions cannot be fired as retaliation under whistleblower statutes protecting public employees.
Plaintiffs have successfully alleged that they have been wrongfully fired when the following facts or circumstances were involved:
- Jury duty;
- Active duty in the armed services;
- A whistleblower complaint;
- Time off under the Family and Medical Leave Act (FMLA);
- Inadequate notice under the Worker Adjustment and Retraining Notification Act;
- A breach of contract; and
- A violation of federal and/or state statutes forbidding employment discrimination.
Information to Save When You Have Been Fired
Regardless of whether you are seeking a new job voluntarily or because your employment was terminated, copies of the following documents will help you protect your future interests and employment potential:
- Termination Contract. If applicable, a copy of the termination or employment severance contract you signed. Try to refrain from signing one if you have questions that might be answered best by an attorney. You want to avoid unintentionally jeopardizing any of your future rights.
- Documentation of the circumstances under which you were fired. This includes who you spoke to, what they said, and any accompanying conduct by both parties. It is helpful to write emails to preserve a record; be sure to make copies of any relevant emails as well.
- Job Description. A written copy of your starting job description and an updated copy if it was modified before your departure.
- Departure Statement. A written and signed statement describing the reasons for your departure. This is important because it allows you to determine:
- whether you will be granted unemployment benefits;
- what future employers will be told about the reason for your departure;
- which employee benefits you may be entitled to upon leaving, including health care coverage, accrued employee leave, and funds deposited in a 401(k), pension or other program.
- Employee Handbook. A copy of the employee handbook and any relevant materials such as memos, brochures, orientation materials, or any written evaluations of your work. However, it is important to be extremely careful when taking documents from your employer, especially with regard to anything that is designated as confidential or for internal use only.
- Employment Contract. A copy of your employment contract, if applicable, previously signed and dated by both you and your employer. If you were given an employment contract upon accepting the job, the terms often will define the kind of reasons your employer can use to fire you. Some employment contracts leave the reasoning section open–ended and simply say that the employee can be fired “for cause,” while others mimic the relevant state law of firing. Typically, such a clause will be construed to mean that the employer needs a legitimate business reason to fire the employee. However, this varies from state to state.
- Non–Compete Covenant. A copy of any covenants not to compete. These include documents or contracts stating that you will not seek similar employment for a stated time period and will not compete in a specific manner for a set time period.
- Personnel Material. Copies of all materials in your personnel file that your employer will release to you. If allowed, and is not confidential or for internal use only, be sure to obtain documentation concerning:
- your paid wages,
- employee benefits,
- job evaluations,
- any signed statements made by your supervisors or co–workers,
- bonuses paid or promised.
- Memos and E–mails. Copies of any memos or e–mails sent to you or by you during your employment that your employer has not forbidden you to take under a claim of confidentiality. You may need an attorney to help you determine what documents you can and cannot take with you in this regard. Your goal is to protect yourself and have ample evidence to back up any of your future legal claims should your former employer try to deal unfairly with you.
- Work Journal. If you sense that something has gone awry in your relationship with your employer, it can also be helpful to keep a journal that records significant employment events. For example, document performance reviews, commendations, reprimands, salary changes, or even less formal comments of approval or disapproval. In any event, always record the date, time, and location as well as who was present at each event. Even if you do not wish to challenge the legality of the firing, you may need to show that you were fired for reasons that did not involve your misconduct, in which case, detailed documentation can be helpful.
State Labor Laws and Federal Government Protections
Federal law provides workers with basic rights upon termination:
- The right to continue health insurance under the COBRA insurance program. Under COBRA, you may pay the entire cost of your health insurance under your former employer’s plan for approximately 18 months. The Health Insurance Portability and Accountability Act allows you to purchase individual coverage if no group health coverage is available and you have exhausted COBRA or other continuation coverage.
- The right to receive any back pay still owed to you.
- The right to receive your last paycheck in a timely manner. Many states will let your employer wait to pay you until the next scheduled payday if you leave voluntarily. Earlier payment is possible when your employer terminates your employment for reasons other than gross misconduct.
- The right to receive certain 401(k) or pension funds owed or accrued. Federal law requires certain employers’ plans to pay retirement benefits no later than the time a participant reaches normal retirement age. But many plans, including 401(k) plans, allow earlier payments under certain circumstances.
You should look to your employment contract, employee handbook or state law to recover any accumulated sick leave, bonuses or vacation pay (assuming you are not a federal government employee with contractual rights). You might be able to negotiate a termination contract with your former employer that guarantees you some or all of your accrued benefits in exchange for a waiver of certain future rights. You may also have the right to apply for unemployment compensation.
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