Legislative Briefing Kit (3/12/2002)
WRONGFUL DISCHARGE
INTRODUCTION TO WRONGFUL DISCHARGE
There are 80 million people employed in the private sector of the
American economy. 1 Only about
20 million of these are union members protected from unjust dismissal by
collective bargaining agreements. The remaining 60 million are employed "at
will". 2
"At
will" employees serve at the unfettered discretion of employers. They can
be fired for any reason, even a bad one, or for no reason at all. 3
Unfortunately, employers have frequently exercised this discretion in an
arbitrary and unfair way. In one all too common example, Mrs. Dorothy Jamison
was fired from her job as a supervisor in a Philadelphia nursing home after 10
years of service because she called in two hours late to advise her employer
that she was unable to come to work because her brother, with whom she lived,
had died. Other employees have been fired for protesting the concentration of
carcinogenic saccharin childrens' aspirins 4
for refusing to vote as their employer wished, 5 to avoid paying contractually earned commissions, 6 for refusing to falsify medical
records, 7 and a host of other
equally unjust reasons.
The magnitude of the problem is enormous. Two million at will employees are
fired every year. When impartial arbitrators are given the opportunity to
review termination decisions, half of them are found to be unjust. Experts
believe that at least 150,000 people are unjustly fired every year. 8
The costs of this injustice
are enormous. The financial hardship imposed on workers and their families is
severe, but the financial loss is only the beginning. The stress caused by
trying to support oneself and one's family without a job, and the loss of
self-esteem caused by being fired, combine to drive many fired workers to
alcoholism, mental illness, and even suicide. 9
The answer to this injustice is legislation providing that all employees can
be fired only for just cause.
QUESTIONS AND ANSWERS: WRONGFUL DISCHARGE
Doesn't such legislation interfere with an employer's right
to manage its business?
An employer has a legitimate right to
manage its business at it sees fit. That right, however, is not unlimited, and
cannot be exercised in a manner which denies fundamental American values.
Employers do not have the right to discriminate on the basis of race, sex,
or age in employment decisions. They should not have the right to fire workers
without a legitimate reason.
Why is this a civil liberties problem?
Free expression, equal protection, and due process are the basic rights of all
Americans.When the government infringes upon these values, it is a violation of
the Constitution.It is not a violation of the Constitution for a private
corporation to infringe upon these values since the Constitution limits only
governmental action. The loss of freedom to an individual, however, is just as
great when it is done by a corporation as when it is done by the government.
The potential loss of freedom to all citizens is also just as great. America's
corporations have grown to a level of size and power undreamed of by the framers
of the Constitution. A number of corporations are wealthier than most
countries, and dwarf state and local governments.
Progressive organizations have long opposed racial discrimination in
employment and corporate censorship of whistleblowers in the private sector,
even though these practices do not violate the Constitution. Corporate policies
which inflict penalties without due process also warrant our opposition.
Wouldn't the cost of compliance constitute a burden on
employers which would raise prices to consumers and make American industry less
competitive?
Protecting employees from unjust discharge will
not hurt American industry, and may even help it. The costs of arbitration are
relatively small, and the requirement that employees share the cost will
minimize the number of hearings. The overall cost will not constitute a
significant burden on employers.
This small cost may be more than outweighed by benefits which industry would
receive. Evidence from a number of sources shows that industry can prosper by
treating workers fairly.
- Unionized employers have been providing these protections to their workers
for decades. While employers frequently complain about various constraints
imposed by unions (such as work rules), complaints about firing only for just
cause are conspicuous by their absence. Nor has there been a single recorded
case of an employer offering any inducement to a union in exchange for dropping
this requirement. 10
- Many non-union employers have voluntarily adopted policies of firing only
for just cause. These include such spectacularly successful companies as IBM.
They adopted these policies because treating employees fairly increased their
effectiveness and profits.
- Virtually every other industrialized nation has adopted rules similar to
those contained in this policy. Two of the most notable are West Germany and
Japan. 11 These countries
have not found the burden of fair play difficult to bear, as shown by their
outstanding success in international trade competition.
Wouldn't the hearings be very complicated and expensive?
No. The issues in such cases are usually fairly straightforward, and the
arbitration process has for years demonstrated that it is possible to resolve
labor discipline disputes fairly at a reasonable cost. Existing arbitration
organizations (such as the American Arbitration Association) already handle
thousands of these cases annually (mostly in the context of collective
bargaining agreements). An experienced corps of neutral labor arbitrators has
learned to conduct fair hearings incorporating the key elements of due process
(notice, compulsory discovery, confrontation and crossexamination) without
becoming mired in the time consuming and costly legal proceedings that typify
judicial proceedings. A labor arbitration can frequently be resolved in 3-6
months, at a cost of approximately $1500. They are frequently held without
attorneys (the arbitrator will draw out the relevant evidence). Both labor and
management agree that the results are generally fair to both sides.
Workers who lose their jobs are already eligible for
unemployment compensation payments. Why is anything more needed?
Unemployment compensation falls far short of complete protection for workers
who have lost their jobs.
- Unemployment compensation payments have a ceiling. While this ceiling
varies from state to state, most workers' UC payments are signifiantly less than
their former paycheck.
- Unemployment compensation payments are of limited duration. While most
people are able to find another job before their payments end, many are not so
fortunate.
- Even where a worker finds a new job immediately at the same pay, there are
economic losses, such as seniority, accrued benefits (vacation, etc.), and
vested pension and profit sharing plans.
- Unemployment compensation does nothing for the human costs of losing one's
job.
Isn't this creating a statutory right to a job?
No. The proposed statute would not require the government or private
industry to create a single job. It would not require that any employer give a
job to a person the employer did not feel was qualified. And it would not
prohibit any employer from eliminating a job if it was no longer needed.
All this statute would do is prevent people from being fired from their
jobs, unless they have done something to justify it.
If employers are voluntarily adopting policies of firing
only for just cause, isn't a statute unnecessary?
Unfortunately, only a minority of companies have adopted such progressive
policies. There is no assurance that the other companies ever will. There are
reasons to believe that many businesses will never adopt such a policy.
Won't this prohibit employers from having layoffs or
closing plants when it's required?
No. The body of arbitration
decisions which has evolved to define just cause in the context of collective
bargaining disputes make it clear that there is no violation of employees'
rights where their job was eliminated for economic reasons.
Economic terminations can also be specifically excluded from the definition
of discharge, as they are in the ACLU model statute.
Can't "Whistleblower" laws and similar laws
tailored to the specific wrong solve the problem without taking as much
authority away from the employer?
No. The number of unjust
reasons for firing an employee is virtually unlimited. To prohibit each one
specifically would require literally dozens of statutes (and even then would be
incomplete).
The only practical solution is to have a general statute requiring just
cause for firing.
Doesn't this type of legislation hurt the union movement,
thereby hurting working people?
Whether wrongful discharge
legislation would help or hurt the unions is far from clear. It would provide
all workers a benefit currently enjoyed only by those who are organized, thereby
removing this from the list of benefits a union could offer in a representation
election. The union could still offer many important benefits, such as
collective bargaining over wages and working conditions, representation at
grievance proceedings and termination proceedings under the model act, and
negotiation over economic terminations such as layoffs and plant closings.
Wrongful discharge laws also offer unions certain benefits. Unions
currently lose many certification elections. One reason is that most
worker/voters have no experience with the union on which they are voting. If
this proposal becomes law, unions could represent workers who were not union
members at arbitration hearings. This could build the experience and good will
needed to win a representation election. The success of the American Federation
of State, County, and Municipal Employees (AFSCME) in organizing government
employees with civil service protections against wrongful discharge supports
this view.
Isn't it unfair to deprive unjustly fired workers of the
right to a jury trial and a full range of remedies? (Commissioners' Model Act)
In a completely fair world all workers would have the right to a just cause
for discharge standard and an affordable jury trial providing the full range of
remedies.
The reality, however, is that we may have to choose between the present
system, under which over 95% of those unfairly fired get nothing, 12 and a system where everyone
unjustly fired is reimbursed for their lost pay and benefits.
Given this situation, surely the fairest choice is for all to receive some
protection.
CURRENT LEGAL STATUS
Numerous attempts have been made to challenge the doctrine of employment at
will in the courts. Although the doctrine is common law which was created by
judges, and which judges have the authority to change, these challenges have had
limited success.
Only in 3 narrow categories have some courts been willing to limit an
employer's right to fire arbitrarily. 13
1.Where an employer has agreed to other employment terms.
If an employer has signed a written employment contract guaranteeing
employment for a fixed term of years, or guaranteeing not to fire without just
cause, this contract may be enforceable by the employee. The reasoning is that
the parties have the right to a legally enforceable agreement which reflects
their mutual desires.
This would logically create a broad exception to the general rule whenever
the employee could show that his employer had agreed that his employment was not
at will. One common example would be where the employee handbook states that
employees will be fired only for just cause, or gives specific grounds or
procedures for termination. 14
Another would be where the employer makes oral assurances of job security.
Employers, however, can easily avoid liability under this theory merely by
making it clear in their employee handbooks and other written materials that
employment is terminable at will.
2.Where the employer's reason for firing violates public policy.
This once appeared to be a promising legal trend. Initial decisions
provided redress to employees who were fired for filing a workers' compensation
claim, 15 for refusing to
give perjured testimony, 16
and for serving on a jury.
17
Again, however, the promise went unfulfilled, as many courts defined the
public policy exception so narrowly as to render it nearly useless. Among the
many situations where courts refused to find that a firing violated public
policy are filing a complaint with state regulatory authorities regarding
illegal stock manipulations, 18 refusing
to vote as the employer wished 19,
and refusing to give false information to federal inspectors. 20
3.Where the employee is a member of a protected group.
Federal legislation now prohibits employment discrimination against a number
of groups including racial minorities, women, the elderly, and the handicapped.
Millions of employees, however, do not belong to any of these protected
groups.
Moreover, even employees who do belong to a protected group are protected
only from being fired because of their race, sex, etc. If they are fired
unjustly for any other reason, they have no protection.
Overall, thirty years of legal challenges have failed to solve the problem
of unjust dismissals. Legal experts do not believe this will change in the
future. New laws are needed.
The only state which currently has a comprehensive wrongful discharge
statute is Montana. 21 While
the rights provided by this statute are good, its reliance upon litigation for
enforcement is a major liability (see commentary to ACLU model act).
ACLU MODEL STATUTE
A number of bills have been introduced in various state legislatures to
protect workers from unjust dismissal. 22
Although they all have the same objective, they vary a great deal in their
approaches to implementation.
The following proposal is an attempt to select the best features from each
bill. Some affiliates will strike the political and administrative judgments
differently, and the proposal should be viewed as a guide, not a finished
product.
A. Summary of the Statute
Employers with more than 5 employees are prohibited from discharging
employees without just cause.
The statute adopts the "common law" meaning of just cause which
has been developed over many years by labor arbitrators. The essence of this
standard is that the employee's conduct must adversely affect their job
performance in a significant way.
This statute affects only employees who are discharged because of their
conduct (inadequate quantity or quality of work or breaking company rules).
Decisions by employers to eliminate jobs for economic reasons (layoffs,
reductions in force, plant closings and relocations, etc.) are not affected.
Employers are required to notify employees at the time of discharge of the
reasons for the discharge and to confirm this in writing within 15 days.
Employees who believe that they have been fired without just cause may file
a complaint with the state employment relations commission within 30 days of
receiving the written confirmation.
The commission shall appoint a mediator within 10 days to resolve the
dispute.
If the dispute is not resolved within 30 days of the appointment
of the mediator, the employee may opt for binding arbitration.
The arbitrator shall be selected from a panel of non-state employees
maintained by the commission. The arbitrator's fees and expenses shall be
divided equally by the parties until the employee has contributed one week's
take home pay. All additional expenses shall be paid by the employer.
The arbitrator shall hold a hearing within 60 days to determine whether
there was just cause for the discharge, and shall announce a decision within 30
days of the hearing.
The arbitrator's award shall be final and binding and may be enforced by
court order if necessary.
UNJUST DISCHARGE BILL
B. Complete Statute
A bill to prohibit the unjust discharge of certain employees; to
provide for mediation and final and binding arbitration of these cases under
certain circumstances; to provide for the selection and payment of arbitrators
and for their authority; to prescribe the procedure for certain hearings; and to
provide for the enforcement and review of awards of arbitrators.
THE PEOPLE OF THE STATE OF ______ ENACT:
Sec. 1. For the purposes of this act, the words and phrases defined in
sections 2 and 3 have the meanings ascribed to them in those sections.
Sec. 2. (1) "Commission" means the employment relations
commission created by Act no. ______ . (The name of the appropriate agency will
vary from state to state).
(2) "Discharge" means an involuntary dismissal from employment.
Discharge includes a resignation that results from an improper or unreasonable
action or inaction of the employer.
"Discharge" does not include termination of employment for
economic reasons such as layoffs, reductions in force, or the closing or
relocation of all or part of a business.
Sec. 3. (1) "Employee" means any person who has worked for an
employer for not less than 20 hours per week except -
(a) Persons who are
protected by civil service or tenure against unjust discharge.
(2) "Employer" means a person or an organization that employs not
less than 5 persons.
Sec. 4. (1) An employer shall not discharge an employee except for just
cause.
The following acts shall under no circumstances be considered just
cause.
1.Exercise of rights under the First Amendment to the United States
Constitution.
2.Exercise of other legal rights or civic obligations.
3.Revelation of what the employee in good faith believes to be illegal
conduct by the employer.
4.Good faith refusal to engage in illegal conduct requested by the employer.
(2) An employer who discharges an employee shall notify the employee orally
at the time of discharge, and in writing by registered mail within 15 calendar
days after the discharge, of all reasons for the discharge.
Sec. 5. (1) An employee who believes that he or she has been discharged
in violation of section 4(1) may file by registered mail a written complaint
with the commission not later than 30 calendar days after receipt of the
employer's written notification of discharge as provided in section 4(2). The
complaint shall contain the names, addresses, and telephone numbers of the
employer and of the employee, the date of the discharge of the employee, and a
short statement of the reason for the filing of the complaint.
(2) If an employer fails to provide the discharged employee with a written
notification of his or her discharge and the reason for it, the discharged
employee may file by registered mail a written complaint, as described in
subsection (1), with the commission not later than 90 calendar days after the
discharge.
Sec. 6. (1) Upon receipt of complaint from a discharged employee, the
commission immediately shall appoint from its panel of mediators a mediator to
assist the employer and the discharged employee in attempting to resolve their
dispute.
(2) If the dispute is not resolved within 30 calendar days after the
commencement of mediation, the mediator shall explain to the employer and the
discharged employee the process and purpose of final and binding arbitration and
the optional methods of selecting and compensating an arbitrator, as described
in sections 7 and 8.
(3) After the option of arbitration is made available to the discharged
employee pursuant to subsection (2), the employee may request a continuance of
mediation if he or she believes that a mutual resolution of the dispute is
possible. If a mutual resolution is not likely, the discharged employee may
file by registered mail a written request with the commission for arbitration of
the dispute, together with a statement of the method, pursuant to sections 7 and
8, that he or she desires of selecting and compensating the arbitrator.
Sec. 7. An arbitrator for a case brought under this act may be selected
from 1 of the following 2 alternatives:
(a) Upon the request of a discharged employee, the commission immediately
shall select from a list that it maintains of impartial, competent, and
reputable arbitrators who are not employees of this state, 5 persons as nominees
for arbitrator. Within 10 days after receipt of the names of the nominees, the
employer and the employee may each strike peremptorily the name of 2 nominees.
If the employer or employee does not return the list within the 10-day period,
then each person whose name appears on the list shall be considered to be
acceptable to that party. Within 7 days after this 10-day period, the
commission shall designate 1 of the remaining nominees as the arbitrator. If
each nominee who is considered to be acceptable by the employer and the employee
declines or for any reason is not able to serve as arbitrator, then the director
of the commission shall appoint an arbitrator from other members of this panel
of arbitrators without the submission of any additional lists to the employer
and the discharged employee.(b) The employer and the discharged employee may
select as arbitrator any person who is acceptable to both parties.
Sec. 8. (1) The employer and employee shall share equally the fee and
expenses of the arbitrator until the employee has contributed a sum equal to one
week's take home pay. All additional expenses shall be paid by the employer.
(2) A party who produces a witness at the arbitration hearing shall bear the
expenses, if any, of that witness. Other expenses similarly shall be borne by
the party incurring them.
Sec. 9. (1) Within 60 calendar days after his or her appointment, or
within further additional periods to which the parties may agree, the arbitrator
designated pursuant to section 8 shall call a hearing and shall give reasonable
notice of the time and place of the hearing to the employer and the employee.
(2) The arbitration may proceed in the absence of an employer or the
employee, who, after due notice, fails to be present at the hearing and who
fails to obtain an adjournment of the hearing, as provided in subsection (3).
An arbitrator shall not grant or deny a grievance solely on the default of a
party. Rather, the arbitrator shall require the opposing party to submit
evidence, as necessary, for the rendering of an award.
(3) The arbitrator, subject to section 10 and for good cause shown, may
adjourn the hearing upon the request of a party or upon his or her own
initiative, and shall adjourn the hearing when both parties agree to the
adjournment.
Sec. 10. (1) The proceedings shall be informal. The arbitrator may
conduct the hearing in whatever manner that he or she believes will permit the
full and most expeditious presentation of the evidence and arguments of the
employer and the employee. Technical rules of evidence shall not apply, and the
competency of the evidence shall not be considered to be impaired by the
informality of the proceedings. The employer and the employee, though, may not
submit a new or different claim to the arbitrator after his or her appointment
without the consent of the arbitrator and all other parties. The arbitrator may
receive into evidence any oral or documentary evidence or other data that he or
she considers to be relevant to the issues under consideration at the hearing,
and the arbitrator shall request the submission of any evidence that he or she
considers to be necessary for a proper understanding and determination of the
issues in dispute.
(2) The arbitrator may administer oaths and require the attendance of
witnesses and the production of books, papers, contracts, agreements, and
documents that he or she considers to be material to a just determination of the
issues in dispute. For this purpose, the arbitrator may issue subpoenas. If a
person refuses to obey a subpoena, or to be sworn or to testify, or if a
witness, party, or attorney is guilty of contempt while in attendance at a
hearing, the arbitrator may, or the attorney general if requested shall, invoke
the aid of the circuit court within the jurisdiction in which the hearing is
being held, which court shall issue an appropriate order. The court may punish
a failure to obey the order as contempt.
(3) Attendance at the hearing is limited. Both employer and employee have
the right to be represented by counsel or other representatives of their
choice. In addition, a person who has a direct interest in the arbitration
award is entitled to attend the hearing. The arbitrator shall determine the
propriety of the attendance of other persons at the hearing. The arbitrator
also shall have the power to require the retirement of a witness during the
testimony of another witness.
(4) The employer, the employee, or both may, before the scheduled hearing
date, request that the commission arrange for a verbatim record of the
proceeding. If the employer and the employee agree that a transcript is to be
the official record of the proceeding, then a transcript shall be made available
to the arbitrator, and the arbitrator shall make the transcript available for
inspection, at a designated time and place, by the employer and the employee.
The party that requests that a verbatim record of the proceedings be made shall
bear the total cost of the record. If the employer and the employee request
that a verbatim record of the proceedings be made, then the employer and the
employee shall share equally the cost of the record.
(5) The burden of proof shall be upon the employer to show that the
discharge was for just cause. The employee shall have the right confront and
cross examine any witness against him or her.
Sec. 11. (1) Within 30 calendar days after the close of the hearing, or
within further additional periods to which the parties may agree, the
arbitrator, based upon the issues and evidence presented to him or her, shall
render a signed opinion and award. The arbitrator shall deliver by registered
mail a copy of the opinion and award to the employer, the employee, and the
commission.
(2) Some of the remedies from which the arbitrator may select are the
following:
(a) The sustainment of the discharge.
(b)
Reinstatement of the discharged employee with no back pay.
(c)
Reinstatement of the discharged employee with partial back pay.
(d)
Reinstatement of the discharged employee with full back pay.
(e) A
severance payment. The severance payment should be calculated to equal, as
closely as possible, the employee's lost compensation and benefits until they
can obtain comparable new employment, unless there are special circumstances
that justify a lesser amount. If possible, severance should be paid in regular
increments for the duration of unemployment, rather than a lump sum.
(3) If the employer and the employee settle their dispute during the course
of the arbitration proceeding, the arbitrator, upon their request, may set forth
the terms of the settlement in the award.
Sec. 12. An award of the arbitrator shall be final and binding upon the
employer and the employee and may be enforced, at the instance of either the
employer or the employee, in the circuit court for the county in which the
dispute arose or in which the employee resides.
Sec. 13. The circuit court for the county in which the dispute arose or
in which the employee resides may review an award of the arbitrator, but only
for the reason that the arbitrator was without or exceeded his or her
jurisdiction, or the award was procured by fraud, collusion, or other similar
and unlawful means. The pendency of a proceeding for review shall not stay
automatically the award of the arbitrator.
Sec. 14. If an employer willfully disobeys or offers resistance to a
lawful order of enforcement issued by the circuit court, then the employer or
the employee, whichever is appropriate, may be held in contempt. The punishment
for each day that the contempt persists may be a fine, fixed at the discretion
of the court, in an amount not to exceed $250.00 per day.
Sec. 15. The protections provided to employees by this act are in
addition to any other legal rights they may have in connection with a loss of
employment.
Sec. 16. An employer shall post a copy of this act in a prominent place
in the work area.
C. Commentary
The heart of this proposed statute is the
requirement that employers fire employees only for "just cause".
Just cause is purposely not defined in the statute. The intention is to
adopt the standard which has been developed over many years by arbitrators in
collective bargaining disputes.
This standard is flexible to accommodate the needs of different jobs in
different industries (it is much more serious, for example, for an airline pilot
to be late for work than a file clerk). However, there is a core of meaning
which virtually all arbitrators accept.
In order for a discharge to be done with just cause,
1.The employee's conduct must adversely affect their job performance.
This could be by breaking a company rule or by not producing an adequate
quality or quantity of work.
2.The rule (or performance standard) must have been made known to the
employee.
3.The infraction must be sufficiently serious to warrant firing.
Certain conduct, such as assaulting co-workers or reporting for work under
the influence of drugs, are generally considered so serious that it is just to
fire on the first offense.
For other infractions, however, such as lateness or absenteeism, the
consensus is that the behavior must continue in the face of warnings before a
discharge is just.
4.The rule must be consistently enforced.
Even where the other three requirements are met, an employer can fire an
employee only where previous employees, whose conduct was comparable, were also
fired. If they were not fired, the employer is limited to whatever level of
discipline was actually imposed.
There are several key sections of this type of statute where choices must be
made. These include:
1.Definition of Employee (Section 3) - The proposal protects all employees
who work more than 20 hours per week and are not already protected by civil
service rules.
Arguments can be made for the following exceptions:
i.Managerial Employees - It can be legitimately argued that
executives do not need this protection because of their higher income and their
increased ability to protect themselves with employment contracts.
The counter argument is that it is equally unfair to fire an executive as a
rank and file employee, and that most executives do not have employment
contracts which protect them from unjust dismissal.
If it is decided to include this exception, it should be specifically and
narrowly defined.
An excellent way of doing this is to provide that an employer may select 5
individuals or 5% of his workforce (whichever is greater) to be exempt from the
statutory protection. This selection must be made before the decision to
terminate.
ii.Probationary Employees - A new employee generally does
not have as great an investment in their job as an employee who has held the job
for years, and may be hurt less by discharge.
The counter argument is that employees frequently quit their prior jobs in
order to take new ones. This investment justifies protecting them against
unjust dismissal. This exception is one which employers will push especially
hard for.
2.Definition of Employer (Section 3) - The proposal exempts employers of
less than 5 people on the theory that the proprietors of such "mom and pop"
businesses have a freedom of association right to have employees with whom they
are comfortable.
It could be argued, however, that the right not to be
fired unfairly is the more important right.
3.Tribunal (Section 7) - This is probably the most difficult choice. There
are three basic approaches:
a.Private Arbitration
b.Government Arbitration
c.Litigation
The advantages of private arbitration are:
i. The
arbitration system is in place and has demonstrated the ability to handle these
type of disputes fairly.
ii. No expenditure of tax dollars
is required.
iii. It is relatively immune from political
influence.
iv. It is within the means of the average
worker.
Another reasonable approach is to use a government agency to do the
arbitration. Many states already have agencies for this purpose. This approach
would be the least expensive. However, while some agencies, such as
unemployment compensation, have remained objective, others, such as the National
Labor Relations Board, have been so influenced by political pressure that they
have lost the confidence of both management and labor.
The litigation approach is not recommended because no one has yet found a
way to bring the costs of this method within the means of most workers. They
could not afford to pay a lawyer's normal fee for the number of hours such a
case would require. The probability of winning and potential economic recovery
are not high enough for contingent fee arrangements to be feasible.
4.Costs (Section 8) - Ordinarily, the cost of arbitration is shared equally
between the parties. While this amount (about $750) may be within the means of
many workers, it is high enough to discourage many people from bringing just
claims. The proposal, therefore, shifts this cost to the employer. The reason
for requiring the employee to pay one week's take home pay is to discourage
frivolous claims.
Obviously, an argument could be made that the employer should bear the
entire cost.
UNIFORM STATE LAW
COMMISSIONERS' MODEL ACT
A. Background
The previous model statute represents the ideal. The ACLU and other
progressive organizations have attempted to enact such legislation for years
without success.
This has lead some advocates of workplace justice to propose a compromise.
Under this approach, workers would receive a "just cause" standard and
affordable binding arbitration. The available remedies would be restricted to
reinstatement with backpay (or severance pay). Compensatory damages ("pain
and suffering") and punitive damages would not be available. Unlike our
model, however, this approach requires workers to submit their claims to
arbitration. The option of a jury trial with potential tort damages is
eliminated. This relief from catastrophic liability is of enormous value to
employers (the average jury verdict in California is now in excess of $500K.)
23
A model act based on this approach was adopted by the National Conference of
Commissioners on Uniform State Laws in August 1991. Because it is a compromise,
and because the commissioners are an influential mainstream group, their model
will receive serious attention in many state legislatures. The ACLU national
office was an advisor to the commissioners' drafting committee, and supported
the final product. Affiliates may want to consider supporting this approach as
a good (though imperfect) measure which has the best chance of becoming law.
UNIFORM EMPLOYMENT
TERMINATION ACT
B. MODEL ACT
NATIONAL CONFERENCE OF COMMISSIONERS UNIFORM STATE LAWS
Section 1. DEFINITIONS. In this [Act]:
(1) "Employee" means an individual who works for hire, including
an individual employed in a supervisory, managerial, or confidential position,
but not an independent contractor.
(2) "Employer" means a person
[, excluding this state, a political subdivision, a municipal corporation, or
any other governmental subdivision, agency, or instrumentality,] that employs
[five] or more employees for each working day in each of 20 or more calendar
weeks in the two year period next preceding a termination or an employer's
filing of a complaint pursuant to Section 5(c), excluding a parent, spouse,
child, or other member of the employer's immediate family or of the immediate
family of an individual having a controlling interest in the employer.
(3) "Fringe
benefit" means vacation leave, sick leave, medical insurance plan,
disability insurance plan, life insurance plan, pension benefit plan, or other
benefit of economic value, to the extent the leave, plan, or benefit is paid for
by the employer.
(4) "Good cause" means
(i)
a reasonable basis related to an individual employee for termination of the
employee's employment in view of relevant factors and circumstances, which may
include the employee's duties, responsibilities, conduct on the job or
otherwise, job performance, and employment record, or
(ii)
the exercise of business judgement in good faith by the employer, including
setting its economic or institutional goals and determining methods to achieve
those goals, organizing or reorganizing operations, discontinuing,
consolidating, or divesting operations or positions or parts of operations or
positions, determining the size of its work force and the nature of the
positions filled by its work force, and determining and changing standards of
performance for positions.
(5) "Good faith" means honesty in fact.
(6) "Pay"
as a noun means hourly wages or periodic salary, including tips, regularly paid
and nondiscretionary commissions and bonuses, and regularly paid overtime, but
not fringe benefits.
(7) "Person" means an individual,
corporation, business trust, partnership, association, joint venture, or any
other legal or commercial entity [, excluding government or a governmental
subdivision, agency, or instrumentality].
(8) "Termination"
means:
(i) a dismissal, including that resulting from the
elimination of a position, of an employee by an employer;
(ii)
a layoff or suspension of an employee by an employer for more than two
consecutive months; or
(iii) a quitting of employment or a
retirement by an employee induced by an act or omission of the employer, after
notice to the employer of the act or omission without appropriate relief by the
employer, so intolerable that under the circumstances a reasonable individual
would quit or retire.
SECTION 2. SCOPE
(a) This [Act] applies only to a termination
that occurs after the effective date of this [Act].
(b) This [Act] does
not apply to a termination at the expiration of an express oral or written
agreement of employment for a specified duration, which was valid, subsisting,
and in effect on the [effective] date of this [Act]
(c) Except as provided
in subsection (e), this [Act] displaces and extinguishes all common-law rights
and claims of a terminated employee against the employer, its officers,
directors, and employees, which are based on the termination or on acts taken or
statements made that are reasonably necessary to initiate or effect the
termination if the employee's termination requires good cause under Section 3
(a), is subject to an agreement for severance pay under Section 4 (c), or is
permitted by the expiration of a specified duration agreement under Section 4
(d).
(d) An employee whose termination is not subject to Section 3(a) or
4(d) and who is not a party to an agreement under Section 4(c) retains all
common-law rights and claims.
(e) This [Act] does not displace or
extinguish rights or claims of a terminated employee against an employer arising
under state or federal statutes or administrative regulations having the force
of law [or local ordinances valid under state law], a collective-bargaining
agreement between an employer and a labor organization, or provisions of an
express oral or written agreement relating to employment that do not violate
this [Act]. Those rights and claims may not be asserted under this [Act],
except as otherwise provided in this [Act]. The existence or adjudication of
those rights or claims does not limit the employee's rights or claims under this
[Act], except as stated in Section 7(d).
SECTION 3. PROHIBITED TERMINATIONS.
(a) Unless otherwise
provided in an agreement for severance pay under Section 4(c), or for a
specified duration under Section 4(d), an employer may not terminate the
employment of an employee without good cause.
(b) Subsection (a) applies
only to an employee who has been employed by the same employer for a total
period of one year or more and has worked for the employer for at least 520
hours during the 26 weeks next preceding the termination. A layoff or other
break in service is not counted in determining whether an employee's period of
employment totals one year, but the employee is considered to be employed during
paid vacations and other authorized leaves. If an employee is rehired after a
break in service exceeding one year, not counting absences due to labor disputes
or authorized leaves, the employee is considered to be newly hired. The 26-week
period for purposes of this subsection does not include any week during which
the employee was absent because of layoffs of one year or less, paid vacations,
authorized leaves, or labor disputes.
SECTION 4. AGREEMENTS BETWEEN EMPLOYER AND EMPLOYEE.
(a) A
right of an employee under this [Act] may not be waived by agreement except as
provided in this section.
(b) By express written agreement, an employer and
an employee may provide that the employee's failure to meet specified
business-related standards of performance or the employee's commission or
omission of specified business-related acts will constitute good cause for
termination in proceedings under this [Act]. Those standards or prohibitions
are effective only if they have been consistently enforced and they have not
been applied to a particular employee in a disparate manner without
justification. If the agreement authorizes changes by the employer in the
standards or prohibitions, the changes must be clearly communicated to the
employee.
(c) By express written agreement, an employer and an employee may
mutually waive the requirement of good cause for termination, if the employer
agrees that upon the termination of the employee for any reason other than the
willful misconduct of the employee, the employer will provide severance pay in
an amount equal to at least one month's pay for each period of employment
totaling one year, up to a maximum total payment equal to 30 months' pay at the
employee's rate of pay in effect immediately before the termination. The
employer shall make the payment in a lump-sum or a series of monthly
installments, none of which may be less than one month's pay plus interest on
the principal balance. The lump-sum payment must be made or the monthly
payments must begin within 30 days after the employee's termination. An
agreement under this subsection constitutes a waiver by the employer and the
employee of the right to civil trial, including jury trial, concerning disputes
over the nature of the termination and the employee's entitlement to severance
pay, and constitutes a stipulation by the parties that those disputes will be
subject to the procedures and remedies of this [Act].
(d) The requirement of good-cause for termination does not apply to the
termination of an employee at the expiration of an express oral or written
agreement of employment for a specified duration related to the completion of a
specified task, project, undertaking, or assignment. If the employment
continues after the expiration of the agreement, Section 3 applies to its
termination unless the parties enter into a new express oral or written
agreement under this subsection. The period of employment under an agreement
described in this subsection counts toward the minimum periods of employment
required by Section 3(b).
(e) An employer may provide substantive and
procedural rights in addition to those provided by this [Act], either to one or
more specific employees by express oral or written agreement, or to employees
generally by a written personnel policy or statement, and may provide that those
rights are enforceable under the procedures of this [Act].
(f) An employing
person and an employee not otherwise subject to this [Act] may become subject to
its provisions to the extent provided by express written agreement, in which
case the employing person is deemed to be an employer.
(g) An agreement
between an employer and an employee subject to this [Act] imposes a duty of good
faith in its formation, performance, and enforcement.
(h) By express
written agreement, an employer and an employee may settle at any time a claim
arising under this [Act].
(i) By express written agreement before or after
a dispute or claim arises under this [Act], an employer and an employee agree to
private arbitration or other alternate dispute- resolution procedure for
resolving the dispute or claim.
(j) By express written agreement after a
dispute or claim arises under this [Act], an employer and an employee agree to
judicial resolution of the dispute or claim.
(k) The substantive provisions
of this [Act] apply under any agreement authorized by subsections (i) and (j).
SECTION 5. PROCEDURE AND LIMITATIONS.
(a) An employee whose
employment is terminated may file a complaint and demand for arbitration under
this [Act] with the [Commission; Department; Service] not later than 180 days
after the effective date of the termination, or the date of the breach of an
agreement for severance pay under Section 4(c), or the date the employee learns
or should have learned of the facts forming the basis of the claim, whichever is
latest. The time for filing is suspended while the employee is pursuing the
employer's internal remedies and has not been notified in writing by the
employer that the internal procedures have been concluded, but resort to an
employer's internal procedures is not a condition for filing a complaint under
this [Act].
(b) Except when an employee quits, an employer, within 10
business days after a termination, shall mail or deliver to the terminated
employee a written statement of the reasons for the termination and a copy of
this [Act] or a summary approved by the [Commission; Department; Service].
(c) An employer may file a complaint and demand for arbitration under this [Act]
with the [Commission; Department; Service] to determine whether there is good
cause for the termination of a named employee. At least 15 business days before
filing, the employer shall mail or deliver to the employee a written statement
of the employer's intention to file and the factors alleged to constitute good
cause for a termination.
(d) The [Commission; Department; Service] shall
promptly mail or deliver to the respondent a copy of the complaint and demand
for arbitration. Within 21 days after receipt of a complaint, the respondent
must file an answer with the [Commission; Department; Service] and mail a copy
of the answer to the complainant. The answer of a respondent employer must
include a copy of the statement of the reasons for the termination furnished the
employee.
(e) When a complaint is filed, a complainant employee or employer
shall pay a filing fee to the [Commission; Department; Service] in [the amount
of $ ] [an amount not exceeding the maximum filing fee for a civil action
in the courts of general jurisdiction of this State]. The [Commission;
Department; Service] may waive or defer payment of the filing fee upon a showing
of the complainant employee's indigency.]
SECTION 6. ARBITRATION; SELECTION AND POWERS OF ARBITRATOR; HEARINGS;
BURDEN OF PROOF.
(a) Except as otherwise provided in this [Act], the
[Uniform Arbitration Act]
[‹‹ arbitration act of this State]
applies to proceedings under this [Act] as if the parties had agreed to
arbitrate under that statute. The [Commission; Department; Service] shall adopt
procedural rules to regulate arbitration under this [Act]. The [Administrative
Procedure Act and other] statutes of this State applicable to the procedures of
State agencies do not apply to arbitration under this [Act].
(b) The
[Commission; Department; Service] shall adopt rules specifying the
qualifications, method of selection, and appointment of arbitrators. An
arbitrator serving under this [Act] exercises the authority of the state.
(c) Subject to rules adopted by the [Commission; Department; Service], all forms
of discovery [provided by applicable state statute, rule or regulation] are
available in the discretion of the arbitrator, who shall ensure there is no
undue delay, expense, or inconvenience. Upon request, the employer shall
provide the complainant or respondent employee a complete copy of the employee's
personnel file.
(d) A party may be represented in arbitration by an
attorney or other person authorized under the laws of this State to represent an
individual in arbitration.
(e) A complainant employee has the burden of
proof that a termination was without good cause or that an employer breached an
agreement for severance pay under Section 4 (c). A complainant employer has the
burden of proof that there is good cause for a termination. In all
arbitrations, the employer shall present its case first unless the employee
alleges that a quitting or retirement was a termination within the meaning of
Section 1(8) (iii).
(f) If an employee establishes that a termination was
motivated, in part, by impermissible grounds, the employer, to avoid liability,
must establish, by a prepondevidence, that it would have terminated the
employment even in the absence of the impermissible grounds.
SECTION 7. AWARDS.
(a) Within 30 days after the close of an
arbitration hearing or at any later time on which the parties may agree, the
arbitrator shall mail or deliver to the parties a written award sustaining or
dismissing the complaint, in whole or in part, and specifying the appropriate
remedies, if any.
(b) An arbitrator may make one or more of the following
awards for a termination in violation of this [Act]:
(1) reinstatement to
the position of employment the employee held when employment was terminated or,
if that is impractical, to a comparable position;
(2) full or partial
backpay and reimbursement for lost fringe benefits, with interest, reduced by
interim earnings from employment elsewhere, benefits received, and amounts that
could have been received with reasonable diligence;
(3) if reinstatement is
not awarded, a lump-sum severance payment at the employee's rate of pay in
effect before the termination, for a period not exceeding [36 months] after the
date of the award, together with the value of fringe benefits lost during that
period, reduced by likely earnings and benefits from employment elsewhere, and
taking into account such equitable considerations as the employee's length of
service with the employer and the reasons for the termination; and
(4)
reasonable attorney's fees and costs.
(c) An arbitrator may make either or
both of the following awards for a violation of an agreement for severance pay
under Section 4(c):
(1) enforcement of the severance pay and other
applicable provisions of the agreement, with interest; and
(2) reasonable
attorney's fees and costs.
(d) An arbitrator may not make any award except
as provided in subsections (b) and (c). The arbitrator may not award damages
for pain and suffering, emotional distress, defamation, fraud, or other injury
under the common law, punitive damages, compensatory damages, or any other
monetary award. In making a monetary award under this [Act], the arbitrator
shall reduce the award by the amount of any monetary award to the employee in
another forum for the same conduct of the employer. In making any award, the
arbitrator is subject to the rules of issue, fact, and judgment preclusion,
which apply in the courts of record in this state.
(e) If an arbitrator
dismisses and employee's complaint and find it frivolous, unreasonable, or
without foundation, the arbitrator may award reasonable attorney's fees and
costs to the prevailing employer.
(f) An arbitrator may sustain an
employer's complaint and make an award declaring that there is good cause for
the termination of a named employee. If the arbitrator dismisses the employer's
complaint, the arbitrator may award reasonable attorney's fees and costs to the
prevailing employee.
SECTION 8. JUDICIAL REVIEW AND ENFORCEMENT.
(a) Either party to
an arbitration may seek vacation, modification, or enforcement of the
arbitrator's award in the [court of general jurisdiction] for the [county] in
which the termination occurred or in which the employee resides.
(b) An
application for vacation or modification must be filed within [90] days after
the issuance of the arbitrator's award. An application for enforcement may be
filed at any time after the issuance of the arbitrator's award.
(c) The
court may vacate or modify an arbitrator's award only if the court finds that:
(1) the award was procured by corruption, fraud, or other improper means;
(2) there was evident partiality by the arbitrator or misconduct prejudicing the
rights of a party;
(3) the arbitrator exceeded the powers of an arbitrator;
(4) the arbitrator committed a prejudicial error of law; or
(5) another
ground exists for vacating the award under the [Uniform Arbitration Act] [‹‹
arbitration act of this State].
(d) In an application for vacation,
modification, or enforcement of the arbitrator's award, the court may award a
prevailing employee reasonable attorney's fees and costs. In an application by
an employee for vacation of the arbitrator's award, the court may award a
prevailing employer reasonable attorney's fees and costs if the court finds the
employee's application is frivolous, unreasonable, or without foundation.
SECTION 9. POSTING.
An employer shall post a copy of this
[Act] or a summary approved by the [Commission; Department; Service] in a
prominent place in the work area. An employer who violates this section is
subject to a civil penalty not exceeding [$ ]. The [Attorney General] is
authorized to bring a civil action, on behalf of this State, to impose and
collect any civil penalty arising under this section.
SECTION 10. RETALIATION PROHIBITED AND CIVIL ACTION CREATED.
An employer or other employing person may not directly or indirectly take
adverse action in retaliation against an individual for filing a complaint,
giving testimony, or otherwise lawfully participating in proceedings under this
[Act], whether or not the individual is an employee having rights under this
[Act]. An employer or other employing person who violates this section is
liable to the individual subjected to the adverse action in retaliation for
damage caused by the action, punitive damages when appropriate, and reasonable
attorney's fees. A separate civil action may be brought to enforce this
liability. The employer is also subject to applicable procedures and remedies
provided by Sections 5 through 8.
SECTION 11. SEVERABILITY CLAUSE.
If any provision of this
[Act] or its application to any person or circumstance is held invalid, the
invalidity does not affect other provisions or application of this [Act] which
can be given effect without the invalid provision or application, and to this
end the provisions of this [Act] are severable.
SECTION 12. EFFECTIVE DATE.
This [Act] takes effect.
SECTION 13. REPEALS.
The following acts and parts of acts
are repealed:
(1) . . . . . . . . . .
(2) . . . . . . . . . .
(3) . . . . . . . . . .
SECTION 14. SAVINGS AND TRANSITIONAL PROVISIONS.
(a) This [Act]
does not apply to the termination of an employee within six months after the
effective date of this [Act] based upon the employee's refusal to enter into an
agreement meeting the minimum standards of Section 4(c), which the employer, in
the exercise of good faith business judgement, may impose as a condition of
continued employment.
APPENDIX
Note: Instead of the arbitration system provided
by Sections 5 through 8 of the preceding text, states may select the following
Alternative A or Alternative B as the means of enforcement.
ALTERNATIVE A
[Section 5. ADMINISTRATIVE PROCEEDINGS.
[Insert provisions consigning enforcement of the [Act] to a new or existing
administrative agency, staffed by civil service or other governmental personnel,
operating under applicable state statutes. Delete Sections 5 through 8 of the
preceding text and renumber the remaining sections an cross references
accordingly.]
Section 6. REMEDIES.
(a) The [Commission; Department;
Service] may provide one or more of the following remedies for a termination in
violation of this [Act]:
(1) reinstatement to the position of employment
the employee held when employment was terminated or, if that is impractical, to
a comparable position;
(2) full or partial backpay and reimbursement for
lost fringe benefits, with interest, reduced by interim earnings from employment
elsewhere, benefits received, and amounts that could have been received with
reasonable diligence;
(3) if reinstatement is not ordered, a lump-sum
severance payment at the employee's rate of pay in effect before the
termination, for a period not exceeding [36 months] from the date of the order,
together with the value of fringe benefits lost during that period, reduced by
likely earnings and benefits from employment elsewhere, and taking into account
such equitable considerations as the employee's length of service and the
reasons for the termination; and
(4) reasonable attorney's fees and costs.
(b) The [Commission; Department; Service] may grant either or both of the
following remedies for a violation of an agreement for severance pay under
Section 4 (c):
(1) enforcement of the severance pay and other applicable
provisions of the agreement, with interest; and
(2) reasonable attorney's
fees and costs.
(c) The [Commission; Department; Service] may not make any
award except as provided in subsections (a) and (b). The [Commission;
Department; Service] may not award damages for pain and suffering, emotional
distress, defamation, fraud, or other injury under the common law, punitive
damages, compensatory damages, or any other monetary award under this [Act]. In
making a monetary award under this section, the [Commission; Department:
Service] shall reduce the award by the amount of any monetary award to the
employee in another forum for the same conduct of the employer. In making any
award, the [Commission; Department; Service] is subject to the rules of issue,
fact, and judgment preclusion applicable in the courts of record in this State.
(d) If the [Commission; Department; Service] dismisses an employee's complaint
and finds it frivolous, unreasonable, or without foundation, the [Commission;
Department; Service] may award reasonable attorney's fees and costs to the
prevailing employer.
(e) Upon the complaint of an employer, the
[Commission; Department: Service] may issue an order declaring whether there is
good cause for the termination of a named employee. If the [Commission;
Department; Service] dismisses the employer's complaint, the [Commission;
Department: Service] may award reasonable attorneys's fees and costs to the
prevailing employee.]
ALTERNATIVE B
[Alternative B would leave the enforcement
of the statute to the civil courts. Delete Sections 5 through 8 of the
preceding text and renumber the remaining sections and any cross reference
accordingly.]
SECTION 5. JUDICIAL REMEDIES.
(a) The court may grant one or
more of the following remedies for a termination in violation of this [Act]:
(1) reinstatement to the position of employment the employee held when
employment was terminated or, if that is impractical, to a comparable position;
(2) full or partial backpay and reimbursement for lost fringe benefits, with
interest, reduced by interim earnings and benefits received, or amounts that
could have been received with reasonable diligence;
(3) if reinstatement is
not awarded, a lump-sum severance payment at the employee's rate of pay in
effect before the termination, for a period not exceeding [36 months] from the
date of the award, together with the value of fringe benefits lost during that
period, reduced by likely earnings and benefits from employment elsewhere, and
taking into account such equitable considerations as the employee's length of
service with the employer and the reasons for the termination; and
(4)
reasonable attorney's fees and costs.
(b) The court may grant either or
both of the following remedies for a violation of an agreement for severance pay
under Section 4(c):
(1) enforcement of the severance pay and other
applicable provisions of the agreement, with interest; and
(2) reasonable
attorney's fees and costs.
(c) The court may not make any award except as
provided in subsections (a) and (b). The court may not award damages for pain
and suffering, emotional distress, defamation, fraud, or other injury under the
common law, punitive damages, compensatory damages, or any other monetary award
under this [Act]. In making a monetary award under this section, the court
shall reduce the award by the amount of any monetary award to the employee in
another forum for the same conduct of the employer. In making any award, the
court is subject to the rules of issue, fact, and judgment preclusion applicable
in courts of record in this State.
(d) if the court dismisses an employee's
complaint and finds it frivolous, unreasonable, or without foundation, the court
may award reasonable attorney's fees and costs to the prevailing employer.
(e) Upon the complaint of an employer, the court may enter a judgment declaring
whether there is good cause for the termination of a named employee. If the
court dismisses the employer's complaint, the court may award reasonable
attorney's fees and costs to the prevailing employee.
C.Discussion
If a decision is made to support the
commissioners' model act, there are two important sections which should be
improved if at all possible.
1.Cap on Frontpay - Section 7(b) (3) limits frontpay (payment in lieu of
reinstatement to make a wrongfully discharged employee whole until they find
another job) to an absolute maximum of 3 years. This is true even if the
arbitrator knows that a wrongfully discharged employee will need more than 3
years to find another job.
This is totally inconsistent with the act's basic premise - elimination of
tort damages in exchange for restoration of lost wages and benefits.
This cap should be eliminated.
2.Waiver
Section 4(c) allows employees to waive their statutory rights in exchange
for severance pay, with a statutorily prescribed minimum.
For very senior managers with significant bargaining power this may make
sense. Many large corporations negotiate "golden parachute"
arrangements with their presidents allowing the board to replace him or her
whenever they believe it will benefit the company in exchange for generous
(generally 7 figure) severance pay.
Unfortunately, the waiver provision is not limited to those with bargaining
power. Any company can require all employees to sign a waiver containing the
statutory minimum severance as a condition of employment. This minimum is worth
far less for most people than the statutory rights being waived.24
The waiver section should be limited to "arms length agreements between
an organization and its employee in which the employee receives consideration
for the waived statutory rights which the parties reasonably believe to be of
equal or greater value."
3. Alternate Dispute Resolution Systems
Section 4 (i) allows employers and employees to agree to substitute an
alternate dispute resolution system for that provided by the act. This is not
necessarily a bad idea. Some employers and employees might genuinely agree on a
system they both preferred.
However, there is nothing in the act that would prevent an employer from
requiring all prospective employees to agree, as a condition of employment, to
an "arbitration" system that is no better than a kangaroo court.
It would be best to drop this provision completely. If there is truly
agreement that some other dispute resolution system is preferable, the parties
will use it voluntarily.
If this cannot be accomplished, the act should be modified to provide that
any alternate system must contain provisions for procedural and substantive
fairness which are comparable to those provided by the act, and that agreement
to use the alternate system can not be a condition of employment.
4. The comments to section i (8) allow termination for off-duty conduct if
it is relevent to job performance, business reputation, or similar concerns.
This is far too broad. Offduty smoking and drinking are "relevant
to" job performance for jobs requiring physical fitness. But an employee
who smokes offduty and still passes the fitness exam should not lose his
or her job.
This language is not needed, and should be dropped.
For a complete discussion of employer control of offduty conduct, see
ACLU legislative brief on lifestyle discrimination.
LEGISLATIVE PROSPECTS
Several factors will work in favor of the passage of unjust dismissal
legislation. The most powerful is that most people, including most legislators,
recognize the injustice of an arbitrary firing.
In addition, there are influential allies. Organized labor generally
supports wrongful discharge legislation. The national AFL-CIO supports the
commissioners' model act (with some reservations). The situation varies
greatly, however, from state to state, and union to union. Unofficial contacts
with the Americans for Democratic Action, the National Council of Churches, and
consumer groups indicate that they will be supportive. However, these groups
are not likely to make this a priority issue.
The major opposition will come from business groups, principally the Chamber
of Commerce. This can be blunted in two ways:
1. Learning the issue well enough to effectively counter their arguments to
the legislature (see questions & answers and bibliography).
2. Enlisting other business leaders to testify in favor of the bill (this
has been done in at least one state).
Business opposition will be greatly reduced if the commissioners' model is
chosen. The Chamber of Commerce did not oppose this model when the
commissioners were considering it, and some management spokespeople have quietly
supported it.
The position of the bar depends on the model that is chosen. The American
Trial Lawyers Association. (ATLA) supports the approach of the ACLU's model, but
are adamantly opposed to the commissioners' approach because it requires the
employee to arbitrate instead of having a jury trial and eliminates tort
damages.
The American Association of Retired Persons will support the ACLU model.
They oppose the commissioner's model. They oppose the commissioner's model
because the 3 year cap on severence pay is unfair to older people, who have the
most difficulty finding employment. If this cap were elimited, AARP might
become an effective ally.
The deciding influence may well be public opinion. A well coordinated
program to involve community groups and create positive media exposure could be
the deciding factor.Bibliography
A great deal has been written about the issue of unjust dismissal. Below is
a list of some of the key issues and some works that deal with them well.
BIBLIOGRAPHY
1.Why is a statute necessary?
Summers, "Individual Protection
Against Unjust Dismissal: Time for a Statute," 62 Va. L. Rev.
481 (1976)
2.Why is this a civil liberties problem?
Maltby, "Why Workplace
Rights is a Civil Liberties Issue," ACLU Workplace Document Bank
#G10.
3.What are the key issues involved in drafting a statute?
Perritt, "Employee
Dismissal, Law and Practice" (Wiley-1984)
4.How does arbitration work?
"Labor Arbitration -
Procedures and Techniques," American Arbitration Association, 140 West 51st
Street, New York, New York 10020
NOTES:
1 For exact
numbers, refer to U.S. Bureau of Labor Statistics.
2 A few employees, mostly top executives, have individual
employment contracts which provide some protection. Their numbers, however, are
insignificant.
3 Payne v. Western and Atlantic R.R. Co. 81
TENN. 507, 518-19 (1884)
4 Pierce v.
Ortho Pharmaceutical Corp. 166 N.J. Super 335, 339 a 2d 1023, 1026(1979)
5 Bell v. Faulkner, 75.5W. 2d 612 (Mo. App.
1934)
6 Fortune v. National Cash
Register Co. 373 Mass. 96,364 N.W. 2d 1251 (1977)
7 Hinrichs v. Tranquilaire Hospital, 352 So 2d 1130 (Ala. 1977)
8 Stieber & Murray, Protection Against
Unjust Discharge: The Need for a Federal Statute, University of Michigan Law
Reform Vol. 16 No. 2, 1983
9 Brenner, Harvey (Dr.), Health Costs and
Benefits of Economic Policy, International Journal of Health Services, Volume 7,
Number 4, 1977.
10 Testimony of Professor Clyde Summers
before the Labor Committee of the Pennsylvania House of Representatives,
September 17, 1986.
11 See Law of
August 10, 1951, An act to provide protection against unwarranted dismissals,
BGII 499, translated in 1951I.L.O. Legislative Series 1951 Ger.
F.R. 4. (Germany) See Article 27, Section 1 of the Japanese Constitution, and
Article 20 of the Labor Standards Law (as interpreted by Japanese courts).
12 Maltby, "The Decline of
Employment at Will; A Quantative Analysis," Labor Law Journal, January 1990
(Also available as ACLU Workplace Document Bank #DP6).
13 The exact boundaries of these exceptions vary slightly
between states. The variations, however, are minor.
14 Toussaint v. Blue Cross & Blue Sheild of Michigan 408
Mich. 579,292 N.W. 2d 880 (1980)
15
Frampton v. Central Indiana Gas Co., 260 Ind.249, 297 N.E. 2d 425 (1973)
16 Peterman v. Teamsters Local 396, 174
Cal. App 2d. 184, 344P.2d 25 (1959)
17
Nees v. Hocks, 536 P. 2d512(1975)
18 Marin v. Jacuzzi, 224 Cal. App. 2d.
19 Bell v. Faulkner, see Note 5.
20 Percival v. General Motors Corp. 539
F.2d. 1126 (8th Cir. 1976)
21
Montana Statutes Sec. 39-2-901.
22
California Senate Bill 1348 (1985 Term); Michigan House Bill 4665 (1979 Term)
See also Statutes of Canada 26-27 Elizabeth II (1978)
23 Dertouzos et. al., The Legal and Economic Consequences of
Wrongful Termination, Rand Institute for Civil Justice 1988.
24 For an economic analysis of the
comparative value of META severance pay and META damages generally, see ACLU
workplace Document Bank # DP 20.
Produced by the ACLU National Task Force on Civil Liberties in the
Workplace
The ACLU is a District 65, UAW AFL-CIO Shop
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