Tag: severance pay

Employment Terminations in New York Cover Slide

Employment Terminations in New York (Webinar Recap)

On June 15, 2023, I presented a complimentary webinar entitled “Employment Terminations in New York”. For those who couldn’t attend the live webinar, I’m happy to make it available for you to watch at your convenience.

In the webinar, I discuss:

  • At-Will Employment
  • Notice & Procedures
  • Unemployment Claims
  • Severance Pay

and much more!

At-will employment is still the default for most New York employees, but it doesn’t give employers unfettered discretion to let workers go. Termination decisions can require consideration of various statutory, contractual, and policy issues. Ignoring relevant parameters can lead to messy breakups and costly disputes.

Don’t have time to watch the whole webinar right now? Click here to download the slides from the webinar.

Why You Should Watch “Employment Terminations in New York”

If you’re involved in deciding to remove employees from your organization, then it’s worth reviewing the potential legal hurdles and implications.

Especially in New York, employment laws continue to evolve, primarily to provide employees with greater workplace protections. Running afoul of these standards when letting employees go could lead to employment discrimination claims or other legal headaches.

Even if the decision to separate an employee from your company is valid, there are logistical obligations to follow through on. For example, New York employers must provide separated employees with written notice of their termination date and information regarding employee benefits. And, if you want to offer severance pay in exchange for a release of claims, there are additional documentary requirements. Employers who make large employment reductions may also need to comply with state of federal WARN Act requirements.

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Pregnant Employee

Calling Your Employment Lawyer — Pregnant Employee

I’ve been counseling employers for almost 14 years. One thing that’s become clear over that time is that no one wants to have to call their employment lawyer! But the truth is many companies would be better off if they called more often. It’s usually much cheaper to find out the law and best approach to an employment situation before it leads to litigation or other disputes. This is definitely true when you’re dealing with a complex scenario involving a pregnant employee, for example.

So, what does a call with an employment lawyer sound like?

My actual conversations with clients are confidential, of course. But I can summarize the tone from 1000s I’ve had over the years by way of example. The facts and circumstances of this scenario involving a pregnant employee are purely hypothetical and should not be followed as guidance for any actual situation. Most likely, I would have more background information about the employer before taking this call. Local and state laws also vary and could alter any legal considerations.

“We Have This Employee. . . .”

Client: “Hi, Scott.”

Lawyer: “Hi. How are you? Oh, I know, you’d be better off if you weren’t calling me.”

Client: “Well, nothing personal.”

Lawyer: “No, I get it. None of my clients ever want to be speaking to me about work. It’s the nature of my business. Anyway, how can I help?

Client: “We have this employee. She’s not really working out. She’d had performance issues for a while, and we’d like to move on . . . . But . . . .”

Lawyer: “Yeah, there’s always a ‘But’!”

“She’s Pregnant”

Client: “Afraid so, or I wouldn’t be calling. Before we had a chance to do anything about her performance issues, she told us last week she’s pregnant.”

Lawyer: “I see, well congratulations to her, but you’re worried about trying to let a pregnant employee go?”

Client: “Yes, but, that’s not everything. She had also filed a harassment claim against a co-worker a few months back. And she’s still angry that we didn’t fire the guy she filed it against.”

Lawyer: “Alright. Let’s try to work through this. First, how long has she been working there?”

Client: “Only nine months. She’s our receptionist and also does some of our social media.”

Lawyer: “So, she’s not FMLA eligible yet, but might be eligible for New York Paid Family Leave. Is she full-time?

Client: “Yeah, she works 40 hours. At least, she’s supposed to be working. She spends most of her time on Facebook.”

Lawyer: “You mean doing personal things, not managing the company’s social media.”

Client: “Right. But that’s not the real problem. We should do a better job of policing that and re-directing her. But the bigger problem is that she also answers phones and greets people who come into the office. But her personality is hit or miss. She’s not rude, exactly, but not always friendly either. Plus, she gets messages wrong, forgets to pass them along, etc. We’ve had a few complaints since she started.”

Lawyer: “Has she said when the baby is due?”

Client: “About 3 months from now.”

Lawyer: “So, at that point, she might be eligible for FMLA leave too. Did she get the paperwork on that?”

Client: “Not yet, but that’s one thing we needed direction on. As you know, we have over 50 employees, so we do have people eligible for FMLA. But since she hasn’t been here a year yet, we didn’t know how to handle it.”

Lawyer: “If the leave will begin after she has been there for a year and she meets the other requirements–so if she will have worked 1,250 hours over the past year when her leave starts–then she would qualify for FMLA leave. So you should probably at least give her the FMLA paperwork at this point to avoid a technical violation there.”

Client: “Does that mean we have to keep her on until after her 12 weeks expires?”

Lawyer: “Not necessarily. Even if she becomes eligible for FMLA leave, you don’t have to retain her if you have other legitimate grounds to end her employment. But, of course, it can’t be because of her pregnancy or leave. And even if it isn’t, she could claim it is discriminatory to let her go.”

Client: “So, are we better of waiting until she has the baby and then fire her after she comes back?”

Lawyer: “Not necessarily. That could still be discriminatory or retaliatory.”

“What Should We Do?”

Client: “Okay, you’re the expert. What should we do with her?”

Lawyer: “I know you don’t want to hear it, but like so many of these situations, it depends on various factors and considerations. But it comes down to why you’ve kept her on this long and now want to let her go. If it’s at all related to the pregnancy, then you probably shouldn’t do it. Maybe she’ll take the leave and then not come back, but if she wants to come back, you’d need to let her.”

Client: “We don’t have a problem with her being pregnant. If she were doing her job, we’d be happy to let her take the leave.”

Lawyer: “Then you have to be able to explain why you’re considering letting her go now. Did anything happen recently that’s of particular concern?”

Client: “Remember I mentioned she filed a harassment complaint against a co-worker?”

Lawyer: “Yes. We needed to get back around to that too.”

Client: “Yeah. She claimed a guy who has worked here for 20 years was hitting on her whenever he walked in the building. Now, he’s a salesman who works remotely, so he’s only in a few times a month. She didn’t make any extreme allegations, just that he was too flirty. We investigated it and directed him to stop, and he has.”

Lawyer: “Okay. But has become relevant again?”

Client: “Yes. We need to promote this guy to a director of sales position where he will be in the office full-time. So he’d walk past her every day. Probably multiple times every day. But he refuses to work in the building as long as she’s the receptionist.”

Lawyer: “Is that why you want to let her go now?”

Client: “That’s not the only reason. We know we can’t fire her because the guy she complained about doesn’t want to work in the same building with her. It’s just that we have had these performance issues and they’re not getting better. Eventually, we’d have to let her go. But between the pregnancy and trying to promote the sales guy, we don’t know what the best approach is.”

Lawyer: “Right. I see you’re trying to do the right thing, but there seems like landmines in every direction.”

Client: “Pretty much. So that’s why we called you.”

“Any Alternatives?”

Lawyer: “I understand. Glad you did. Now, let’s see. . . . Just by chance, are there any other open jobs that she might be able to do without the same performance issues?”

Client: “We could try to make her an administrative assistant.”

Lawyer: “But it sounds like she’s already had problems with messages and communication. Would that be a factor in those jobs?”

Client: “Yes. It would just move her from the front desk and maybe solve the problem with the sales guy.”

Lawyer: “I don’t really want you to create new problems in trying to solve this one. If we figured out the right approach, would you consider offering her a severance package?”

Client: “We might be able to pay her a month’s pay and continue her health insurance. I guess that would become an issue for her with the baby and all.”

Lawyer: “Good point. So she’s taking the company’s insurance?”

Client: “Yes. She is. She is married, but they have family coverage through us. He might have it available at work too. I don’t know. Maybe ours is a better deal.”

Lawyer: “Sure. That could be an issue. If he has coverage, then losing yours might not be as bad. But she’s looking at some disability and PFL benefits coming up when she has the baby too if she were still employed. And if he doesn’t have insurance available, they might have to go on COBRA coverage. She would probably get unemployment.”

Client: “Yeah. We wouldn’t contest the unemployment.”

Lawyer: “Okay, how bad has her performance been? Has it gotten any worse lately?”

Client: “It’s just ongoing mistakes. No single recent incident.”

“Severance Package?”

Lawyer: “Alright, overall, I’d say there is some risk of some kind of pregnancy or even retaliation–for the harassment complaint–claim if you fire her now. But that doesn’t necessarily diminish as time goes on. Maybe it would get easier if she does something really bad, but you don’t want that either for operational reasons. Some options include putting her on a formal performance improvement plan and seeing how that plays out or just having a conversation with her now pointing out the performance problems and noting that you have to let her go but will offer a severance package. There’s no perfect solution. If she says no to the severance and you fire her, then she might make a claim.”

Client: “But if she agrees to the severance, then we’d get a release and she couldn’t sue us?”

Lawyer: “Yes, we’d make the severance contingent on her signing a release.”

Client: “Okay, I got it for now. I’ll go back and speak to the managers involved. I’ll probably be giving you another call once we decide how to handle this.”

Lawyer: “Sounds good. I’ll be here. Hopefully, there’s a way to make this work out okay for everyone.”

Client: “Hope so. Thanks.”

 

Some of these calls lead to a straightforward solution. Others, like this hypothetical one, involve balancing risky alternatives. But understanding the risks better allows better decisionmaking and helps avoid obvious missteps.

 

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Fire Bad Employees

Should I Fire Bad Employees or Let Them Quit?

Gary Vaynerchuk is a wildly successful and popular investor, serial entrepreneur, CEO, author, and, well, personality. One of his recent business mantras gives experienced employment lawyers like me pause. Vaynerchuk, or “Gary Vee” as he’s widely known, argues that companies should fire bad employees rather than letting them quit on their own. But is that always the prudent course of action?

In Favor of Firing

As I understand it, Gary Vee emphasizes that employers need to send the right message by firing bad employees before they leave on their own. This shows that the company won’t tolerate inappropriate behavior.

Vaynerchuk consistently promotes a positive workplace atmosphere and collegiality as a hallmark of good business. That’s a hard position to attack. But those aren’t the only aspects of good businesses. They also must offer viable products/services and sell them to customers. Sometimes employees who produce in these areas don’t play well in the sandbox. Vaynerchuk advocates extracting workplace cancers even if they’re top rainmakers or otherwise seem to contribute disproportionately to the firm’s financial success. To him, these positives never justify being a jerk.

So, the argument continues, you have to fire the jerk before the jerk fires you. That’s how you maintain credibility, particularly in the mission to promote a positive and healthy work environment. If you let the jerks leave on their own terms, they win and you lose. They leave behind the impression that the company was willing to tolerate their misbehavior for financial gains. This begets more jerks rather than pleasant co-workers striving to achieve the company’s collective goals in a more or less friendly workplace.

Why You Might Let Them Quit

Many business owners find wisdom in Gary Vee’s “fire them before they fire you” advice. Indeed, it makes a lot of sense from a morale perspective. And workplace morale is a valuable asset.

Why do many employers think it’s a better idea to wait out a bad employee until they leave on their own? Some probably just hate confrontation or at least the unpleasant experience of firing someone. Vaynerchuk seems to empathize with that reality, encouraging employers to work to overcome their reluctance and take difficult actions as soon a necessary. “Hire fast, and fire fast” he preaches, while acknowledging the latter doesn’t come naturally to him either.

But there’s an even deeper counterargument to consider. It lies in employment law. Yes, leave it to lawyers to try to ruin a good thing.

Here are several legal risks employers try to avoid by not firing problematic workers:

Discrimination Claims

What could happen when you fire someone? Well, they could accept it and move on. Or they could become contentious and potentially litigious.

Most people don’t want to be sued. This goes for most business owners and managers as well. And there are just so many laws out there protecting employees these days, including extensive anti-discrimination statutes.

This can filter into the equation when you start to consider how to move on from an employee who isn’t working out. Especially if the employee in question differs from others similarly situated in one or more protected characteristics. Even if you know the employee has to go for legitimate reasons, you might pause to fire the oldest person in a department. Or the only female supervisor. Or someone in a racial minority.

Unemployment

Even when there’s no particular concern of a discrimination claim, some employers would rather an employee quit so they can’t obtain unemployment benefits. The unemployment laws vary by state, but there’s usually some additional cost to employers whose former employees receive unemployment. And employees who quit often aren’t eligible.

Employers can sometimes defeat worker unemployment claims by proving that the employee deserved to be fired. But that’s a risk that some companies would prefer to avoid. So they might prefer to let the employee walk away rather than show them the door.

Severance Pay

Some employees have employment contracts or are eligible for company policies that provide severance pay under certain conditions. Employees are usually more likely to be eligible if they have been let go involuntarily. Or they might receive more severance pay if they are fired (especially, if without “cause”) rather than quitting.

In the United States, at least, this usually depends only on specific company policies and contracts rather than external laws. But there can definitely be a significant financial impact in some cases.

Striking a Balance

The legal risks are real. Some employees might sue after you let them go. And even the prospect that they might can keep you awake at night. Let’s face it, even one employment discrimination suit can prove costly, both in time and potential liability.

But, remember, we’re talking about firing bad employees. Either they’ve treated others disrespectfully, performed poorly, or otherwise failed to live up your expectations. Regardless of race, age, gender, and other factors, you should have defensible grounds to let them go. If you’re not sure about that, then speak with your employment lawyer.

Still, I do worry that the Gary Vee philosophy isn’t problem-free. Some employers could overreact and fire someone too soon without considering all relevant factors.

Perhaps the most important consideration is how have you treated other employees who’ve underwhelmed you? Have you let some slide, but now want to swing a quick axe? Saying “Gary Vee told me to!” won’t necessarily work if you’re now firing an older employee after letting a younger get away with more in the past.

Keep in mind that allowing a bad employee to hang around too long can also lead to legal problems. Harassers may not stop harassing. Aggressive employees could become violent. Sloppy employees could become too sloppy or even dishonest. Sometimes you even have to balance your legal risks. Who’s more likely to sue and what will it cost? HR, like other aspects of your business, isn’t always easy, I’m afraid.

Final Thoughts

You should do what’s right for your business. That includes complying with legal obligations. But beyond that you have options. Generally, I agree, bad employees need to go. But one employer’s nightmare could still be another employer’s treasure . . . perhaps.

 

For more, read 5 Tips for Firing Problem Employees