Jobs are fast disappearing. What can you do when confronted with the loss of staff in your department or, even worse, the loss of your own position? For both employers and employees, it is important to understand the respective rights and responsibilities of each. No matter which side of the desk you sit on, the advice of a skilled human resources professional is priceless.
The basic premise in the United States is that all employees are hired "at will." This means an employer can terminate an individual at any time, for any reason, no matter how irrational it seems. A person cannot be terminated for an unlawful reason, such as minority status or age. For those in the public sector, there also might be rules and regulations based upon federal, state or local law governing termination.
Those under a contract of employment, of course, are governed by the termination rights and responsibilities spelled out in the agreement.
Your RightsRegardless of the reason for termination, there are certain rights to which everyone is entitled. For example, if you are a participant in your employer's medical plan, you should be able to continue your insurance coverage for up to 18 months, for which you would pay. This is required by COBRA, which applies to organizations with 20 or more employees.
An employer also is obligated to pay any benefits you have accrued up to the date of termination. If your medical plan has not reimbursed you, for example, for benefits prior to termination, you are entitled to recover those. Similarly, accrued but unpaid business expenses, retirement benefits, etc., are yours.
Many employers have established severance-pay programs; your employee handbook might set forth the terms and conditions of these.
If you are a participant in a 401(k) or other retirement plan, you generally are entitled to certain rights, as governed by the terms of the plan and outlined in the “summary plan description." Be careful, however, what you do with these funds to avoid harsh tax ramifications.
In most states, unused but earned vacation or leave time must be paid.
While there is no requirement that a reference be provided, generally when there is a layoff, you should request and obtain a reference letter stating you were laid off, and not fired for cause. You might want to get agreement on a more laudatory reference letter before the effective date of termination.
Don't forget to ask about some extras, such as outplacement services, transfer of ownership of insurance policies, use of an office while seeking new employment and the like.
Employers' RightsYour employer is entitled to your confidentiality, preventing you from revealing trade secrets, marketing plans and other proprietary information. You might also be bound not to compete with your employer for business or solicit its customers. These requirements generally are extremely limited by the courts and require a full written agreement.
It also is important to know what rights you have in the event of a grievance over your termination. Do you have to go to arbitration for any dispute? Can you go to court? This could be determined based upon the policies of your employer or any written agreement.
Generally, with layoffs, employers limit the potential for further liability for age or other discrimination charges by asking outgoing employees to sign a general release. If you don't sign, you will get only what the law provides -- accrued vacation time and the like. Sign it, and the full severance package is yours.
Jonathan T. Howe, Esq., is a senior partner in the Chicago, St. Louis and Washington, D.C., law firm of Howe & Hutton Ltd., which specializes in meetings, travel and hospitality law. Legal questions can be e--mailed to him at email@example.com.