Does an Employer Have to Give Reason for Termination?

Introduction

In every state except Montana, employment is considered “at-will.” Under at-will employment law, employees have the right to quit at any time, for any reason, and employers have the right to terminate employees at any time, for any reason that isn’t discriminatory or retaliatory. Employees are under no obligation to provide any notice or explanation for their quitting, and employers are given the same leeway. It’s common for some companies to provide a “service letter” when terminating employees, but employers are not required to give a reason for terminating an employee.

Service letters

Service letters are issued by employers to document when and why an employee is terminated. Some states require service letters, but the state of Arizona does not. Some employers in Arizona elect to provide service letters, but the practice is entirely voluntary and is not required by state or federal law.

Final paychecks

When an employee quits their job, the employer is required to issue their final paycheck on the next scheduled payday. Employees who are terminated or laid off should receive their final paycheck on the next scheduled payday or within seven days, whichever is sooner. Employers have the right to withhold any portion of the final paycheck that is subject to a reasonable dispute, as long as the action is taken in good faith, is not retaliatory, and is resolved as soon as possible.

Reasonable disputes can include an employer’s right to reimbursement for stolen property, damaged property, and misused business assets (e.g. paying for personal expenses with a company credit card). The employer is only allowed to withhold the portion of the final paycheck that corresponds to the disputed amount, though.

Wrongful termination

While at-will employment laws give employers a lot of leeway when it comes to lawfully terminating an employee, there are a handful of circumstances that are prohibited by state and federal law. Specifically, there are four situations that qualify for wrongful termination:

• Discrimination – Title VII of the Civil Rights Act (Title VII) prohibits employers from terminating employees on the basis of race, color, national origin, gender, and religion. The Pregnancy Discrimination Act—an amendment to the Civil Rights Act—prohibits terminating an employee because they are pregnant or due to maternal health issues after their child’s birth. The Americans with Disabilities Act (ADA) prohibits terminating an employee based on their actual, perceived, or prior disability. The Age Discrimination in Employment Act (ADEA) prohibits terminating an employee because they are over 40-years-old. State laws also prohibit terminating an employee based on their sexual orientation, marital status, or gender identity.
• Retaliation – employees have the right to file a complaint, participate in an investigation, and participate in a civil suit without fear of being terminated in retaliation for their actions. That includes complaints of discrimination under the previously discussed federal laws, complaints of unfair pay or child labor infractions under the Fair Labor Standards Act (FLSA), and filing a complaint under the Occupational Safety & Health Act (OSH Act). Employers can’t terminate employees in retaliation for requesting reasonable accommodations for their disability or religious practices. Finally, the Equal Pay Act (EPA) prohibits employers from firing an employee for asking coworkers about their pay, as long as the employee suspected discriminative pay and was asking in good faith to uncover unequal pay.
• Breach of contract – employees that have a signed employment contract or a collective bargaining agreement can only be terminated under the terms of the contract. If an employer terminates an employee contrary to the terms of the contract, the employer is guilty of a breach of contract.
• Exercising legal rights – employers can’t retaliate against an employee for exercising their legal rights. The most common example of this is when an terminates an employee in retaliation for using or applying unpaid leave under the Family and Medical Leave Act (FMLA). Other examples include terminating an employee for exercising their right to vote, or for refusing to accept an order that would cause the employee to break the law.

How to file a complaint for wrongful termination

If you have been wrongfully terminated by your employer, the first step is to file a formal complaint with the appropriate government agency. Depending on which state or federal law was broken in the course of your wrongful termination, you can file a complaint with the following agencies:

• Equal Employment Opportunity Commission (EEOC) – the EEOC is the federal agency that is tasked with enforcing workplace discrimination laws (notably Title VII, the ADA, ADEA, and EPA). If you have been terminated because of your race, color, national origin, gender, religion, pregnancy, age, or disability, you can file a complaint on their website, here.
• Department of Labor, Wage and Hour Division (WHD) – the WHD handles complaints of unfair pay and child labor infractions under the FLSA, and cases of retaliation under the FMLA. If you have been terminated in retaliation for filing or participating in an unpaid wage claim, you can file a complaint on their website, here.
• Department of Labor, Occupational Safety and Health Administration (OSHA) – the OSHA is the federal agency in charge of enforcing workplace safety laws and conducting safety inspections. If you have been terminated in retaliation for requesting a safety inspection or filing a complaint of unsafe working conditions, you can file a complaint on their website, here.
• Industrial Commission of Arizona (ICA) – if you have been terminated in retaliation for filing a complaint with the state of Arizona for unsafe work conditions or unpaid wages, you can file a whistleblower complaint with the ICA.
• Arizona Attorney General’s Office, Civil Rights Division (CRD) – when it comes to discriminatory termination, you can file a federal and/or state complaint. If you choose to file a complaint with the state, the Attorney General Office’s Civil Rights Division will investigate your employer for civil rights infractions.

Civil action for wrongful termination

In addition to filing a complaint and participating in the agency’s ensuing investigation, you have the right to seek compensation for damages from your employer via a civil lawsuit. If you have been wrongfully terminated, you should speak with an employment law attorney ASAP to assess your case, calculate your expected damages, and decide on the best course of action. There are several statutes of limitations that dictate how long you have to file a wrongful termination suit or complaint, with some of them being as short as 30 days (180 days is the average).

Need Help With An Employment Law Issue?

The state of Arizona is a great place to live and work, but knowing the employment laws will help you a lot. Whether you are a newcomer to the state or a lifelong resident, understanding your workplace protections is good for your career, and the more you know, the better.

Employment law issues can cause extreme distress and can affect productivity on the job. If you are being harassed at work, or dealing with any other employment issue, consider talking to our AZ employment law team to help you settle your case.

Call our Employment Law team at (480) 464-1111 to discuss your case today.