In the worst of times -- and the best of times -- HR professionals are on the front lines of managing changes affecting recruiting and terminating employees. The vast array of federal and state regulations can make it easy to get lost in the labyrinth.
When difficult decisions are made to reduce a workforce, it is almost always up to HR to ensure compliance with the law by navigating the maze of federal and state statutes and regulations detailing termination procedures.
As business prospects improve and companies resume hiring, it again will be up to HR executives to take the lead to manage the hiring process and to establish fair employment practices. Attention to the details is a must when creating legally compliant termination and hiring procedures, especially for companies operating across state or, even, national borders.
It is often easy to get lost in the vast array of laws and regulations at both the federal and state levels. The information below can serve as useful guidance as you navigate the intricacies of terminating and hiring employees.
Question: Are there any state or federal rules that require employees be given a set number of days prior to being terminated?
Answer: Unless specified or implied by contract or collective-bargaining agreement, employment in the United States without a definite term is generally terminable "at-will," meaning that employers may terminate employees at any time for good reason, bad reason or no reason at all, provided that the reason is not unlawful. See, e.g., Woolley v. Hoffmann-La Roche, Inc., 99 N.J. 284 (1985); Murphy v. American Home Products Corp., 58 N.Y.2d 293 (1983).
While in most states, the employment-at-will doctrine has developed out of the common law, other states have codified these same principles. See, e.g., Ga. Code Ann. § 34-7-1 (2001) (Georgia).
Under the employment-at-will principle, employers typically need not provide prior notice to employees before terminating them. However, the common-law employment-at-will doctrine has gradually been eroded by a plethora of judicially or legislatively created limitations covering both public and private employers.
To begin, courts throughout the country have recognized that employers are free to contract around the at-will doctrine and will be bound by the terms of express agreements entered into with regard to notice due prior to termination. See Parker v. Crider Poultry Inc., 275 Ga. 361, 565 S.E.2d 797 (2002) (at-will employee could sue for breach of contract where employer agreed to give notice of termination and failed to do so); Vardi v. Mutual Life Ins. Co. of New York, 136 A.D.2d 453, 523 N.Y.S.2d 95 (1st Dep't 1988) (contract providing employee 30 days' notice before termination for cause was an "express limitation" on the employer's right to terminate); Pickell v. Arizona Components Co., 931 P.2d 1184 (Colo. 1997), as modified on denial of rehiring, (Mar. 10, 1997); Computerose, Inc. v. Minor, 692 S.W.2d 744 (Tex. App. Fort Worth 1985) (employee terminable at-will on provision of two weeks' notice).
But employers should be aware that courts may also find implied contracts in employee handbooks and other companywide communications, whether oral or written, that may alter at-will employment. See Frymire v. Ampex Corp., 61 F.3d 757 (10th Cir. 1995) (finding implied contract where termination policy included a provision for pay in lieu of notice and a schedule of minimum notice); Weiner v. McGraw-Hill, Inc., 57 N.Y.2d 458, 457 N.Y.S.2d 193 (1982).
Some courts have even imposed implied "reasonable notice" obligations upon employers based on past practice. See Malver v. Sheffield Indus., Inc., 462 So. 2d 567 (Fla. Dist. Ct. App. 3d Dist. 1985); Perri v. Byrd, 436 So. 2d 359 (Fla. Dist. Ct. App. 1st Dist. 1983) (finding two weeks' notice reasonable); see also Emerson v. Ackerman, 233 Mass. 249, 252, 124 N.E. 17 (1919) (contract to pay commissions for indefinite term could be terminated "upon reasonable notice"); Phoenix Spring Bev. Co. v. Harvard Brewing Co., 312 Mass. 501, 506, 45 N.E.2d 473 (1942) (construing at-will agreement to be terminable "upon reasonable notice").
An employee terminated without proper notice can maintain a suit for back pay and other accrued benefits. See Bryant v. West Alabama Health Services, Inc., 669 So. 2d 941 (Ala. Civ. App. 1995) (employer liable where failed to comply with manual providing for two weeks' notice in the event of termination).
To the point, however, federal and state legislatures have further eroded traditional at-will employment by creating laws and regulations that require notice before terminating employees in a variety of contexts.
The most comprehensive pre-termination notice law is the federal Worker Adjustment and Retraining Notification Act (WARN Act), which applies to employers with 100 or more full-time employees and requires that employees receive 60 days' advance notice of a plant closing or mass layoff. 29 U.S.C. §2101, et seq.
When involved in such widescale reductions-in-force, employers not protected by one of the WARN Act's exceptions must be sure to comply with the advance notice provisions or risk potential lawsuits by aggrieved employees for up to 60 days' worth of back pay and accrued benefits. For a thorough review of the WARN Act, please see my earlier posting on April 20, 2009 entitled "The Law is Not Enough."
While most states have chosen to rely on the federal WARN Act and have not created their own legislation, a number of states have enacted their own versions. These so-called "mini" WARN Acts generally provide more coverage and greater protections (including requiring notice prior to termination) above and beyond the requirements of the federal WARN Act. See Cal. Lab. Code §§ 1400-1408 (California); Haw. Rev. Stat. § 394B (Hawaii); 820 Ill. Comp. Stat. Ann. 65/1 et seq. (Illinois) (broader definition of "mass layoff" than the federal WARN Act); 26 Me. Rev. Stat. Ann. § 625-B (Maine); Mass. Gen. Laws Ann. Ch. 151A § 71A to G and Ch. 149 § 182 (Massachusetts); Minn. Stat. Ann. §§ 181.93, 116L.976 (Minnesota); N.J.S.A. 12:17-3.5 and 34:21-1 et seq. (New Jersey); Pa. Code §§ 9-1501 to 9-1504 (2006) (Pennsylvania); Wis. Stat. Ann. § 109.07, 109.075 (Wisconsin).
Such laws have been found not to be pre-empted by the WARN Act. Thus, any state or local law that is more restrictive than WARN must also be followed in connection with a plant closing or mass layoff. The 60-day notice period under WARN runs concurrently with any state or local notice period.
Beyond advance-notice protections set forth in the federal and state WARN Acts, only a handful of states have enacted laws requiring notice for garden-variety terminations and small-scale layoffs. For example, in California, which has codified its own version of the employment-at-will doctrine, Cal. Lab. Code § 2922 explicitly provides that "employment, having no specified term, may be terminated at the will of either party on notice to the other."
Courts in California have explained that such notice must be "reasonable." See, e.g., Mile v. California Growers Wineries, Inc., 45 Cal. App. 2d 674, 114 P.2d 651 (Cal. Dist. Ct. App. 3d Dist. 1941).
States such as Maine and Pennsylvania have enacted laws with reciprocal and contingent-notice provisions, meaning that if an employer requires an employee to give one week's notice before quitting or forfeit one week's pay, the employer is subject to the same restrictions and penalties for failure to provide notice before termination. See Me. Rev. Stat. Ann. tit. 26, § 625; 43 Pa. Stat. Ann. § 291.
Other states have enacted unique laws to deal with particular issues. For example, under the Minnesota Dismissal for Age Act, which protects against discrimination in employment on the grounds of age, employers must provide employees between age 65 and 70 who are terminated for failure to meet bona fide job requirements with 30 days' notice. Minn. Stat. Ann. § 181.81 subd. 1(b).
In Alabama, probationary employees may only be terminated upon at least 15 days' written notice prior to the effective date of termination. See Ala. Code § 36-26-101(c).
Some states also provide for notice and pre-termination hearings for certain public employees. In Arkansas, for instance, the Public School Employer Fair Hearing Act provides advance notice and a hearing to any non-probationary employee prior to termination. Ark. Code Ann. § 6-17-1703. See also Kimble v. Pulaski County Special School Dist., 53 Ark. App. 234, 921 S.W.2d 611 (1996); Gould Public Schools v. Dobbs, 338 Ark. 287, 993 S.W.2d 500 (1999).
Despite these, the vast majority of states still do not require any pre-termination notice. See, e.g., Continental Air Lines, Inc. v. Keenan, 731 P.2d 708 (Colo. 1987) ("employment may be terminated by either party without cause and without notice").
These states continue to follow the American employment at-will doctrine -- and its many judicially created exceptions -- when dealing with one-off and small-scale terminations. Multinational employers should note, however, that other countries, including the U.K., Canada and Australia, do not follow the American rule and instead mandate that employers provide their employees with proper notice prior to termination.
Question: Is there a law or regulation that you have to interview each applicant that applies for a position?
Answer: There are no laws or regulations that require an employer to interview all applicants. While some employers may choose to interview all candidates for open positions, it is more common that employers only interview applicants who meet certain employment-related requirements.
Such screening interviews, however, must not discriminate by race, sex, religion, national origin, citizenship status or disability, and are subject to a number of federal and state laws and regulations, including Title VII of the Civil Rights Act, the Age Discrimination in Employment Act, the Americans with Disabilities Act of 1990, the Rehabilitation Act of 1973, Executive Order No. 11246 (which prohibits certain federal contractors and subcontractors from discriminating in employment decisions) and the majority of state employment laws.
While Title VII does not require employers to interview all applicants for a particular position (see Wheeler v. City of Columbus, 686 F.2d 1144 (5th Cir. 1982), denying an interview on the basis of a protected characteristic such as sex or race violates Title VII and opens employers up to civil liability and potential administrative enforcement actions. See Gillin v. Federal Paper Bd. Co., Inc., 479 F.2d 97 (2d Cir. 1973) (sex); Nanty v. Barrows Co., 660 F.2d 1327 (9th Cir. 1981) (race), overruled on other grounds by, O'Day v. McDonnell Douglas Helicopter Co., 79 F.3d 756 (9th Cir. 1996).
One way selection procedures may violate the law is by unintentionally disqualifying minorities or women from consideration for hiring at higher rates than other candidates. 29 C.F.R. § 1607.16B. Employers may not use even seemingly neutral and objective selection procedures having such a disparate or adverse impact, unless it can be shown that the procedure is a reasonable measure of job performance in that it is job-related and justified by business necessity. See 42 U.S.C. § 2000e-2(k); Griggs v. Duke Power Co., 401 U.S. 424 (1971).
Such principles have been extended to subjective selection procedures such as job interviews and the discretionary judgments of supervisors. See Watson v. Fort Worth Bank & Trust, 487 U.S. 977 (1988). Absent such a showing, an employer who uses selection procedures that disparately impact protected classes violates Title VII regardless of the employer's intent.
Frequently, employers utilize a number of different selection procedures when making employment decisions. For example, when hiring, employers may first screen potential applicants from a pool by reviewing applications and resumes, then conduct a series of interviews and background checks.
Given the different stages of this hypothetical hiring process, it can be difficult to assess the overall disparate impact on sex or race. However, courts have still found employers can be held liable for violations of Title VII notwithstanding the absence of evidence of disparate impact at the last stage of such a multi-stage process, as discrimination may have occurred at any stage of the process. See, e.g., Connecticut v. Teal, 457 U.S. 440 (1982).
There are also no state laws or regulations that require employers to interview all job applicants. Like federal laws, however, state laws also protect job applicants by prohibiting employers from rejecting applications from individuals in protected classes. See Cal. Code Regs title 2 §§ 7290.9(b)(1), 7294.0(b)(1), 7295.5(b).
However, under some affirmative-action programs, public or private employers may be required to interview all applicants for certain positions. See Norwalk Bd. of Educ. v. State, No. CV000505526, 2001 WL 1249954 (Conn. Super. 2001 Sept. 28, 2001) (affirmative action plan required the superintendent and the principal of the school to interview all applicants for assistant principal positions).
The "Uniform Guidelines on Employee Selection Procedures and the Questions and Answers" that accompany them provide useful information for employers about acceptable interview/selection procedures and the appropriate ways in which to document resultant decisions. See 29 C.F.R. § 1607 (2010). The guidelines apply to employers under only Title VII and Executive Order 11246. 29 C.F.R. § 1607.2D.
The EEOC, however, has enacted similar regulations under the ADA making it unlawful for employers to use selection criteria to screen out individuals with disabilities.
In sum, while no laws or regulations specifically require that employers interview all applicants, employers are obligated under various anti-discrimination laws to not utilize selection procedures that would have a disparate impact on applicants.
While employers should feel comfortable selecting only certain applicants to interview, they must be sure to document, properly justify and consistently apply any criteria used to advance candidates. By conforming with the EEOC's Uniform Guidelines, HR professionals can safely navigate the legal hurdles when interviewing and hiring employees.
Keisha-Ann G. Gray is senior counsel in the Labor & Employment Law Department of Proskauer Rose in New York and co-chair of the Department's Employment Litigation and Arbitration Practice Group.