David Walsh
EMPLOYMENT LAW FOR
HUMAN RESOURCE
PRACTICE, 5E
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Terminating Individual Employees
Chapter 18
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service or otherwise on a password-protected website for classroom use.
Chapter Outline
Determining Whether a Termination Has
Occurred: Constructive Discharge
 Employment at Will with Exceptions
 Impermissible Grounds for Termination
 Just Cause/Due Process
 Handling Terminations

© 2015 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or
service or otherwise on a password-protected website for classroom use.
Terminating Individual Employees
(1 of 3)
For an employee, the loss of a job can be lifealtering, affecting his ability to care for himself
and his family, damaging career prospects, and
damaging self-esteem
 For an employer, the undertaking is stressful,
sometimes dangerous, and apt to prompt legal
actions
 Terminations are more likely than any other
human resource action to result in legal claims

© 2015 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or
service or otherwise on a password-protected website for classroom use.
Terminating Individual Employees
(2 of 3)
The legal standards governing termination differ
greatly for public sector employees, employees
who are members of a union, and private sector
employees
 Most of this chapter deals with private sector,
non-union employees, the standard for which
may be called employment at will with
exceptions
 The general term usually used is employment at
will, but this is not technically correct

© 2015 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or
service or otherwise on a password-protected website for classroom use.
Terminating Individual Employees
(3 of 3)
For unionized and public sector employees, the
more stringent standard of “just cause/due
process” controls
 Legal standards differ for terminations of
individual employees, than for terminations of
groups of employees because of downsizings and
the like

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service or otherwise on a password-protected website for classroom use.
Terminating Individual Employees…Constructive Discharge
Disputes over whether an employee quit or
was fired are common
 If the employee truly resigned, he has no
grounds to sue for wrongful termination
 But employers cannot avoid the legal
consequences of terminations by effectively, but
not officially, discharging employees (essentially,
forcing them out)

◦ A quit is a termination when an employer creates
intolerable working conditions with the intention of
forcing an employee to quit - a constructive
discharge – and a reasonable person would have felt
compelled to quit
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service or otherwise on a password-protected website for classroom use.
Employment at Will with
Exceptions

Employment at will
◦ Existed prior to 1937
◦ There was no such thing as wrongful termination

Employment at will with exceptions
◦ An employer may terminate an employee for any
reason except prohibited reasons (exceptions)
developed by statute or common law since 1937
◦ Applies to a significant majority of the workforce

Just cause/due process
◦ Employers bear the burden of proving that
terminations were proper and based on good reasons
◦ Applies to about 20% of workforce
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service or otherwise on a password-protected website for classroom use.
Impermissible Grounds for
Termination (1 of 2)

Legal protections for wrongful discharge may
arise from these sources:
◦ Constitutional
◦ Statutory
◦ Common law
 contractual
 tort claims

Some protections are available only to public
sector employees, union employees, or
employees with individual employment contracts
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service or otherwise on a password-protected website for classroom use.
Impermissible Grounds for
Termination (2 of 2)
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service or otherwise on a password-protected website for classroom use.
Impermissible Grounds…
Breach of an implied contract (1 of 7)
Professional athletes, high-level managers and
entertainers have express contracts of
employment, negotiated, executed in writing and
signed
 But most employees do not have express
contracts; they are employed at will
 However, under the implied contract
exception to employment at will, the right of
employers to terminate at will can be limited

◦ Written or oral statements by employers, and their
course of conduct in dealing with employees, can give
rise to an implied contract
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service or otherwise on a password-protected website for classroom use.
Impermissible Grounds…
Breach of an implied contract (2 of 7)

Criteria for Determining the Existence of an Implied
Contract
◦ A specific promise was made
◦ The promise was made frequently and
consistently
◦ The source of the promise was someone with
authority to offer it
◦ The promise was communicated to the
employee
◦ The promise was not highly conditional
◦ The employer’s entire “course of conduct” was
consistent with the promise
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Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product
or service or otherwise on a password-protected website for classroom use.
Impermissible Grounds…
Breach of an implied contract (3 of 7)

Criteria for Determining the Existence of an Implied
Contract (cont.)
◦ There was an exhaustive listing of
dischargeable offenses in a handbook, and the
offense for which the employee was fired was
not in that list
◦ A change to a less-protective policy was not
communicated to employees
◦ There was no effective disclaimer
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Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product
or service or otherwise on a password-protected website for classroom use.
Impermissible Grounds…
Breach of an implied contract (4 of 7)

Criteria for Determining the Existence of an Implied
Contract (cont.)
◦ Many courts permit employers to unilaterally
make changes to handbooks containing implied
contracts provided employees are given
reasonable notice, but some require more
 The Arizona Supreme Court held that providing new
handbooks alone is not legally adequate, and
employees must be specifically informed of any new
terms, made aware of their effect on the preexisting
contract, and affirmatively consent to the
modifications
 Modifications must be supported by separate
consideration
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Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product
or service or otherwise on a password-protected website for classroom use.
Impermissible Grounds…
Breach of an implied contract (5 of 7)
Effect of Disclaimers
 Disclaimers are written statements in
employment documents that deny that those
statements create any contractual rights binding
on the employer
 Recommended: To maintain employment at will,
employers should use disclaimers in employee
handbooks and other employment documents

◦ Disclaimers should be communicated to employees
and employees should acknowledge receipt in writing
◦ But disclaimers are not foolproof
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Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product
or service or otherwise on a password-protected website for classroom use.
Impermissible Grounds…
Breach of an implied contract (6 of 7)
Other Contract-Related Claims
 Courts have long read into contracts an implied
covenant of good faith and fair dealing
 Bad faith terminations that deny employees the
benefits of their contractual employment
relationship give rise to this claim
 Promissory estoppel requires a reasonable
and detrimental reliance on a clear promise

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Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product
or service or otherwise on a password-protected website for classroom use.
Impermissible Grounds…
Breach of an implied contract (7 of 7)
Other Contract-Related Claims
 Intentional interference with a contractual
relationship occurs when intentional, improper
interference causes a third party:

◦ to breach its contract with plaintiff or
◦ To not enter into a contractual relationship with the
plaintiff (interference with prospective business
advantage)

Cases where a former employee is blacklisted to
prevent him from obtaining other employment
fit this requirement
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Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product
or service or otherwise on a password-protected website for classroom use.
Impermissible Grounds…
Retaliation … Public Policy (1 of 3)
Public Policy Exception to Employment at Will
 Employees are also citizens with rights and
duties in the larger society
 Employers occasionally want their employees to
act in ways that are contrary to the public good
 Under the public policy exception to
employment at will, employers are liable for
wrongful discharge when they terminate
employees for taking actions that public policy
requires or commends

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Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product
or service or otherwise on a password-protected website for classroom use.
Impermissible Grounds…
Retaliation … Public Policy (2 of 3)
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Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product
or service or otherwise on a password-protected website for classroom use.
Impermissible Grounds…
Retaliation … Public Policy (3 of 3)
Public Policy Exception to Employment at Will (cont.)
Four kinds of the public policy exceptions are
recognized; termination for:
1) refusing to commit an illegal act,
2) exercising a legal right,
3) performing a public duty, or
4) reporting illegal activity (whistleblowing)
 Rule: Employers must not terminate employees
for refusing to commit an illegal act, exercising a
legal right, performing an important public duty,
or reporting illegal activities of employers and
their agents


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Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product
or service or otherwise on a password-protected website for classroom use.
Impermissible Grounds…
Whistleblower Protection…(1 of 6)
Most states have whistleblower protection
laws, although some apply only to publicsector employees
 Some whistleblowers are protected under
laws that pertain to specific safety-sensitive
industries (including aviation and nuclear
power)
 A variety of federal environmental laws
incorporate whistleblower protections for
employees reporting environmental
violations by their employers

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Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product
or service or otherwise on a password-protected website for classroom use.
Impermissible Grounds…
Whistleblower Protection…(2 of 6)
Federal government employees are covered by
the federal Whistleblower Protection Act
(WPA)
 The WPA prohibits taking or failing to take a
personnel action because an employee or
applicant has disclosed information that is
reasonably believed to show:

◦ 1) A violation of a law, rule, or regulation; or
◦ 2) Gross mismanagement, gross waste of funds, abuse
of authority, or a substantial and specific danger to
public health or safety
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Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product
or service or otherwise on a password-protected website for classroom use.
Impermissible Grounds…
Whistleblower Protection…(3 of 6)
The False Claims Act applies to those who
report a knowingly false or fraudulent claim
made against the federal government
 The law allows the Department of Justice to join
in suits to recover the amounts lost through
fraud and individuals to sue on behalf of the
government
 The Act allows recovery of 3 times the actual
damages to the government with 15-30% going
to the person initiating the action

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Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product
or service or otherwise on a password-protected website for classroom use.
Impermissible Grounds…
Whistleblower Protection…(4 of 6)
Civic Duty Laws
 A number of statutes protect employees against
discharge for engaging in specific civic duties

◦ Jury System Improvements Act prevents employers
from firing permanent employees because of their
service on federal court juries
◦ USERRA grants extensive reinstatement rights and
some protection from firing for employees who have
served or are serving in the military
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Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product
or service or otherwise on a password-protected website for classroom use.
Impermissible Grounds…
Whistleblower Protection…(5 of 6)
Antiretaliation & Noninterference, Other Laws
 Most statutes discussed in this text contain
protections against retaliation
 Generally, employees who file charges, give
testimony, and take other actions involved in
enforcing those laws are protected
 Several statutes also prohibit terminations that
effectively interfere with or restrain employees
in the exercise of their statutory rights

◦ Example: FMLA
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Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product
or service or otherwise on a password-protected website for classroom use.
Impermissible Grounds…
Whistleblower Protection…(6 of 6)
Off-Duty Conduct Laws
 Most employees believe that their personal lives
off the job are none of their employer’s business,
and should not affect their employment status
 This view is not shared by their employers
 About half of the states have off-duty conduct
laws protecting an employee’s autonomy off the
job, but these are generally limited to protecting
employees’ off-duty use of tobacco and other
lawful products

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Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product
or service or otherwise on a password-protected website for classroom use.
Discriminatory Termination (1 of 2)
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service or otherwise on a password-protected website for classroom use.
Discriminatory Termination (2 of 2)
Courts differ in terms of how strictly
comparable the situations of employees must be
to show that they are similarly situated to
serve as evidence of disparate treatment
 Rule: One of the best ways to avoid
discriminatory terminations is to enforce policies
in a consistent manner, treating like situations in
a like manner, regardless of the individuals
involved

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service or otherwise on a password-protected website for classroom use.
Just Cause/Due Process –
Unionized Employees (1 of 12)
Most employees are governed by the doctrine of
employment at will with exceptions
 A stronger standard is just cause /due process
 Generally, terminations of employees who are
unionized, work for government agencies, reside
in Montana, or have written contracts of
employment must meet a just cause/due process
standard

◦ Under this standard, employers bear the burden of
showing that they had good reasons for their
termination decisions and followed reasonable
procedures
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service or otherwise on a password-protected website for classroom use.
Just Cause/Due Process –
Unionized Employees (2 of 12)

The legal status of unionized employees derives
from language in labor agreements that limits
discipline and discharge to situations in which
there is just cause
◦ Almost all labor agreements include grievance and
arbitration procedures to challenge discipline and
discharge decisions
◦ Determinations as to whether unionized employees
have been terminated for just cause are made by
arbitrators rather than courts
◦ Arbitrators have broad authority; if an arbitrator
decides that a discharge was not for just cause, the
arbitrator can overturn the decision or modify it
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service or otherwise on a password-protected website for classroom use.
Just Cause/Due Process –
Unionized Employees (3 of 12)

Arbitrators consider these factors:
◦ Was there a rule or standard prohibiting the behavior
that was engaged in by the employee?
◦ Was the rule or standard clearly communicated to
employees?
◦ Is the rule or standard a reasonable one?
◦ Has the rule or standard been consistently enforced?
◦ Was the employee afforded due process?
◦ Is there sufficient proof that a rule was violated?
◦ Was progressive discipline applied?
◦ Was the discipline commensurate with the offense?
◦ Are there any factors calling for imposition of a lesser
penalty?
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service or otherwise on a password-protected website for classroom use.
Just Cause/Due Process –
Unionized Employees (4 of 12)
Grievance procedures and arbitration provide
for substantial due process following
termination
 Arbitrators typically require that due process be
present before termination decisions are made
 Arbitrators expect to see progressive
discipline, in which the first violation is met
with a warning or other mild discipline,
subsequent offenses receive progressively more
severe discipline, and finally, discharge

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service or otherwise on a password-protected website for classroom use.
Just Cause/Due Process –
Public Employees (5 of 12)
A number of legal protections converge to
general remove public employees from
employment at will
 Public employees are more likely to have union
representation and to be protect by “just cause”
language in labor agreements
 Public employees also enjoy civil service and
tenure laws, and constitutional protections
requiring due process, free speech and
associational rights

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service or otherwise on a password-protected website for classroom use.
Just Cause/Due Process –
Civil Service & Tenure Laws (6 of 12)
Most governmental bodies have civil service
laws, designed to insure that employment
decisions are not based on politics, but on merit.
 Teachers and professors in public schools and
universities sometimes enjoy the protection of
tenure laws, designed to protect the central
purposes of academic life:

◦ to raise questions,
◦ express controversial ideas,
◦ and pursue the truth wherever it leads

Increasingly, tenure is being challenged
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service or otherwise on a password-protected website for classroom use.
Just Cause/Due Process –
Constitutional Protections (7 of 12)

Public employees are protected from
wrongful termination by:
◦ The due process rights in property and liberty
afforded by the 5th and 14th Amendments to
the U.S. Constitution, and
◦ The freedoms of speech, religion and
association afforded by the 1st Amendment to
the U.S. Constitution
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service or otherwise on a password-protected website for classroom use.
Just Cause/Due Process –
Constitutional Protections (8 of 12)
Property & Liberty Interests in the Job: Due
Process
 Public employees can be said to hold a
property interest in their jobs
 Public employees are also sometimes
deemed to have a liberty interest that is
jeopardized through termination

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service or otherwise on a password-protected website for classroom use.
Just Cause/Due Process –
Constitutional Protections (9 of 12)

Property & Liberty Interests in the Job: Due
Process
Public employers owe their employees due
process, pre-termination and post-termination.
 Prior to termination, a hearing must be held that
provides public employees with

◦ notice of the charges against them,
◦ explanation of the evidence, and
◦ opportunity to present their side of the story

Following termination, a more elaborate hearing
with opportunities to confront witnesses and
present evidence is required if requested
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service or otherwise on a password-protected website for classroom use.
Just Cause/Due Process –
Constitutional Protections (10 of 12)

Substantive Constitutional Rights
Under the First Amendment, public employees
have rights like other citizens to freedoms of
religion, speech, and association
 But constitutional free speech protection against
termination is afforded only to a public employee
who is speaking as a citizen on matters of
public concern, and not as an employee
 Termination or other disciplinary action should be
imposed only when the exercise of these rights
clearly interferes with an employee’s ability to do
his job or with accomplishment of the public
agency’s mission

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service or otherwise on a password-protected website for classroom use.
Just Cause/Due Process –
Constitutional Protections (11 of 12)
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service or otherwise on a password-protected website for classroom use.
Just Cause/Due Process –
Montana WDEA (12 of 12)
The Montana Wrongful Discharge From
Employment Act (WDEA) eliminated
employment at will in Montana
 The Act provides that a discharge is wrongful if:
1. It was in retaliation for an employee’s
refusal to violate public policy or for reporting a
violation of public policy
2. The discharge was not for good cause, and
the employee had completed the employer’s
probationary period
3. The employer violated the express
provisions of its own written personnel policy

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service or otherwise on a password-protected website for classroom use.
Handling Terminations (1 of 7)
Employers should consider alternatives to
termination, including retraining, transferring,
demoting, suspending, and signing last-chance
agreements
 The option of resignation is best pursued when
there are growing concerns about the
performance or conduct of an employee, but a
termination is not yet imminent
 Resignations should be documented in writing
and stipulate the voluntary nature of the
resignation

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service or otherwise on a password-protected website for classroom use.
Handling Terminations (2 of 7)
Termination decisions should receive careful
higher level review
 Employees should be placed on administrative
leave if circumstances warrant their removal
prior to completion of an investigation or
proper review of a termination decision.
 The reasons for termination decisions and the
process followed should be solidly documented.
 These materials should be in writing, should be
produced prior to the termination decision, and
should support the decision to terminate.

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service or otherwise on a password-protected website for classroom use.
Handling Terminations (3 of 7)
Employers should provide employees with a
clear and succinct statement of the reason(s) for
their termination
 Employers should generally avoid making public
statements about terminated employees and the
reason for their termination
 Discharges should be handled in a reasonable,
dignified manner

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service or otherwise on a password-protected website for classroom use.
Handling Terminations (4 of 7)
Unless there are compelling security concerns,
terminated employees should be allowed a
reasonable amount of time to clear out their
offices and take care of other business, rather
than be ushered out of the workplace
 Final wages should be paid quickly and within any
period provided for under state law
 Unless termination is for gross misconduct,
terminated employees should be notified of their
right to health insurance coverage under
COBRA

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service or otherwise on a password-protected website for classroom use.
Handling Terminations (5 of 7)
Employers should consider offering severance
pay in exchange for releases of legal claims
related to terminations
 For employees over 40, compliance with the Age
Discrimination in Employment Act (ADEA),

requires very specific provisions, if waivers of ADEA
claims are to be held valid:
1) Waivers must be plainly worded, written
agreements that specifically reference the ADEA and
suggest consultation with a lawyer prior to acceptance;
2) Legal consideration must be provided for
acceptance;
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service or otherwise on a password-protected website for classroom use.
Handling Terminations (6 of 7)
Employers should consider offering severance
pay in exchange for releases of legal claims
related to terminations
 For employees over 40, compliance with the Age
Discrimination in Employment Act (ADEA),

requires very specific provisions, if waivers of ADEA
claims are to be held valid:
1) Waivers must be plainly worded, written
agreements that specifically reference the ADEA and
suggest consultation with a lawyer prior to acceptance;
2) Legal consideration must be provided for
acceptance;
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service or otherwise on a password-protected website for classroom use.
Handling Terminations (7 of 7)

ADEA Compliance (cont.)
3) Employees must be given at least 21 days to
consider waivers (45 days for group early
retirement offers); and
4) Waiver agreements do not become final—and
can be revoked by the employee - until 7 days after
acceptance
Only claims that arose prior to the date of the
waiver can be waived
 If these requirements are not met, the waiver is
unenforceable and any severance payments or other
consideration provided to support the agreement are
not recoverable by the Employer

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service or otherwise on a password-protected website for classroom use.
What Would You Do?

Your father, whose business you have been working in
since you graduated from college, has passed away.
Ownership and management of the company are now
yours.Your father founded the firm and built it largely
based on his personal relationships with his employees.
One of these employees, Mel, has just asked whether
you knew about your father’s promise to him for the
sacrifice he made. Ten years ago, at your father’s urging,
he turned down an offer from another firm for
substantially more money and a higher position in
exchange for the promise of lifetime employment. It
sounds just like the sort of thing your father would do.
Mel has been in sales with the firm for 40 years, but his
performance has slipped and he was one of the people
you had planned to let go. What would you do?
© 2015 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or
service or otherwise on a password-protected website for classroom use.
Next:

Chapter 19– Downsizing and Posttermination Issues
◦ In order to downsize and consolidate, you’re
going to have to close one of your two
manufacturing plants, each of which employs
150 people. What must you do?
◦ When downsizing, how do you avoid legal
claims?

The answers to these questions and more
are next.
© 2015 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or
service or otherwise on a password-protected website for classroom use.