Alabama Termination Laws

July 11th 2024

In Alabama, employment relationships are predominantly governed by the “at-will” employment doctrine, which allows employers to terminate employees for any reason, or no reason at all, without prior notice. Despite this broad discretion, both federal and state laws impose significant limitations to protect employees from unlawful terminations. Understanding Alabama termination laws is essential for both employers and employees to navigate the complexities of employment termination lawfully.

This article provides a comprehensive overview of the legal framework governing terminations in Alabama, highlighting critical statutes and regulations that ensure fair and lawful employment practices.

This Guide Covers

Legal Considerations for Termination in Alabama
“At-Will” Employment in Alabama
Lawful Termination in Alabama
Legal Protections During Termination in Alabama
Terminated Employee Benefits in Alabama
Layoffs in Alabama
Resignations in Alabama
Legal Cases Related to Wrongful Termination in Alabama

Legal Considerations for Termination in Alabama

Terminating an employee in Alabama involves several legal considerations to ensure federal and state law compliance.

  • “At-Will” Employment Doctrine: Alabama is an “at-will” employment state, meaning employers can terminate employees at any time, for any reason, or for no reason at all, as long as it does not violate specific legal protections.
  • Discrimination Protections: Prohibits termination based on an employee’s race, color, religion, sex, national origin, age, or disability.
  • Retaliation Protections: Employees are protected from retaliation for reporting violations of law, safety concerns, or engaging in other workplace safety violations. It protects public employees who report violations of law or other improper activities.
  • Employee Handbooks and Contracts: Employers should ensure that termination policies in employee handbooks are clear and consistently applied. If an employee has a contract specifying terms of termination, the employer must adhere to those terms.
  • Final Paychecks: Alabama law requires employers to pay terminated employees their final paycheck on the next scheduled payday. This includes all earned wages, overtime, and accrued but unused vacation time if stipulated by company policy.

“At-Will” Employment in Alabama

What is “At-Will” Employment?

“At-will” employment is a term used to describe an employment relationship in which either the employer or the employee can terminate the employment at any time, for any reason, and without notice. This employment doctrine is widely applied in the United States, including Alabama.

What are the Exceptions to “At-Will” Employment in Alabama?

In Alabama, the “at-will” employment doctrine is strongly upheld, and the state does not recognize many of the common exceptions seen in other states.

  • Contractual Agreements: If an employee has a written employment contract that specifies terms of employment and grounds for termination, those terms override the “at-will” doctrine. Such contracts must be explicit and clearly outline the employment conditions and termination procedures.
  • Discrimination: Termination based on race, color, religion, sex, national origin, age (40 or older), disability, or genetic information is prohibited under federal and state laws.
  • Retaliation: Employees cannot be terminated in retaliation for engaging in protected activities, such as filing a discrimination complaint, participating in an investigation of discrimination, or reporting safety violations.
  • Whistleblower Protections: While Alabama does not have specific state whistleblower protection statutes, employees are protected under various federal laws if they report illegal activities, safety violations, or other forms of wrongdoing.

Employment Under Contract in Alabama

In Alabama, employment contracts can modify the at-will employment doctrine, providing specific terms and conditions for the employment relationship. Employment contracts specify the term of employment which can be fixed or indefinite. It clearly outlines the employee’s roles, tasks, and expectations. The contract also details an employee’s compensation package (salary, bonuses, health insurance, retirement plans, and other benefits). It also defines the conditions under which the employment relationship can be terminated by either party, this may include “for cause” termination (e.g., misconduct, poor performance) and “without cause” termination (e.g., layoffs).

Lawful Termination in Alabama

Legal Grounds for Termination in Alabama

Employers cannot terminate employees for illegal reasons despite the broad authority under “at-will” employment. Several exceptions and legal protections under federal and state laws outline the legal grounds for termination:

  • Discrimination Termination: Federal and state laws prohibit termination based on race, color, religion, sex, age, national origin, age, or disability.
  • Retaliatory Termination: Employees are protected from termination for reporting violations of law, safety concerns, or other improper activities under federal laws, including whistleblower protections.
  • Contract Violations: If an employee has an employment contract that specifies terms of termination, the employer must adhere to those terms. Violating the contract’s terms can result in a breach of contract claim. Employees can challenge terminations that violate the terms of their employment contract or implied contract.

Read our comprehensive guide to firing employees in Alabama for further information.

How Do I File a Wrongful Termination Claim in Alabama?

You can claim wrongful termination if the termination violates federal anti-discrimination laws, retaliation protections, or other specific statutory protections. Alabama does not recognize general public policy, implied contract, or good faith exceptions to “at-will” employment, so the claim must be based on specific legal grounds. You must gather documentation related to your employment and termination, such as employment contracts, emails, performance reviews, and other relevant documentation supporting your claim.

If your claim involves discrimination, you must file a claim with the Equal Employment Opportunity Commission (EEOC). You must file the complaint within 180 days of the discriminatory act.

Legal Protections During Termination in Alabama

The following federal and state laws govern the termination protections for employees in Alabama:

  • Title VII of the Civil Rights Act of 1964: Title VII of the Civil Rights Act of 1964 prohibits employers from discriminating against employees based on race, color, religion, sex, or national origin. It applies to employers with 15 or more employees. The law covers all aspects of employment, including hiring, firing, promotion, compensation, and other terms and conditions. The law aims to ensure equal employment opportunities and to prevent workplace discrimination.
  • Age Discrimination in Employment Act (ADEA): The ADEA protects employees who are 40 years of age or older from age-based discrimination. It applies to employers with 20 or more employees. This law prohibits discrimination in hiring, promotions, wages, and termination. The ADEA also restricts mandatory retirement ages for most employees.
  • Americans with Disabilities Act (ADA): The ADA prohibits discrimination against individuals with disabilities in all areas of public life, including jobs. Employers with 15 or more employees must provide reasonable accommodations to qualified employees with disabilities. The ADA covers hiring, firing, promotions, training, and other employment practices. It ensures that employees with disabilities have the same rights and opportunities as everyone else.
  • Family and Medical Leave Act (FMLA): The FMLA entitles eligible employees to take up to 12 weeks of unpaid, job-protected leave per year for specified family and medical reasons. It applies to employers with 50 or more employees and covers employees who have worked for at least 1,250 hours over the past 12 months. Reasons for leave include personal or family illness, childbirth, adoption, or the serious health condition of a family member. Employees must be restored to their original job or an equivalent position upon leave.
  • Fair Labor Standards Act (FLSA): The FLSA establishes minimum wage, overtime pay, recordkeeping, and youth employment standards. It affects employees in the private sector and federal, state, and local governments. The law requires employers to pay one and a half times the regular rate for hours worked over 40 in a workweek. It also includes provisions to protect against retaliatory termination for reporting violations.
  • Alabama Age Discrimination in Employment Act (AADEA): The AADEA is similar to the federal ADEA but applies specifically within Alabama. It protects employees aged 40 and older from discrimination based on age in any aspect of employment. The law covers hiring, promotion, termination, and compensation. Employers in Alabama cannot use age as a basis for employment decisions.
  • Retaliation Protection for Public Employees: The Alabama Code § 36-26-A-3 provides protections for public employees in Alabama who report violations of law or other improper activities. It prohibits retaliation against employees who disclose information about violating the law or regulations, gross mismanagement, gross waste of funds, or a substantial and specific danger to public health or safety. Public employees are encouraged to report wrongdoing for fear of losing their jobs. This whistleblower protection is crucial for maintaining integrity and accountability in public service.
  • Retaliation Protection for Filing Worker’s Compensation Claim: This Alabama Code § 25-5-11.1 protects employees from being terminated in retaliation for filing a worker’s compensation claim. It ensures that employees who are injured on the job and seek compensation cannot be fired for doing so.

Terminated Employee Benefits in Alabama

Terminated employees in Alabama may be eligible for the following benefits to support them during their transition:

  • Unemployment Benefits: To qualify for unemployment benefits, employees must have been terminated through no fault of their own (e.g. layoffs, company closures). Employees must have a sufficient work history and be actively seeking new employment. Benefits are available for up to 26 weeks, but this can be extended during periods of high unemployment.
  • Health Insurance Continuation Coverage: Under the Consolidated Omnibus Budget Reconciliation Act (COBRA), terminated employees may continue their employer-sponsored health insurance for a limited period. Eligibility applies to employers with 20 or more employees, and employees must elect to continue coverage within 60 days of termination.
  • Severance Pay: Alabama does not require employers to offer severance pay as part of their employment agreements or company policies. Severance agreements should be in writing and may require the employee to sign a release of claims against the employer.
    Rapid Response Services: The Alabama Department of Labor offers Rapid Response services to assist workers affected by layoffs or plant closures, including retraining and job placement support.

Layoffs in Alabama

Layoffs in Alabama are an unfortunate reality in several industries and can be triggered by various factors including economic downturns, company restructuring, or technological advancements. Alabama adheres to the federal Worker Adjustment and Retraining Notification (WARN) Act. The WARN Act requires employers with 100 or more employees to provide 60 days advance notice of mass layoffs or plant closings affecting 50 or more employees at a single employment site.

The Alabama Department of Labor provides Rapid Response services to help workers and employers manage the effects of layoffs and plant closures. These services include job placement assistance, career counseling, and retraining opportunities.

Resignations in Alabama

Voluntary Resignations

A voluntary resignation is when an employee decides to leave their job of their own accord. This could be for various reasons, including finding a new job, personal reasons, or retirement. While not legally required by Alabama law, it is customary and considered professional for employees to provide notice two weeks before their resignation date.

Employees who voluntarily resign do not qualify for unemployment benefits unless they can demonstrate that they left for “good cause,” such as unsafe working conditions, significant changes to employment terms, or other justifiable reasons.

For state employees in the classified service, the process for voluntary resignations is governed by Alabama Admin. Code r. 670-X-18-.04. An employee must submit a letter of resignation to their appointing authority. The appointing authority must accept the resignation within ten days and forward it to the Director or their designee, along with a certificate indicating whether the employee’s service was satisfactory and if they are recommended for placement on a reemployment list. Additionally, an employee’s absence for three days without an excuse or notification may be considered a resignation. An employee who has served satisfactorily and resigned in good standing can request to be placed on a reemployment list within two years of the resignation date.

Involuntary Resignations

Involuntary resignation occurs when an employee is forced to resign under pressure from the employer, often to avoid being formally terminated. This can be considered a form of constructive discharge. If the work environment becomes so intolerable due to discrimination, harassment, or significant changes in employment terms, an employee may resign, and it can be deemed an involuntary resignation or constructive discharge.

Employees who believe they were forced to resign can file a constructive discharge claim. They must prove that the working conditions were unbearable and that a reasonable person in their position would have felt compelled to resign.

Legal Cases Related to Wrongful Termination in Alabama

1. Alabama KFC Owner Paid Over $1 Million to Settle EEOC Sexual Harassment Suit

Jack Marshall Foods, Inc., operating as Kentucky Fried Chicken (KFC) in Tuscaloosa, Alabama, agreed to a $1,052,000 settlement in response to a lawsuit filed by the US Equal Employment Opportunity Commission (EEOC). In the EEOC v. Jack Marshall Foods, Inc., the lawsuit accused the company of maintaining a hostile work environment at its Monroeville, Alabama location. Around 19 female employees, including at least three teenagers, were subject to severe sexual harassment by male employees. The harassment included explicit sexual comments, unwanted physical contact, and lewd gestures.

In addition to the monetary settlement, the consent decree mandates significant remedial actions. Jack Marshall Foods must provide training on sexual harassment, post a notice of the settlement, maintain and report records of discrimination complaints, and take corrective action as necessary for two and a half years.

Key lessons learned from this case:

  • Employers must ensure a work environment free from harassment.
  • Companies must act swiftly to address and rectify reports of harassment to avoid legal consequences.
  • Implementing strong anti-harassment policies and regular training can help prevent workplace harassment and protect employees’ rights.

2. EEOC Settles Age Discrimination Lawsuit Against Tandy Brands Accessories, Inc. for $95,000

Rite Way Service, Inc., a janitorial services provider, faced a federal lawsuit for unlawful retaliation after firing Mekeva Tennort, an employee who participated in an internal investigation into a coworker’s sexual harassment complaint. Tennort, who worked at Biloxi Junior High School, was terminated after giving a statement to supervisors. According to EEOC v Rite Way Service, Inc., the U.S. Equal Employment Opportunity Commission (EEOC) alleged that Rite Way issued false performance warnings before firing her.

This conduct violated Title VII of the Civil Rights Act of 1964, which protects employees from retaliation for participating in sexual harassment investigations. Rite Way agreed to a $70,000 settlement, which also included the distribution of anti-discrimination policies and compliance reporting to the EEOC if the company resumes operations.

Key lessons learned from this case:

  • Employers must not retaliate against employees who participate in internal investigations of harassment or discrimination.
  • Companies should develop and enforce anti-discrimination policies and provide regular training to prevent retaliation and ensure compliance.

3. Downhole Technology Settles EEOC Racial Harassment and Retaliation Suit for $120,000

In the Rose Marie Harshberger v. Hanger Prosthetics & Orthotics, Inc. case, Rose Marie Harshberger, an employee at Hanger Prosthetics & Orthotics, Inc., suffered a broken kneecap while on the job. Upon her return to work in March 2001, she was informed that her position had been eliminated in November 2000 due to downsizing and budget cuts. Despite this, no one informed her of the termination until she returned after her injury.

In the lawsuit, the court found the employer’s conduct deceitful and awarded Harshberger $850,000 in punitive damages and $150,000 in compensatory damages, totaling $1 million.

Key lessons learned from this case:

  • Employers must communicate significant employment decisions, such as job eliminations, promptly and transparently to avoid legal repercussions.
  • Treating employees fairly and honestly, especially after an injury or during a vulnerable period, is crucial in maintaining trust and legal compliance.
  • Deceitful conduct by employers can result in substantial punitive damages, emphasizing the importance of ethical management practices.

Learn more about Alabama Labor Laws through our detailed guide.

Important Cautionary Note

This content is provided for informational purposes only. While we make every effort to ensure the accuracy of the information presented, we cannot guarantee that it is free of errors or omissions. Users are advised to independently verify any critical information and should not solely rely on the content provided.