Must employers provide a reason for terminating an employee?

Question: I was laid off due to a position elimination on 10/05/10. I would have celebrated my 20th year anniversary as an employee of the company on 03/09/11, just five months later.

I recently found out that my position – the one they had eliminated – was reinstated and posted on 02/14/11.

I believe that “position elimination” was nothing more than a way around firing me, which my employer had no grounds to do.

Your thoughts? Thanks. 

Leigh
Castle Rock, Colorado

Answer: Dear Leigh:   

Your question raises two important aspects of the employment relation that people need to know about:  

a. It is illegal for an employer to terminate an employee in order to deny them important benefits – such as vesting in pensions or qualifying for retirement. In your letter, you did not mention whether (i) you would vest in pension or retirement benefits, or (ii) you would have earned some other special benefit, such as a grant of stock or special bonus, on your twentieth anniversary of employment. Federal law, and probably Colorado state law, too, both say so. While employers are free to terminate employees for many reasons, if this is the reason you think you were terminated, you may have a very important claim against your former employer. 

b. If an employer lies about the reason for a termination, that is considered proof that they have violated the law. There is an old saying that “The best proof of a crime is the cover up.” To use more “legal language,” if you can show that the reason your former employer offered to terminate your employment is probably false, made-up, or concocted, then that alone is considered proof that there exists an improper reason. Said differently, “Why else would your former employer offer a fake reason for your termination unless it knew the real reason was illegal?”

To me, it is hardly likely that your employer felt it needed to reduce headcount in October, and then changed its mind in February. Instead, it seems far more likely that there may be something going on here that “cannot stand the light of day.”
  
c. However, if you signed a Release Agreement when you left your employment in return for severance, it is likely you cannot raise any claim now. When employees are fired, downsized or laid off, they are frequently offered severance payments in return for a Release of claims. That Release almost always includes a requirement that you agree that you will never sue your former employer. If you signed such a Release Agreement to get severance, then you have already likely given up any right to sue your employer for this, or any other reason.
 
d. Releasing legal claims, though, does not mean you have released moral claims, at least not “in my book.” Many times I have counseled people in your circumstances that, while you cannot sue your former employer, there is no reason I know of that you cannot write a letter to your former employer’s Board of Directors, and tell them you think you may have been duped, and despite the fact of your release of legal claims, they should recognize that for moral reasons, they should make sure that you are given recompense for what was taken from you.

e. It is for this reason that, when reviewing a Severance Release Agreement, we try to think of “what’s not in the agreement” more than “what is in it.” Many clients say to us, “My severance agreement looks so simple.” I tell them, “Yes,  but looks are deceiving. I need to know more about you, what happened to you, and why you were chosen for termination, than I need to read the agreement. If you’re giving up all of your claims, I need to know what your possible claims are.” It is my job to identify possible legal claims, and to then raise those legal claims, before the client signs away all of his/her legal claims in a Release Agreement.

If you did not sign a Release Agreement, I strongly suggest you consider standing up for your legal rights at this time. If you have signed a Release Agreement, while you really don’t have any legal rights to stand up for, I still think violation of moral rights will not be tolerated by most people, and this may be your path to redress.

Your letter gave me an opportunity to illustrate important points for other readers. Thank you for writing in. And welcome to our “family.”

Best,
Al Sklover

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