Termination of employment contracts in USA

Yes, the general rule in the U.S., including both California and New York, is that individuals are employed “at will” for an indefinite term, meaning either the employee or employer may terminate the relationship at any time. This is true unless there is a written contract specifying the length of time for the employment (or in some states like California, an oral contract with less than one year of duration is permissible). For all individuals who are employed “at will,” the employer may terminate the employee for any reason, as long as the reason is not prohibited by federal or state law, such as terminations based on discrimination for race, color, religion, sex, national origin, age (40 or older), disability, military or veteran status, or another specifically unlawful basis (“protected classes”). States often expand on the federal protected classes. If a state provides for additional protected classes of individuals, you must follow those laws in the state in which you employ the individual(s).

California expands on federally protected classes by also including: ancestry, immigration status, gender identity, gender expression, marital status, medical condition, and sexual orientation.

New York also expands on federally protected classes by protecting: citizenship or immigration status, creed, sexual orientation, gender identity or expression , marital status, status as a victim of domestic violence, and arrest record or conviction record.

There is no general concept of “dismissal protection.” However, a termination may be considered unlawful if it was made for a discriminatory basis, such as for race, religion, sex, national origin, age (40 or older), disability or another specifically unlawful basis (see above for additional California and New York specific protected classes). Additionally, employees are also protected from retaliation for filing a charge or complaint of discrimination, participating in a discrimination investigation or lawsuit, or opposing discrimination.

The remedy for an unlawful termination can vary depending on the different circumstances of the employee and termination. While reinstatement of the employee is theoretically possible, that is typically not the remedy awarded or sought by the employee, due to concern that the working relationship has been damaged and a return would be uncomfortable for both the employee and employer. In most cases, an employee would be awarded payment of damages including backpay and other areas of monetary relief. More detail on the specific types of monetary damages is provided in the answer below.

An employee may be awarded damages for all harm that is caused by the unlawful termination. There is no maximum an employee can be awarded and no specific method to calculate. The damages may include backpay (as well as damages for all lost benefits), damages for emotional distress, potentially front pay (future loss of payment or wage decrease), and any other monetary losses or damages that the employee is able to prove, such as out of pocket expenses, job search expenses and even medical or psychiatric expenses. If an employee can prove the employer’s actions were especially reprehensible, then employees may also be awarded punitive damages, which are additional damages intended to punish the employer and deter others from committing the same violations.

An employer never forfeits its right to terminate an employee. However, it is best to terminate an employee as soon as reasonably possible, especially if the termination is based on a particular event or occurrence tied to the employee. The longer an employer waits, the justification to terminate becomes weaker and the employee’s argument that it was truly for a different and unlawful reason may become stronger.

CA: There is no requirement in California for how the termination must be delivered to the employee.

NY: Yes, New York employers must give written notice of the exact date of termination to any employee terminated from employment, as well as the exact date of the cancellation of the employee benefits connected with termination. Such notice must be provided no later than five working days after the date of termination. An employer that fails to give the required notice of termination of health or accident insurance is subject to a civil penalty of up to $5,000, and can be sued by the terminated employee for “appropriate” damages.

No, as long as the individual providing notice of termination has internal authorization then that is sufficient.

CA: There are no formal procedures required for a termination to be valid. However, there are several requirements that must be followed immediately, or shortly after, the termination depending on the employee’s pay structure and benefits. When an employee is terminated, the employer must pay all wages earned and unpaid immediately to the employee, including any benefits compensation they are entitled to such as unused vacation.  Please contact an attorney as to the specific requirement for final pay upon termination. Failure to provide accurate and timely pay upon termination may result in significant daily penalties.

NY: Yes, New York employers must give written notice to terminated employee within five working days after the date of termination. The written notice must provide the exact date of the termination and the exact date of the cancelled employee benefits. If the employer fails to give the required notice, they will be subject to a penalty of up to $5,000 and can be sued by the employee for “appropriate” damages.

Following the termination, the employer must pay the wages due to the employee no later than the next regular payday following the termination. For termination purposes, “wages” do not include supplements such as welfare benefits, vacation, separation or holiday pay.

No.

Generally, there is no employee representative body that needs to be dealt with before terminating an employee. In the case of terminating a union worker, there may be special consulting requirements before a termination can be made, but those would depend on the specific collective bargaining agreement (CBA) that was negotiated between the union and the employer. It is highly recommended that in the case of Union workers, you consult with a specialized attorney before termination.