Ch4. Termination — Lawful Dismissal and Wrongful Termination Remedies

Restrictions on Termination

Under US law (at-will employment with exceptions):
Employees may be terminated for any reason — or no reason —
UNLESS the termination violates:

① Federal/state anti-discrimination law (Title VII, ADA, ADEA, GINA)
② Retaliation protections (NLRA, OSHA, workers' comp, whistleblower statutes)
③ Contractual obligations (employment contracts, CBA provisions)
④ Public policy exceptions (jury duty, filing a workers' comp claim)

Wrongful termination = dismissal that violates one of the above
→ Remedies: EEOC charge, NLRB charge, or civil lawsuit

Prohibited Terminations — Protected Classes and Activities

Absolute prohibitions:
① Termination based on race, color, religion, sex, national origin (Title VII)
② Termination based on disability (ADA) or age 40+ (ADEA)
③ Retaliation for engaging in protected concerted activity (NLRA §7)
④ Retaliation for filing OSHA complaints or workers' comp claims

Pregnancy and leave:
Termination while on FMLA-protected leave is presumptively unlawful
Pregnancy Discrimination Act: pregnancy treated same as any temporary disability
Reinstatement rights upon return from FMLA leave (up to 12 weeks)

Exceptions:
Layoffs for legitimate, non-discriminatory business reasons are permitted
→ Must apply criteria consistently and document justification

Advance Notice — WARN Act

WARN Act notice obligation (29 U.S.C. §2101):
60 calendar days advance notice required before:
- Mass layoff (50+ employees at a single site within 30 days)
- Plant closing (50+ employees)

Employer covered: 100+ full-time employees

Exceptions (notice may be shortened):
① Faltering company (actively seeking financing)
② Unforeseeable business circumstances
③ Natural disaster

Tenure-based thresholds:
Part-time employees (< 20 hrs/week or < 6 months): not counted
Full-time employees: must give 60-day notice

Failure to give WARN notice:
Employer owes employees back pay + benefits
for each day of violation (up to 60 days)
→ Termination itself is not void; monetary liability only

Reduction in Force (RIF) / Mass Layoffs

RIF Requirements under US law:
① Legitimate business necessity (financial distress, restructuring, reorganization)
② Good-faith effort to avoid layoffs (voluntary buyouts, reduced hours, hiring freeze)
③ Non-discriminatory selection criteria applied consistently
④ WARN Act notice (60 days where applicable)

Selection criteria considerations:
- Seniority, performance ratings, skills needed going forward
- Must not have disparate impact on protected classes (ADEA "reasonable factors other than age")

Severance:
No federal requirement, but ERISA governs severance plans
Separation agreements often include a release of claims
→ Must comply with OWBPA (Older Workers Benefit Protection Act) for age claims

WARN violation:
Back pay liability up to 60 days per affected employee
Civil penalties up to $500/day for failure to notify local government

Wrongful Termination Remedies

Challenging a wrongful termination:

① Administrative charge (EEOC):
   Must file within 180 days (300 days in states with FEP agencies)
   EEOC investigates → issues Right to Sue letter
   → Federal district court lawsuit (Title VII, ADA, ADEA)

② NLRB unfair labor practice charge:
   File within 6 months of the unlawful act
   Regional Director investigates → ALJ hearing → Board review
   → Federal Court of Appeals

③ State court lawsuit:
   Breach of implied contract, promissory estoppel, public policy tort
   Statute of limitations: typically 2–4 years depending on state

Available remedies:
- Reinstatement to former position
- Back pay for lost wages during the period of wrongful termination
- Front pay (in lieu of reinstatement)
- Compensatory and punitive damages (Title VII caps apply)
- Attorney's fees and costs

Monetary caps (Title VII/ADA):
15–100 employees: $50,000
101–200 employees: $100,000
201–500 employees: $200,000
500+ employees: $300,000

RIF Four Requirements ★★★★★ : Legitimate business need · good-faith avoidance effort · non-discriminatory criteria · WARN notice. All four must be satisfied. Memory tip: Need-Avoid-Criteria-Notice

Protected Leave = Termination Shield ★★★★★ : Terminating an employee on FMLA, workers’ comp, or ADA accommodation leave is presumptively unlawful. Return-to-work rights apply. Memory tip: Leave = protected period — hands off

EEOC Filing Window ★★★★☆ : File within 180 days (300 days in deferral states). Missing the deadline bars the federal lawsuit. Memory tip: Wrongful termination claim = 180/300 days

Practice Quiz

Q. A company conducts a RIF but applies the selection criteria in a way that eliminates 80% of employees over age 50. What claim arises?

Disparate impact age discrimination under the ADEA. Even facially neutral criteria can be unlawful if they disproportionately affect workers 40+ without “reasonable factors other than age.” Affected employees may file EEOC charges within 300 days.

Q. An employer fails to give WARN Act notice before closing a plant. Is the plant closing void?

No. Failure to give WARN notice does not void the closing. The employer is liable for back pay and benefits for each day of violation (up to 60 days), plus civil penalties of up to $500 per day for failure to notify the local unit of government.