Arkansas Termination Laws

September 20th 2024

In Arkansas, termination laws dictate the conditions under which an employee may be dismissed, ensuring the process is conducted fairly and legally. It is important for both employers and employees to understand these regulations to manage terminations properly and reduce the risk of disputes.

This article explores the key aspects of Arkansas termination laws, offering a comprehensive overview of employee rights and responsibilities.

This Guide Covers

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

Legal Considerations for Termination in Arkansas

When terminating an employee in Arkansas, employers must navigate various legal considerations to ensure the termination process is lawful. Considerations for termination include:

  • Discrimination Laws: Employers cannot terminate employees based on race, color, religion, sex, national origin, age (40 or older), disability, or genetic information. Employers should document the business reasons for termination and ensure they are not based on any protected characteristics.
  • Retaliation Protections: Employers cannot terminate an employee in retaliation for engaging in protected activities. These activities include filing a discrimination complaint, participating in an investigation, or whistleblowing on illegal activities. Employers must ensure that any termination decision is based on valid business reasons rather than retaliatory motives.
  • Notice Requirements: Arkansas does not have specific laws requiring employers to give notice before terminating an employee, but the federal Worker Adjustment and Retraining Notification (WARN) Act requires certain employers to provide 60 days’ notice in cases of mass layoffs or plant closings.
  • Unemployment Benefits: Terminated employees in Arkansas may be eligible for unemployment benefits if they lost their job through no fault of their own. Employees terminated for misconduct may be disqualified from receiving benefits.
  • Final Paycheck: Arkansas law requires employers to pay terminated employees their final wages by the next regular payday or within seven days of termination, whichever is sooner.
  • Documentation: Employers should keep thorough records of the reasons for termination, including performance reviews, disciplinary actions, and any relevant correspondence. Proper documentation is crucial for demonstrating legal compliance and protecting against potential legal claims.
  • Severance Agreements: Employers providing severance packages must ensure that these agreements adhere to relevant laws. It is important to draft these arrangements meticulously to safeguard the employer’s interests.

At-Will Employment in Arkansas

What is At-Will Employment?

At-will employment is a legal doctrine that allows either the employer or the employee to terminate the employment relationship at any time, with or without cause, and without prior notice. This means that an employer can fire an employee for any reason, or no reason and an employee can leave their job for any reason, without legal repercussions.

Arkansas follows the at-will doctrine which provides flexibility in the employer-employee relationship but also requires careful consideration of the legal exceptions and protections in place to prevent abuse and ensure fairness in the workplace.

What are the Exceptions to At-Will Employment in Arkansas?

While Arkansas follows the at-will employment doctrine, there are several exceptions that protect employees from unjust terminations. These exceptions are designed to ensure that employees are not fired for illegal and unethical reasons:

  • Public Policy Exception: Under the public policy exception, employers cannot fire employees for refusing to engage in illegal activities, performing a legal duty, or exercising legal rights.
  • Implied Contract: Even in the absence of a written contract, an implied contract may exist, this can occur through the outlined provisions in employee handbooks that suggest job security or specific procedures for termination.
  • Discrimination: Under federal and state anti-discrimination laws, employers cannot terminate employees based on protected characteristics.
  • Retaliation: Employees are protected against termination that is retaliatory in nature. It is illegal to dismiss an employee for filing a complaint, participating in an investigation, whistleblowing, or exercising legally protected rights.

Employment Under Contract in Arkansas

Employment under contract in Arkansas refers to situations where an employee has a formal agreement with their employer outlining the terms and conditions of employment. Employment contracts are written commitments that stipulate specific protections and obligations for both parties beyond the at-will employment doctrine.

An employment contract specifies the employment duration, job duties and responsibilities, compensation and benefits, grounds for termination, notice requirements, and confidentiality and non-compete clauses. Contracts provide a level of job security for employees, as they outline specific conditions under which termination is permissible, rather than allowing termination at will.

If either party involved in a contract fails to fulfill their contractual obligations, the other party can claim a breach of contract.

Lawful Termination in Arkansas

Legal Grounds for Termination in Arkansas

  • At-Will Employment: Arkansas is an at-will employment state, which means employers can terminate employees at any time, for any reason, or for no reason at all, without prior notice. This gives employers broad flexibility in managing their workforce. However, this flexibility is subject to several important legal exceptions and employee protections.
  • Performance-Related Termination: Employers can legally terminate employees for poor job performance. This includes failing to meet job expectations, lack of productivity, and failing to adhere to company policies and procedures. Proper documentation of performance issues is crucial for defending against potential wrongful termination claims.
  • Misconduct: Employees can be terminated for misconduct, which includes actions such as theft, dishonesty, harassment, violation of company policies, and insubordination. Employers should have clear policies outlining what constitutes misconduct and the consequences of such behaviors. Documenting instances of misconduct and any disciplinary actions taken is essential for supporting the termination decision.
  • Violation of Company Policies: Employees who violate company policies can be terminated. This includes breaches of workplace safety rules, attendance policies, and other established guidelines. Employers must ensure that these policies are clearly communicated to all employees and that violations are properly documented. Employees should be aware of the consequences of violating company policies and understand the procedures for addressing infractions.
  • Reductions in Force (RIF) or Layoffs: Economic downturns, restructuring, or changes in business needs may necessitate workforce reductions. Employers can legally terminate employees as part of a reduction in force (RIF) or layoff. While Arkansas law does not require advance notice, federal law such as the WARN Act may require employers to give 60 days of notice for mass layoffs under certain conditions. Employers should follow a fair and objective process when selecting employees for layoffs to avoid discrimination claims.
  • Termination Due to Lack of Work: Employers can terminate employees when there is a lack of work or business slowdown. This is often a temporary measure due to decreased demand for products or services. Employers should document the business reasons for the lack of work and all efforts taken to avoid terminating employees.

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

How Do I File a Wrongful Termination Claim in Arkansas?

Before filing a wrongful termination claim in Arkansas, it is essential to determine if your termination is unlawful. Common grounds for wrongful termination include discrimination, retaliation, violation of public policy, and breach of contract. As an employee, if you believe you have been wrongfully terminated, it is advisable to gather all evidence to support your claim and to file a complaint with the Equal Employment Opportunity Commission (EEOC) within 180 days of the termination.

Legal Protections During Termination in Arkansas

  • Worker Adjustment and Retraining Notification (WARN) Act: The federal Worker Adjustment and Retraining Notification (WARN) Act requires employers with 100 or more employees to provide 60 days’ advance notice of plant closings or mass layoffs affecting 50 or more employees. The act aims to give employees and communities time to adjust to the prospective loss of employment and to seek alternative job opportunities and training.
  • Payment on Discharge: Arkansas Code § 11-4-405 mandates that employers must pay discharged employees all wages due on the next regular payday after termination, including accrued but unused vacation time or other benefits specified in the employment contract or company policy. If the employer fails to make this payment within seven days of the next regular payday, they are required to pay double the wages due.
  • Title VII of the Civil Rights Act of 1964: Title VII of the Civil Rights Act of 1964 forbids employment discrimination and termination related to protected characteristics including race, religion, color, sex, and national origin. Employers must ensure that terminations are based on valid, non-discriminatory reasons.
  • Age Discrimination in Employment Act (ADEA): The Age Discrimination in Employment Act (ADEA) protects employees aged 40 and older from discrimination based on age. Termination decisions made based on age may violate the ADEA. Employers must ensure that any termination is based on legitimate business reasons and not influenced by an employee’s age.
  • Americans with Disabilities Act (ADA): The Americans with Disabilities Act (ADA) protects employees with disabilities from discrimination and requires reasonable accommodations to be made for them. Terminating an employee because of their disability or failing to provide necessary accommodations can be considered a violation of the ADA.
  • Family Medical Leave Act (FMLA): The Family Medical Leave Act (FMLA) provides eligible employees with up to 12 weeks of unpaid leave for specific family and medical reasons while protecting their jobs during this period. If an employee is terminated during their FMLA leave, it must be based on legitimate business reasons and not due to their use of leave.
  • Arkansas Civil Rights Act of 1993: On a state level, the Arkansas Civil Rights Act of 1993 prohibits employment discrimination based on race, color, religion, disability, age, and national origin. Termination decisions that are influenced by any of these protected characteristics violate this law.
  • Arkansas Unemployment Insurance Law: The Arkansas Unemployment Insurance Law is a law that provides temporary financial assistance to eligible individuals who are unemployed through no fault of their own. The law is administered by the Arkansas Division of Workforce Services and sets out the eligibility criteria, benefit amounts, and the process of filing claims and appeals.

Terminated Employee Benefits in Arkansas

When employees in Arkansas are terminated, they are entitled to various benefits including:

  • Unemployment Insurance Benefits: Terminated employees in Arkansas may be eligible for unemployment insurance benefits. To qualify, employees must be unemployed through no fault of their own; this includes being laid off due to lack of work.
  • Health Insurance Continuation: The Consolidated and Omnibus Budget Reconciliation Act (COBRA) provides terminated employees with the option to continue their health insurance coverage for a limited period after leaving their job. This federal law applies to employers with 20 or more employees and typically allows for continuation of coverage for up to 18 months. In addition to federal COBRA, the state has its mini-COBRA. Arkansas Mini-COBRA extends similar continuation benefits to employees and their dependents can continue their health insurance coverage for up to 12 months following a qualifying event, such as job loss or a reduction in hours.
  • Final Paycheck: Arkansas law requires employers to pay terminated employees their final wages on the next regular payday or within seven days, whichever comes first. Final wages must include all earned pay, including any accrued but unused vacation leave if the employer’s policy provides it.
  • Severance Pay: Severance pay is not required by Arkansas law but may be offered at the employer’s discretion and may be part of an employment contract or company policy.

Layoffs in Arkansas

The federal Worker Adjustment and Retraining Notification (WARN) Act protects workers, their families, and communities by requiring employers to provide notice 60 days in advance of:

  • Covered plant closings: Shutting down a site or operating unit resulting in job loss for 50 or more employees.
  • Covered mass layoffs: A reduction in workforce that affects either 500 employees or 50 employees if they constitute at least 33% of the workforce at a single site.

Resignations in Arkansas

In Arkansas, employee resignations are classified as either voluntary or involuntary, and each type has different effects on employees and employers.

Voluntary Resignations

A voluntary resignation occurs when an employee leaves their job on their own accord. While resignation notice is not legally required, it is customary for employees to provide at least a two-week notice to their employer. Some employers may have specific policies regarding the notice period required for voluntary resignations. Employees should review their employment contract or employee handbook for details.

Involuntary Resignations

Involuntary resignations or constructive discharge can occur when an employee resigns due to intolerable working conditions and what is often not deemed voluntary. These conditions could include workplace harassment, discrimination, significant changes in job duties, or other adverse circumstances.

Employees who believe they have fallen victim to involuntary resignation could potentially pursue a constructive discharge claim.

Legal Cases Related to Wrongful Termination in Arkansas

1. American Telecommunications Company Pays $1.3 Million for Religious Discrimination Case

In the case of EEOC v. AT&T, Jose Gonzalez and Glenn Owen, who are brothers-in-law, worked as customer service technicians for American Telecommunications Company, AT&T. Owen was employed for nearly six years, and Gonzalez for over eight years. Their religious beliefs required them to attend a Jehovah’s Witness Convention annually, a practice they maintained throughout their employment.

In January 2005, they submitted written requests to their manager for a day of leave in July for the convention. Despite their long-standing practice, they were suspended and fired shortly after the convention.

The EEOC sued AT&T on behalf of the employees, alleging violations of Title VII of the Civil Rights Act of 1964 due to religious discrimination and wrongful termination. Following a four-day trial, the jury awarded Gonzalez and Owen back pay, front pay, compensatory damages, and interest, totaling over $1.3 million. AT&T appealed the verdict, but the Eighth Circuit Court upheld the decision.

Key lessons learned from this case:
  • Employers must respect and accommodate employees’ sincerely held religious beliefs, especially when requests are reasonable and consistent with past practices.
  • Failure to accommodate religious practices can result in substantial legal and financial repercussions for employers, including compensatory damages and back pay.
  • Submission of written leave requests in advance provides clear evidence of employees’ intentions and needs.
  • Employers should establish and enforce clear policies to accommodate religious practices and train managers to handle such requests appropriately to avoid legal disputes.

2. McDonald’s Bentonville Settles $103,000 in Wrongful Termination and Disability Discrimination Lawsuit

In the case, EEOC v. Matthews Management et al., an unknown employee at a McDonald’s restaurant in Bentonville, Arkansas, owned and operated by Matthews Management Company and Peach Orchard, Inc., was terminated after the company learned of his HIV-positive status.

The EEOC filed a lawsuit against the McDonald’s franchisee, alleging violations of the Americans with Disabilities Act (ADA). The lawsuit contended that the termination constituted discrimination based on the employee’s illness. The EEOC also challenged the company’s policy that mandated all employees to disclose their medication usage, which was deemed illegal under the ADA.

Following the EEOC lawsuit, the former employee intervened in the case with his own lawsuit, represented by an employment lawyer in Arkansas. The employing companies eventually settled for $103,000 out of court and agreed to conduct disability training for their managers and revise their policy requiring mandatory disclosure of prescription medications.

Key lessons learned from this case:
  • Employers must adhere to the ADA by ensuring they do not discriminate against employees based on their disability status, including conditions like HIV.
  • Policies that require mandatory disclosure of prescription medications by employees are deemed unlawful under the ADA.
  • Employers are encouraged to implement comprehensive disability training for managers to help prevent discrimination and foster a more inclusive workplace environment.
  • Employees have the right to intervene in lawsuits and seek their own legal representation to address grievances related to workplace discrimination.

Learn more about Arkansas 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.