An employment relationship that isn’t covered by a written contract or collective bargaining agreement is known as “at-will” employment. An at-will employment relationship may be voluntarily severed by the employer or the employee at any time, for any reason.
While it’s considered poor form for an employer to terminate an employee for no reason, the practice isn’t illegal. As long as the employer doesn’t violate any applicable civil rights or employment laws, the company is free to terminate employees without reason or cause.
At-Will Employment Law
In the state of Arizona, at-will employment law is dictated by ARS 23-1501. According to the law, the employment relationship is severable at the pleasure of either the employer or the employee unless a written contract applies. For a contract to be binding, one of the following conditions must apply:
- Both parties have signed the written contract
- The employer has a written contract set forth in the employment handbook or manual
- The employer has distributed a document to the employee that expresses the intent that it is a contract of employment
- A written contract is set forth in writing and signed by the party to be charged
While most private-sector employees in Arizona are considered at-will employees, there are a number of situations where at-will laws don’t apply. In addition to the exclusion of employees who have a written contract (which we just discussed), the following classes are exempt from at-will employment laws:
- State and local employees (public employees are protected by the Arizona Constitution and other state/local laws)
- Employees and employers who are governed by a collective bargaining agreement
Note that employees who are subject to an employment contract or collective bargaining agreement cannot be terminated due to partial performance. While partial performance can be a factor in termination, the law clearly states that it cannot be deemed sufficient to eliminate the requirements in ARS 23-1501.
Although at-will employment laws leave a lot of leeway for employers to terminate employees, there are a number of federal, state, and local employment laws that take precedence. Generally speaking, employers are prohibited from terminating employees based on discrimination, whistleblowing, collecting worker’s compensation, or using qualified unpaid leave.
If any of these are a factor in an employee’s termination, the employer may be subject to a federal and/or state investigation, penalties, and civil action from the employee.
State and federal laws prohibit employers from discriminating against employees and job applicants on the basis of race, color, religion, gender, age (over 40), disability, national origin, or pregnancy. Most of these laws only apply to companies that have 15 or more employees, though companies of any size are subject to civil lawsuits from wrongfully terminated employees.
Some local governments have passed ordinances prohibiting other types of discrimination. For example, the cities of Phoenix and Tucson both prohibit discrimination on the basis of marital status, sexual orientation, and gender identity or expression. In addition, Tucson prohibits discrimination on the basis of familial status.
If you are wrongfully terminated by your employer due to discrimination, you have three options to seek a legal remedy:
- File a complaint with the EEOC – the US Equal Employment Opportunity Commission is the federal agency charged with enforcing against discrimination in the workplace. If you file a complaint with the EEOC, the agency will interview you to determine if you have a case, launch an investigation into your employer, and seek restitution on your behalf.
- File a complaint with the ACRD – the Civil Rights Division of the Arizona Attorney General’s Office is the state-level entity that handles complaints of discrimination in the workplace. Similar to the EEOC, the CRD can launch an investigation and seek restitution on your behalf.
- File a civil lawsuit in state and/or federal court – state and federal employment laws provide employees with the right to seek damages from employers through civil lawsuits. Depending on the nature of your case, you may be required to file a complaint with the appropriate regulatory agency before filing your civil lawsuit.
There are a number of federal laws that protect employees against employer retaliation. Generally speaking, employees who engage in “protected activities” such as filing a complaint, participating in an investigation, or filing a lawsuit against the employer, cannot be terminated in retaliation for their involvement in the protected activities.
Employees who directly report suspected wrongful conduct by the employer in good faith to the appropriate authorities inside or outside the company are known as whistleblowers. Being a whistleblower is considered a protected activity, and as such employers are prohibited from terminating a whistleblower in retaliation for their protected activities.
If you have been terminated in retaliation for your participation in protected activities, you can file a complaint with the appropriate regulatory agency:
- The US Equal Employment Opportunity Commission – the EEOC handles retaliation complaints related to discrimination, equal pay, and employees with disabilities
- The Department of Labor’s Wage & Hour Division – the WHD handles retaliation complaints related to employee wages and qualified use of family medical leave
- The Occupational Safety and Health Administration – the OSHA handles retaliation complaints related to workplace safety and health
What to do if you are wrongfully terminated
If you believe you have been wrongfully terminated, you should consult with an experienced employment law attorney as soon as possible. State and federal regulatory agencies have strict statutes of limitations on how long you have to file a complaint against your employer, and the courts allow up to one year to file a civil action for wrongful termination.
When you meet with your attorney, he or she will assess whether your case is eligible for a wrongful termination lawsuit under the following circumstances:
- Were you terminated in violation of a written employment contract or collective bargaining agreement?
- Were you terminated due to discriminatory reasons? If so, has the EEOC or ACRD issued you a “right to sue” letter?
- Were you terminated in retaliation for participation in protected activities, whistleblowing, or exercising statutory or public obligations (e.g. victim’s leave, military, jury duty, voting, workers compensation, etc.)
- If you’re an employee of a federal, state, or local government entity, did the public employer violate any specific rights granted to public sector employees by the US Constitution, Arizona Constitution, state statutes, government contracts, or other government regulations?
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.