Delaware Termination Laws

June 28th 2024

Understanding Delaware termination laws’ nuances is essential for employers and employees. These laws govern how and when an employment relationship can be legally ended and ensure that both parties are treated fairly in the process.

This article will provide a comprehensive overview of Delaware’s termination laws, covering the key legal provisions, exceptions to the at-will employment rule, and the rights and responsibilities of employers and employees.

This Guide Covers

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

Legal Considerations for Termination in Delaware

When terminating an employee in Delaware, employers must know the legal considerations to ensure compliance with federal and state laws. Failure to adhere to these legal requirements can result in costly litigation and penalties. Here are the key legal considerations for termination in Delaware:

  • At-Will Employment and Its Exceptions: Delaware is an “at-will” employment state, meaning employers can terminate employees for any reason or no reason, as long as it is not illegal. However, despite this broad discretion, several exceptions apply to “at-will” employment.
  • Anti-Discrimination Laws: Employers cannot terminate and discriminate against employees based on race, color, religion, sex, or national origin.
  • Retaliation: Employers cannot retaliate against employees for reporting discrimination, participating in investigations, or asserting their rights under these laws.
  • Employment Contracts: If a contract governs employment, the terms of that contract will dictate the conditions under which termination can occur. Breaching the terms of an employment contract can lead to wrongful termination claims and breach of contract.
  • Implied Contracts: Even without a written contract, implied contracts can arise from statements made in employee handbooks, policies, or oral assurances of job security.
  • Notice Requirements and Final Paychecks: Delaware does not require employers to provide advance notice of termination unless specified by contract or company policy. Employers must provide final paychecks, including payment for all earned wages, by the next scheduled payday following the termination.
  • Fair Labor Standards Act (FLSA): The FLSA sets standards for minimum wage, overtime pay, recordkeeping, and youth employment. Employers must ensure that final paychecks comply with FLSA requirements, including payment for all hours worked, overtime, and accrued but unused vacation time. Compliance with its wage and hour provisions is essential when terminating employees.

“At-Will” Employment in Delaware

What is “At-Will” Employment?

“At-will employment is a fundamental principle in Delaware labor law that significantly influences the employer-employee relationship. Under this doctrine, either the employer or the employee can terminate the relationship at any time, for any reason, or no reason at all, without prior notice.

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

While Delaware follows the “at-will” employment doctrine, which allows employers and employees to terminate the employment relationship at any time for any reason or no reason, significant exceptions protect employees from unfair dismissal. The exceptions to “at-will” employment in Delaware include:

  • Public Policy Exception: Employees are protected from termination for exercising their legal rights.
  • Implied Contract Exception: Statements in employee handbooks or company policies suggest that job security or specific procedures for termination can create an implied contract.
  • Good Faith and Fair Dealing Exception: Some courts recognize an implied covenant of good faith and fair dealing in employment relationships. This exception is less commonly invoked but can prevent terminations made in bad faith, motivated by malice, or intended to deprive employees of earned benefits or compensation.
  • Statutory Protections: Federal and state laws prohibit termination based on discrimination and retaliation.
  • Collective Bargaining Agreements: Employees covered by union contracts are subject to the terms of the collective bargaining agreements (CBAs). These agreements often include specific provisions regarding termination, such as requiring just cause for dismissal and outlining grievance procedures for dispute.

Employment Under Contract in Delaware

Employment under contract in Delaware involves a formal agreement between an employer and an employee that outlines the terms and conditions of employment. Here are the key aspects of an employment contract:

  • A written employment contract explicitly details the rights and obligations of the employer and employee. The contract must include information about job duties, salary, benefits, duration of employment, grounds for termination, and procedures for resolving disputes.
  • An implied contract can be formed through company policies or employee handbooks that suggest job security or specific procedures for termination.
  • Contracts may include non-compete clauses restricting the employee from working for competitors or starting a competing business for a certain period after leaving the company.
  • Contracts may often contain confidentiality clauses to protect the employer’s proprietary information and trade secrets.

Lawful Termination in Delaware

Legal Grounds for Termination in Delaware

In Delaware, employers can terminate employees under various legal grounds, including:

  • “At-Will” Employment Doctrine: Delaware follows the “at-will” employment doctrine, allowing employers to terminate employees for any lawful reason, with or without cause, as long as it does not violate statutory or contractual rights. Common reasons include poor performance, misconduct, or lack of qualifications.
  • Just Cause: While not required under “at-will” employment, some employment contracts or collective bargaining agreements may specify “just cause” as a requirement for termination. Just cause includes serious misconduct, performance issues, and legal obligations.
  • Violation of Company Policies: Termination may be justified if an employee breaches established company policies or rules, especially if the breach is serious and affects the company’s operations, reputation, or safety.
  • Reduction in Force (RIF): Employers may terminate employees due to economic reasons, organizational restructuring, or business closures. However, Delaware employers must comply with the federal WARN Act, which requires advance notice to employees and local government when certain thresholds for layoffs or plant closures are met.
  • Discrimination and Retaliation: Terminating an employee based on protected characteristics (e.g., race, color, religion, sex, national origin, age, disability) or in retaliation for engaging in protected activities (e.g., filing a discrimination complaint, participating in an investigation) is illegal under federal and Delaware state law.
  • Contractual Obligations: If an employment contract or collective bargaining agreement exists, termination must comply with the terms and conditions outlined in these agreements. This may include specific procedures, notice periods, or just cause requirements that limit the employer’s ability to terminate at will.

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

How Do I File a Wrongful Termination Claim in Delaware?

Before filing a wrongful termination claim in Delaware, you must determine if your termination qualifies as wrongful under Delaware or federal law. Wrongful termination can occur if you were fired for reasons that violate anti-discrimination laws, retaliation, or breach of contract. You also have to collect evidence that supports your claim of wrongful termination. This may include employment records, witness statements, and a timeline of events.

File a claim with the Equal Employment Opportunity Commission (EEOC) or the Delaware Department of Labor’s Division of Industrial Affairs, Office of Anti-Discrimination (formerly the Delaware Department of Human Relations).

Legal Protections During Termination in Delaware

Both federal and state laws provide a range of protections for employees facing termination in Delaware. These laws are designed to prevent wrongful termination and ensure fair treatment:

  • Title VII of the Civil Rights Act of 1964: This Act provides significant protection against termination based on race, color, religion, sex, or national origin. In Delaware, this federal law ensures that employees cannot be legally terminated for discriminatory reasons that fall under these protected categories.
  • Age Discrimination in Employment Act (ADEA): The ADEA protects employees aged 40 and older from termination based on age. In Delaware, this federal law is crucial for preventing age-based discrimination in the workplace.
  • Americans with Disabilities Act (ADA): The ADA protects employees with disabilities from being terminated due to their disability. In Delaware, this law mandates that employers provide reasonable accommodations to qualified employees with disabilities unless it causes undue hardship.
  • Family and Medical Leave Act (FMLA): The FMLA provides employees with up to 12 weeks of unpaid, job-protected leave for certain family and medical reasons. In Delaware, this federal law ensures that employees cannot be terminated for taking FMLA leave. Employers must comply with the FMLA requirement by granting eligible leave and maintaining the employee’s job position during their absence.
  • Fair Labor Standards Act (FLSA): The FLSA sets standards for minimum wage, overtime pay, and recordkeeping. It ensures that employees receive fair compensation up to the point of termination. Employers must comply with FLSA requirements, including the proper payment of final wages and overtime.
  • Occupational Safety and Health Act (OSHA): The OSHA protects employees from unsafe working conditions and retaliation for reporting safety violations. This federal law ensures that employees can report hazardous conditions without fear of termination. Employers must maintain a safe workplace and address safety concerns promptly.
  • Worker Adjustment and Retraining Notification (WARN) Act: The WARN Act requires employers to provide 60 days’ notice of plant closing or mass layoffs. This federal law ensures that employees have advance notice of significant employment changes, allowing them to prepare and seek new employment.
  • Delaware Discrimination in Employment Act (DDEA): The DDEA mirrors federal anti-discrimination laws, providing additional protections against termination based on marital status or sexual orientation.
  • Delaware Persons with Disabilities Employment Protections Act: This Act provides similar protections to the ADA, ensuring that employees with disabilities are not terminated due to their disabilities. This state law mandates reasonable accommodations for qualified employees with disabilities unless it causes undue hardship.
  • Delaware Worker Adjustment and Retraining Notification (DE WARN Act): This Act requires employers with 100 or more full-time employees to provide at least 60 days’ notice before a mass layoff or plant closing. This state law mirrors the federal WARN Act but applies specifically to Delaware, ensuring that workers and their families receive advance notice to prepare for employment transitions.
  • Delaware Whistleblower’s Protection Act: This Act protects employees from retaliation or termination for reporting illegal activities, participating in investigations, or refusing to engage in illegal acts. This state law ensures that employees can report misconduct without fear of losing their jobs.
  • Delaware Wage and Payment Collection Act: This Act ensures timely payment of wages upon termination, including earned but unused vacation pay if stipulated by company policy or contract. This state law protects employees from wrongful withholding of their final wages.
  • Delaware Public Employment Relations Act: This Act protects public employees, including grievance procedures and protections against unjust termination. This state law ensures that public sector employees have a process of addressing employment disputes and unfair terminations.

Terminated Employee Benefits in Delaware

When an employee is terminated in Delaware, there are several considerations regarding their benefits, rights, and entitlements.

  • Final Paycheck: Employers in Delaware are required to provide terminated employees with their final paycheck, including full payment for all hours worked up to the termination date. This must be provided before the next payday following the termination.
  • Consolidated Omnibus Budget Reconciliation Act (COBRA): Under the federal COBRA, terminated employees and their dependents have the right to continue their health insurance coverage at their own expense for a period after termination. Employers are required to provide COBRA notices and information to eligible employees upon termination.
  • Unemployment Insurance Benefits: Terminated employees may be eligible to receive unemployment insurance benefits through the Delaware Department of Labor if they meet certain criteria, such as having earned a minimum wage during their employment period, worked in Delaware for the past 12 months, and being unemployed through no fault of their own. Employees must file a claim for unemployment benefits promptly after termination to determine eligibility.

Layoffs in Delaware

Layoffs in Delaware involve permanently separating employees from their jobs due to factors such as economic downturns, organizational restructuring, or changes in business operations. Employers should carefully plan and execute layoffs, taking into account the following notification requirements:

  • Federal Worker Adjustment and Retraining Notification (WARN) Act: Under the federal WARN Act, employers with 100 or more employees must provide 60 days’ advance notice to affected employees and certain government agencies before implementing a plant closing or mass layoff.
  • Delaware Worker Adjustment and Retraining Notification (DE WARN) Act: The Delaware WARN Act is similar to the federal WARN Act but has additional provisions. This notification requirement applies to employers with 100 or more full-time employees at least 60 days before a covered plant closure or mass layoff. Certain exemptions may apply, such as unforeseen business circumstances, natural disasters, or if the employer was actively seeking capital or business that would have allowed the business to continue operations. In these cases, the notice period may be reduced if the employer can prove that providing the full 60-day notice was not possible.

Both notification requirements apply when:

  • A plant is closing which results in the loss of employment for 50 or more employees during any 30 days.
  • A mass layoff involves 500 or more employees, or 50 to 499 employees if they constitute at least 33% of the employer’s workforce.

Resignations in Delaware

Voluntary Resignations

A voluntary resignation occurs when an employee chooses to terminate their employment voluntarily and without external pressure from the employer. Employees may be expected to provide advance notice of their resignation to their employer following company policy or employment contract terms. While Delaware does not specify a minimum notice period for voluntary resignations, providing at least two weeks’ notice is considered customary and professional.

Employers must pay employees their final paycheck, including payment for all hours worked and any accrued but unused vacation time, on or before the next regular payday following the resignation date. Employees who resign voluntarily may not be eligible for unemployment insurance benefits unless they can demonstrate good cause for resigning attributable to the employer.

Involuntary Resignations

An involuntary resignation, sometimes referred to as a constructive discharge, occurs when an employer pressures an employee to resign under duress or with implied threats of termination. This may cause legal concerns, particularly if the employer’s actions amount to constructive discharge, where the work conditions become intolerable or unsafe, forcing the employee to resign.

Legal Cases Related to Wrongful Termination in Delaware

1. Jury Awards Over $296,000 in Employment Discrimination Case Against Bayhealth Medical Center

In August 2018, Suzanne Wilgus tried an employment discrimination case against Bayhealth Medical Center, Inc., alleging violations of the Delaware Persons With Disabilities Employment Protections Act (DEPA). According to the case, Wilgus v. Bayhealth Med. Ctr., Inc., Wilgus claimed that Bayhealth terminated her employment after refusing to provide reasonable accommodation for her disability. The jury found in favor of Wilgus, determining that Bayhealth’s actions violated DEPA. As a result, the jury awarded Wilgus $196,285.28 in compensatory damages and $100,000 in punitive damages, totaling $296,285.28.

Bayhealth subsequently filed a motion to renew its previous request for judgment as a matter of law or sought a new trial under Superior Court Civil Rule 59. However, the court denied Bayhealth’s motion, affirming the jury’s decision and the damages awarded to Wilgus.

Key lessons learned from this case:

  • Employers must engage in a good-faith interactive process to identify and implement reasonable accommodations for employees with disabilities. Failure to do so can result in substantial legal and financial consequences.
  • The Delaware Persons With Disabilities Employment Protections Act provides strong protections for employees with disabilities, ensuring they are not discriminated against or wrongfully terminated due to their disability or record of disability.

2. Former Delaware Probation Officer Awarded $300,000 in Retaliation Case

In March 1999, Calvin M. Price, a former probation officer with the Delaware Department of Correction, was awarded $300,000 in damages by a jury. According to the case, Price v. Delaware Dept. of Correction, Price had filed a complaint against the Department and two supervisors, George Hawthorne and Catherine Taylor, alleging retaliation following his discrimination complaint. Price and eleven other African-American employees had filed a racial discrimination complaint in 1991, leading to a finding of historical discrimination within the Department. Despite positive performance reviews, Price experienced increased scrutiny, unauthorized medical inquiries, and criticism from his supervisors after the complaint. The jury found that the Department and the supervisors intentionally retaliated against Price, resulting in intolerable working conditions that forced him to resign. The jury awarded Price $200,000 for the Title VII claim against the Department and $100,000 in back pay against all defendants jointly.

Key lessons learned from this case:

  • This case underscores the importance of protections against retaliation for employees who file discrimination complaints. Employers must ensure that no adverse actions are taken against such employees.
  • The conduct of supervisors is critical. Unauthorized medical inquiries and unwarranted scrutiny can be deemed retaliatory, leading to significant legal and financial consequences.
  • Employees facing discrimination and retaliation have legal avenues for recourse, and successful claims can result in substantial compensation for damages and lost wages.

Learn more about Delaware 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.