Arkansas Termination Laws

July 11th 2024

In Arkansas, termination laws govern the conditions under which an employee can be terminated, ensuring that the dismissals are conducted fairly and legally. Understanding the Arkansas termination laws is essential for both employers and employees to conduct the process properly and mitigate potential disputes.

This article explores the key aspects of Arkansas termination laws, providing 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 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.
  • 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.

“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 from termination as retaliation for engaging in legally protected activities. Termination in retaliation to filing a complaint, participating in an investigation, whistleblowing, or exercising rights is considered illegal.

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 cannot be terminated at will but only for reasons specified in the contract.

If either party 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 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 any efforts to avoid termination.

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 claim, it is essential to determine if your termination was unlawful. Common grounds for wrongful termination include discrimination, retaliation, violation of public policy, and breach of contract. If you believe you are wrongfully terminated, gather all evidence to support your claim. You can file a complaint with the Equal Employment Opportunity Commission (EEOC) within 180 days of the termination.

Legal Protections During Termination in Arkansas

  • Arkansas Civil Rights of 1993: The state law, Arkansas Civil Rights Act of 1993, prohibits discrimination in employment based on race, religion, national origin, gender, age (40 and older), disability, and other protected characteristics.
  • Arkansas Unemployment Insurance Law: The Arkansas Unemployment Insurance Law is governed by the Arkansas Division of Workforce Services, this law provides temporary financial assistance to eligible individuals who are unemployed through no fault of their own. It sets out the eligibility criteria, benefit amounts, and the process for filing claims and appeals.
  • 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. It 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 law requires payment on discharge which mandates employers to pay terminated employees all wages due on the next regular payday after termination, including accrued but unused vacation time or other benefits as specified in the employment contract or company policy.
  • Title VII of the Civil Rights of 1964: Title VII of the Civil Rights of 1964 is a federal law that prohibits employment discrimination based on race, color, religion, sex, and national origin. It applies to employers with 15 or more employees, including state and local governments.
  • Age of Discrimination in Employment Act (ADEA): The Age of Discrimination in Employment Act (ADEA) is enforced by the EEOC, this federal law protects individuals aged 40 and older from age-based employment discrimination. Employers cannot terminate employees based on their age. This law applies to employers with 20 or more employees and covers hiring, firing, promotions, layoffs, compensation, benefits, job assignments, and hiring.
  • Americans with Disabilities Act (ADA): The Americans with Disabilities Act (ADA) is a federal law that prohibits discrimination against qualified individuals with disabilities in all aspects of employment, including hiring, firing, job assignments, promotions, compensation, and training. It requires employers to provide reasonable accommodations to qualified individuals with disabilities unless doing so would cause undue hardship.
  • Family Medical Leave Act (FMLA): The Family Medical Leave Act (FMLA) provides eligible employees with up to 12 weeks of unpaid, job-protected leave per year for certain family and medical reasons. It requires employers to maintain employees’ health benefits during the leave and to restore employees to their original job or an equivalent position upon their return.

Terminated Employee Benefits in Arkansas

  • Unemployment Insurance Benefits: Terminated employees in Arkansas may be eligible for unemployment 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) allows terminated employees to continue their health insurance coverage.
  • 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 and covered mass layoffs. WARN provisions are triggered by plant closings (shutting down a site or operating unit resulting in job loss for 50 or more employees) and mass layoff (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

Employee resignations in Arkansas can be classified as voluntary or involuntary, each with distinct implications for employees and employers. Understanding the differences and associated rights and obligations is crucial for managing the resignation process effectively.

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 involve constructive discharge, this happens when an employee resigns due to intolerable working conditions that any reasonable person would find the situation unbearable. This could include harassment, discrimination, significant changes in job duties, or other adverse conditions.

Employees who believe they have been constructively discharged can file a complaint with the EEOC.

Legal Cases Related to Wrongful Termination in Arkansas

1. AT&T Paid $1.3 Million for Religious Discrimination Case

In the case of EEOC v. AT&T, Jose Gonzalez and Glenn Own, who are brothers-in-law, worked as customer service technicians for 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 the 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. Bentonville McDonald’s Settled $103,000 in Disability Discrimination Suit

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. Additionally, the EEOC challenged the company’s policy that mandated all employees to disclose their medication usage, which was deemed illegal under the ADA.

After the EEOC filed the lawsuit, the former employee intervened in the case with his own lawsuit, represented by an employment lawyer in Arkansas. The employer settled $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 Americans with Disabilities Act (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, this necessitates revisions to comply with federal law.
  • 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.