Court's labor ruling averts possible catastrophe

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John O'Connor
John O'Connor

A recent labor law ruling by Virginia's highest court should have most senior living operators breathing a bit easier. That's because an alternate decision could have launched a mountain of new wrongful-termination lawsuits.

The case in question involves a worker who had been with a real estate firm for 17 years. As she did not have an employment contract, her employment status was considered “at-will.” But when her employer fired her without advance notice, she took legal action.

One reason may be that the same court had earlier determined that a notice to an employee must be reasonable, without actually laying out what “reasonable” actually means, or whether it should also include advance warning.

Smart justices that they are, the judges opted not to tackle that omission head on. Instead, they noted that at-will employment means “maximum flexibility to an employer and an employee.”

The bottom line: “reasonable notice” simply means effective notice that the employee has been terminated, and does not require advance notice. The justices also noted that a contrary ruling would surely have encouraged more litigation.

And that alone is why the decision should offer relief to operators in every at-will state. For those of you keeping score at home, at-will employment rules are in effect in every state but Montana.

Can you imagine how many lawsuits would be filed if an advance notice requirement was instituted? Or if other requirements had been put in place? It's a fairly safe bet that boatloads of disgruntled ex-employees might be calling one of those afternoon TV law firms for advice.

As a general guide, at-will means that an employer can fire an employee at any time for any reason, except an illegal one, or for no reason without incurring legal liability. Similarly, an employee is free to leave a job at any time for any or no reason with no adverse legal consequences. The courts have carved out three general exceptions over the years: public policy, implied contract, and implied covenant of good faith.

Barring an illegal reason or one of the exceptions, you can tell a worker that his or her employment is terminated and that he or she must leave today. Similarly, it's okay for an employee to say she or he quits and is leaving now, without any obligation to perform additional duties.

Sounds rather fierce, but them's the rules.

But as a practical matter, it's probably best for employers to consider the totality of the situation. If a termination is performance related, you may want to try to remedy the deficits first, along with a warning that termination will happen if performance does not improve.

There's also a political element to keep in mind. Put another way, people talk. A take-no-prisoners approach may be efficient, but it won't do much for your reputation among possible applicants.

John O'Connor is editorial director of McKnight's Senior Living. Email him atjohn.oconnor@mcknights.com.

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