Legal Notes: You’ve Been Fired. Now What?

You think things are going well with your employer and just like that, you're informed that you're terminated. Sometimes, terminations are handled amicably with a mutually acceptable severance. Often, there's a good deal of stress and conflict with terminations. In this article, I'll go over some of the rights that you have as an employee and I'll provide guidance on what are best practices for employers.

DISCLAIMER: This and all Legal Notes columns should not be construed as specific legal advice. Although I'm a lawyer, I'm not your lawyer. The column presented here is for informational purposes only. Whenever you're seeking legal advice, your best course of action is to always seek advice from an experienced attorney licensed in your jurisdiction.

Your Employment is Either At-Will or Contractual

In the absence of an employment contract, you're an at-will employee. An at-will employee can be fired for any lawful reason, without cause and without notice. Many employers believe that at-will employment means that an employee can be fired for any reason whatsoever. That's not true. The reason must be lawful.

Many employers believe that at-will employment means that an employee can be fired for any reason whatsoever. That's not true. The reason must be lawful.

If your employment arises through a contract, the contract stipulates the basis upon which you can be terminated. It's important to not confuse an employment agreement with an employment contract. An employment agreement is typically a set of terms and conditions incident to employment. One of those terms and conditions is to state specifically that you are an at-will employee. Another common term is that the employer can terminate you for cause or without cause with some or no notice at all. You may be wondering what the purpose of such an agreement is. Typically, with employment agreements, a new employee is subject to confidentiality and certain terms that apply if the employee resigns voluntarily. Such terms include non-compete covenants, a requirement to not solicit employees or customers, and non-disparagement of the employer. Regardless of how you're terminated, other terms usually include the requirement to return company equipment and materials.

In most cases in the technology industry, a developer is an at-will employee, even in cases where the individual is classified as a contractor and receives an IRS form 1099 at the end of the year. If your employment is subject to a contract such that at-will status is either disclaimed or not mentioned at all, in those cases, your termination may result in a breach of contract scenario. It can be a rather complicated question to answer whether you are at-will or a contract employee. For those reasons, it's important that you consult a lawyer. If you have a contract, your remedies will likely be established through the contract. For example, if you are terminated without cause, the future value of payments under the contract may be a good measure of damages.

If You're an At-Will Employee, Do You Have Recourse?

The answer is: It depends. It boils down to these main items:

• Is the reason you're fired illegal under Title VII?
• Do you have a disability as defined under the Americans with Disabilities Act (ADA)?
• Are you taking a benefit under the Family Medical Leave Act (FMLA)?
• Are you over the age of 40?
• If your employer claims that your termination is based on performance, does your employer have a good faith basis for that claim?
• Are there any violations of specific local and state law?

Title VII

Title VII is codified under the Civils Rights Act of 1964 and applies to any employer with 15 or more employees that work on a particular day for at least 20 or more calendar weeks in the current or preceding calendar year (https://www.law.cornell.edu/uscode/text/42/2000e). Title VII is designed to protect against discrimination on the basis of race, color, religion, sex or national origin. The principle agency that enforces Title VII is the Equal Employment Opportunity Commission (EEOC).

In addition, there are many states with agencies that have work-sharing agreements with the EEOC that take the lead on claims. For example, in Pennsylvania, there's the Human Relations Commission. Typically, such agencies have user-friendly sites with complaint forms that are designed for individuals who may not be represented by lawyers.

One of the biggest areas of Title VII litigation is in LGBTQ cases. For example, the EEOC has held that the following are actionable claims: failing to hire an applicant because she is a transgender woman and firing a man because he plans to undergo sex reassignment surgery.

As to religion, there are numerous cases related to religious garb and clothing. For example, can a Muslim woman wear a hajib or headscarf? The answer is: It depends. When confronted with a claim, the employer can present arguments where the presence of such garb or clothing interferes with the essential job functions and/or presents a safety issue.

If you feel that you are being discriminated against under Title VII, refer to the EEOC or your state agency. Note that these cases, under the best of circumstances, can be difficult to win. The role of the EEOC or state agency is to press the claim on your behalf.

Americans with Disabilities Act (ADA)

The ADA is designed to protect individuals against discrimination because of a disability. You may be familiar with the phrase “ADA Complaint.” In many public accommodations, you see wheelchair ramps and elevators. The ADA also applies in the employment context. In the employment context, covered under Title I, an employer (covered entity) must provide reasonable accommodations to job applicants and employees with disabilities.

When cases like this are litigated, there are two important aspects to the case. First, does the applicant or employee have a recognized disability under the ADA? If the answer is no, that ends the matter. If the answer is yes, then the question turns to whether the requested accommodations are reasonable. It's not as though an employer is required to do anything to accommodate the applicant or employee. Rather, all the employer must do is provide reasonable accommodations. What is reasonable? There are cases on the books that help to define this. Ultimately, it's a question determined by the specific circumstances.

The EEOC also handles ADA claims. Under the ADA, you may end up taking a leave of absence based on disability. In these cases, your benefits stay in place and you end up getting a portion of your salary. Whether or not you can take leave depends on whether that is deemed to be a reasonable accommodation. In some cases, upon return, you may end up returning to your job. In other cases, you may be reassigned. Consult the EEOC site for more guidance: https://www.eeoc.gov/eeoc/publications/ada-leave.cfm.

Retaliation

One thing you may wonder about is bad blood. What if you file an ADA claim, lose, and in the process, the employer retaliates against you. Filing a Title VII, ADA, or any other claim protected by the EEOC is known as a protected activity. It's illegal for any employer to retaliate against an individual for asserting their rights under the law.

Family Medical Leave Act (FMLA)

The FMLA and the ADA are closely related. Both involve the employee taking leave. With the ADA, it's due to a disability and the employee gets part of their salary and all of their health benefits. Upon returning to work, you may or may not end up having the same job. With the FMLA, like the ADA, you take leave. Unlike the ADA, with FMLA, you are guaranteed to get your job back. Like the ADA, with the FMLA, your health benefits stay in place. Unlike the ADA, with the FMLA, your time off may be unpaid.

The two types of acts are slightly different. The ADA is concerned with some disability the employee has. With the FMLA, the time off may be due to the care of a new child or an elderly parent.

It's important to note that ADA is about protecting against discrimination. The FMLA is about the right of the employee to take leave - and protect their job in the process. If granted FMLA, it's illegal for an employer to deny the position to the employee upon return. And like the ADA and Title VII, there are anti-retaliation statutes for those who avail themselves of this benefit.

Age Discrimination in Employment Act (ADEA)

If you're 40 or over, you're in the protected class that the ADEA covers. This means that it's illegal for an employer to discriminate against you because of your age. The ADEA applies to both employees and job applicants. To have a claim under the ADEA for an employee to make out a case for age discrimination, the employee must show:

• That the employee or applicant is within the protected class
• That the employee or applicant was qualified to perform his or her job
• That the employee or applicant suffered an adverse employment action
• That persons under 40 were not treated the same as the employee or applicant

The other federal statutes discussed this far have similar kinds of criteria for making out a prima facie case. A prima facie case is the ability to meet the minimum burden to bring a case to court. In the event that you make a claim but don't have a prima facie case, your case can be dismissed and you don't get your day in court!

The ADEA, like Title VII, and the ADA, etc., supports two basic types of claims:

• Disparate treatment
• Disparate impact

In a disparate treatment claim, you allege discriminatory intent. In other words, the reason for the discriminatory behavior is because of your age. This is often difficult, if not practically impossible to prove. That's not to say it doesn't happen. Still, it's rare to see. More common is the disparate impact case.

In a disparate impact case, the affected group happens to be overwhelmingly made up of the protected class. For example, if a company let 10 employees go and nine of the 10 are over 40 and there are next to no more 40+ year-olds left at the company, this would be an ADEA claim based on disparate impact.

Bad Performance

Sometimes, your employer informs you that performance is the reason for your termination. This is often a shock because you may not have had any forewarning of any performance problems. This is where your employee handbook and your company's established performance management system comes into play. Any well-run company has an established annual performance evaluation process and follows it to the letter. Annually, you are reviewed and, if necessary, put on a corrective action plan. The corrective action plan may have been preceded by an oral and/or written warning. Such corrective action plans document what the performance issues are and the plan to improve. Most importantly, you, the employee, sign off to acknowledge the plan. In the event that the corrective action plan is not successfully completed; the ramifications may include demotion or termination. Assuming that the performance allegations have merit, there's no basis to dispute your termination.

What happens when the allegations are not true or when the employer fails to follow its own processes as codified in the employee handbook? Sadly, too often, employers who want to get rid of an employee begin to manufacture a bad performance claim as a pretext for some other reason. The typical sequence is that you have many years of good performance and have been steadily promoted. Then out of the blue, you get a talking to about performance without any warning and not much of any specifics about what's wrong. In some cases, you might be fired then. In other cases, a few weeks or months may go by and then you are fired, all without following the stated processes. Do you have recourse? Yes, you do.

These situations fall into two broad categories. The first is the innocent but incompetent employer. These are the ones that have policies on the books, but don't follow them because of poor management. Perhaps there are bona-fide performance issues. Because of poor or non-existent documentation, the employer can't substantiate the claim.

The second category includes those employers who have another reason for termination that may be illegal. For example, a violation of Title VII, ADA, FMLA, or ADEA. These employers are under the misguided belief that because you are an at-will employee, to steer clear of federal law, they can just fabricate a performance-based pretext. In most cases, employers get away with it because they throw a few weeks of severance at the terminated employee and then get the employee to release the company from any liability. These kinds of separation agreements also have strict non-disclosure and non-disparagement provisions. This is where the tort of defamation is your friend!

Defamation

Defamation occurs when one person takes an action that ends up damaging the reputation of another. Defamation is part of tort law. Torts are wrongful acts. The most common tort is negligence. Defamation comes in two flavors: libel and slander. Libel is when the defamatory words are written. Slander is when the defamatory words are spoken. In this context, if all your employer did was tell you and others that your performance was bad, that's slander. If, on the other hand, it was published in an email or some other similar medium, that's libel. In this context, the distinction really doesn't matter.

Traditionally, to make a defamation claim, a plaintiff has to show the following:

• The plaintiff must prove that the defendant made a false and defamatory statement concerning the plaintiff.
• The plaintiff must prove that the defendant made an unprivileged publication to a third party.
• The plaintiff must prove that the publisher acted at least negligently in publishing the communication.
• In certain cases, the plaintiff must prove special damages.

In some cases, the defamatory statements are so damaging that they're defamatory “on their face.” This is known as defamation per se. One such way to show defamation per se is to say that a person was involved in behavior incompatible with the proper conduct of his business, trade, or profession. In other words, you don't perform your job well! With defamation per se, you don't need to prove damages. Because it's your job, damages are assumed.

It's important to note that not only can a company be liable for such defamatory conduct, individuals within the company can be personally liable as well. For example, your boss and anybody else who publishes the defamatory content can be personally liable.

Truth is an absolute defense to a defamation claim. Therefore, it's important for companies to follow documented policies and procedures when claiming poor performance. When they don't, it's important for you, the terminated employee, to understand what your rights are.

Conclusion

If you're terminated, take some time to process what's happened. Getting fired is a major life change event that's filled with stress. When this happens to you, it's important to listen carefully to what your employer is telling you. For example, taking contemporaneous notes is a good practice so that you can use them to refresh your recollection later. You may be presented with a few documents. The first is information on COBRA: Consolidated Omnibus Budget Reconciliation Act. If you have health benefits, COBRA outlines the process and procedures to retain those benefits. (Costs to be borne by you). Under ERISA: Employment Retirement Income Security Act of 1975, there are notice requirements about things such as your 401K plan as to how to roll over, etc.

You may also be asked to sign an agreement that releases the company from liability. With any agreement, you must be afforded some level of consideration (severance pay). You should never sign the agreement immediately upon being confronted with termination. You should consult an attorney. Even if you did sign, under the ADEA, there are statutorily mandated consideration periods. If it's a group lay-off, the employer must offer 45 days to consider for anyone laid off, regardless of age. If only one person is laid off, assuming they are over 40, they must be given 21 days to consider. If the employee is under 40, there is no set consideration period. In addition, if the agreement contains ADEA related provisions, the employee gets at least a seven-day revocation period.

Take note of anything in your situation where you may qualify as having a recognized disability. Also, take note of any retaliation you may be suffering because of inquiring about relief under Title VII, the ADA, FMLA, ADEA, etc. If your termination is based on an allegation of poor performance, take note of how that process was carried out. In many jurisdictions, you are entitled to inspect your personnel file. In the event that your employer can't substantiate a performance claim, it may open the door to a defamation claim. By working with a lawyer, you can get the necessary counsel on how to negotiate a better separation agreement, whether it's with respect to financial terms or other duties and obligations.

If you find yourself in this position, keep your chin up. Although it may be stressful in the short term, it's not the end of the world.