Massachusetts Termination Laws

September 4th 2024

When it comes to understanding Massachusetts termination laws, both employers and employees need to be aware of federal and state regulations to ensure the process is conducted fairly and legally.

This article provides an overview of the legal requirements and protections in place when it comes to terminating an employment relationship in Massachusetts.

This Guide Covers

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

Legal Considerations for Termination in Massachusetts

Termination in Massachusetts involves legal considerations that both employers and employees should be aware of to ensure compliance with state laws. These include:

  • At-Will Employment Doctrine: Massachusetts follows the at-will employment doctrine, allowing employers to terminate employees at any time, for any reason, without reason, as long as it does not violate any laws or contractual agreements.
  • Anti-Discrimination Laws: Terminations must comply with federal and state anti-discrimination laws. Employers cannot fire an employee based on race, gender, religion, age, disability, or other protected characteristics. Violations can lead to claims of wrongful termination.
  • Retaliation Protection: Employees are protected from being terminated in retaliation for engaging in legally protected activities, such as filing a complaint about workplace discrimination, participating in an investigation, or taking legally protected leave.
  • Final Paycheck Requirements: Employers must pay all earned wages, including accrued vacation time, promptly upon termination. For involuntary terminations, this payment must be made on the day of termination; for voluntary resignations, it must be paid by the next regular payday.

At-Will Employment in Massachusetts

What is At-Will Employment?

At-will employment in Massachusetts means that either the employer or the employee can terminate the employment relationship at any time, for any reason, or no reason at all, without prior notice. This gives employers significant flexibility in managing their workforce, and employees can also leave a job whenever they choose.

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

While at-will employment is the general rule, there are important exceptions in Massachusetts:

  • Anti-Discrimination Laws: Employers cannot terminate an employee based on protected characteristics such as race, color, religion, gender, national origin, age, disability, or sexual orientation.
  • Retaliation: Employees cannot be fired in retaliation for exercising their legal rights, such as filing a complaint about workplace discrimination or harassment, participating in an investigation, or reporting unsafe working conditions.
  • Public Policy Exception: Employers cannot terminate an employee if doing so would violate public policy. For example, firing an employee for refusing to engage in illegal activities, performing a legal obligation, or exercising a statutory right could be considered wrongful termination.
  • Implied Contract Exception: Even in an at-will state, if there is an implied contract through company policies, employee handbooks, or verbal assurances, employers are obligated to follow those specific procedures or terms.

Employment Under Contract in Massachusetts

In Massachusetts, employment under contract refers to a work agreement where the terms of employment are explicitly outlined in a written or oral agreement between the employer and the employee. This contract typically specifies the duration of employment, job duties, compensation, benefits, and other conditions such as grounds for termination or procedures for resolving disputes.

Unlike at-will employment, where either party can terminate the relationship at any time without cause, employment under contract in Massachusetts is generally bound by the terms specified in the agreement. If an employer terminates a contracted employee without just cause, as defined in the contract, the employee may have grounds for a wrongful termination claim. Additionally, non-compete clauses, confidentiality agreements, and other restrictive covenants are often included in employment contracts, which impact the employee’s actions during and after their employment.

Massachusetts law also provides protections for employees under contract, ensuring that certain rights cannot be waived, such as the right to earn minimum wage, overtime pay, and protection against discrimination. Employers must adhere to both the terms of the contract and the state’s legal requirements to avoid potential legal disputes.

Lawful Termination in Massachusetts

Legal Grounds for Termination in Massachusetts

In Massachusetts, termination of employment can be legally carried out on several grounds as long as the action complies with state and federal laws:

  • At-Will Employment: Massachusetts is an at-will employment state, meaning employers can legally terminate an employee at any time, for any reason, or for no reason at all, without prior notice, unless there is an employment contract that states otherwise. However, the reason for termination cannot be illegal or discriminatory.
  • Performance Issues: Employers can terminate employees for poor job performance, including failing to meet job expectations, missing deadlines, or producing substandard work. Documentation of performance issues is often critical in defending against potential wrongful termination claims.
  • Misconduct: Termination is legal if it is based on employee misconduct, such as violating company policies, engaging in theft, harassment, insubordination, or other actions that harm the workplace environment or business operations.
  • Violation of Company Policies: Employees who violate company policies, such as attendance rules, safety regulations, or codes of conduct, can be legally terminated. Employers should ensure that such policies are clearly communicated and consistently enforced.
  • Reduction in Force (Layoffs): Employers can legally terminate employees for economic reasons, such as layoffs, downsizing, or business closures. These terminations are typically non-performance-related and are based on the company’s financial needs or restructuring efforts.
  • End of Contract: If an employee works under a contract with a set duration, the employment can be legally terminated at the end of the contract term. Both parties must adhere to the contract terms regarding termination and notice periods.
  • Insubordination: Employers may legally terminate an employee who refuses to follow reasonable and lawful instructions from their supervisors, showing a lack of respect for authority and undermining workplace order.
  • Illegal or Unethical Behavior: Employees involved in illegal activities, such as fraud, embezzlement, or substance abuse, can be legally terminated. Engaging in unethical behavior that violates professional standards can also be grounds for termination.

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

How Do I File a Wrongful Termination Claim in Massachusetts?

To file a wrongful termination claim in Massachusetts, employees are encouraged to gather evidence of wrongful acts, such as contract violations or discriminatory practices. If discrimination is involved, file a complaint with the Massachusetts Commission Against Discrimination (MCAD) or the Equal Employment Opportunity Commission (EEOC) within 300 days.

For wrongful termination claims involving breach of contract or other issues outside of discrimination, employees may file a lawsuit in state or federal court. Generally, employees have three years from the date of termination to file a wrongful termination lawsuit in Massachusetts.

Legal Protections During Termination in Massachusetts

In Massachusetts, employees are protected during termination by both state and federal laws. Here are the key legal protections:

  • Title VII of the Civil Rights Act of 1964: Title VII of the Civil Rights Act of 1964 is a federal law that prohibits employers from terminating employees based on race, color, religion, sex, or national origin. This federal law applies to employers with 15 or more employees and protects against discriminatory termination practices.
  • Americans with Disabilities Act (ADA): The ADA protects employees with disabilities from termination based on their disability. Employers must provide reasonable accommodations to employees with disabilities unless it causes undue hardship. Terminating an employee instead of accommodating their disability can lead to legal liability under the ADA.
  • Age Discrimination in Employment Act (ADEA): The ADEA prohibits termination of employees based on age for those 40 years or older. Employers with 20 or more employees must avoid discriminatory practices that target older employees for termination.
  • Family and Medical Leave Act (FMLA): The FMLA provides eligible employees with up to 12 weeks of unpaid leave for specific family and medical reasons, protecting them from termination during this period. Employers are prohibited from firing employees for taking FMLA leave or retaliating against them upon return.
  • Occupational Safety and Health Act (OSHA): OSHA protects employees from being terminated for reporting workplace safety violations or hazards or participating in OSHA investigations. This law ensures that employees can exercise their rights to a safe work environment without fear of retaliation.
  • Massachusetts Wage Act: The Massachusetts Wage Act requires timely payment of wages upon termination. Employers who fail to pay wages, including accrued vacation pay, upon termination may be subject to legal consequences.
  • Massachusetts Fair Employment Practices Act: Under the Massachusetts Fair Employment Practices Act, employers are prohibited from terminating employees based on race, color, religious creed, national origin, sex, sexual orientation, gender identity, age, or disability. It applies to employers with six or more employees and also covers retaliation claims.
  • Massachusetts Earned Sick Time Law: Employees are protected from termination for using accrued sick leave under the Massachusetts Earned Sick Time Law. Employers cannot retaliate by terminating employees for exercising their right to take sick leave.
  • Massachusetts Non-Competition Agreement Act: The Massachusetts Non-Competition Agreement Act governs the enforceability of non-compete agreements, ensuring that employees are not unfairly terminated or restricted in their future employment opportunities by overly broad or unenforceable non-compete clauses.

Terminated Employee Benefits in Massachusetts

When an employee is terminated in Massachusetts, they may be entitled to several benefits and protections under state law:

  • Unemployment Benefits: Terminated employees may be eligible for unemployment benefits unless they were dismissed for misconduct. These benefits provide temporary financial assistance while the individual searches for new employment. To apply, employees must file a claim with the Massachusetts Department of Unemployment Assistance (DUA).
  • Final Paycheck: Employers are required to provide a final paycheck that includes all earned wages, including any unused, accrued vacation time, on the day of termination for involuntary terminations. For voluntary resignations, the final payment must be made by the next regular payday.
  • Health Insurance Continuation: Under the federal Consolidated Omnibus Budget Reconciliation Act (COBRA) law, terminated employees of companies with 20 or more employees can choose to continue their employer-sponsored health insurance for 18 months.

Layoffs in Massachusetts

Layoffs in Massachusetts are primarily governed by the federal Worker Adjustment and Retraining Notification (WARN) Act. This law mandates that employers provide at least 60 days’ notice before conducting a mass layoff or plant closing, allowing employees time to prepare for job transitions and access retraining opportunities.

The WARN Act requires notice if a worksite closing affects 50 or more employees, a mass layoff impacts at least 50 employees and one-third of the worksite’s workforce, or if 500 or more employees are affected at a single site. It also applies if anticipated separations within a 90-day period meet these thresholds. However, layoffs affecting employees with fewer than six months of service are exempt from WARN requirements.

In addition to the federal WARN Act, employees in Massachusetts have additional support through the MassHire Department of Career Services (MDCS), including job placement and retraining services. For layoffs resulting from foreign trade impacts, employees may benefit from the Trade Adjustment Assistance (TAA) program.

Resignations in Massachusetts

In Massachusetts, the process of resignation can occur voluntarily or involuntarily:

Voluntary Resignations

Voluntary resignations in Massachusetts occur when an employee leaves their job of their own accord. Employees are generally expected to provide notice, with two weeks being a standard period, though this is not mandated by law unless specified in an employment contract or company policy. Employers are required to pay any earned wages, including unused vacation time, on the next payday following the resignation.

Involuntary Resignations

In Massachusetts, involuntary resignations, or constructive discharge, refer to situations where an employee is forced to resign, often due to pressure or coercion from the employer. This could occur through constructive discharge, where working conditions become so intolerable that the employee feels compelled to resign.

In such cases, the resignation might be treated similarly to a termination, potentially entitling an employee to unemployment benefits and other protections under Massachusetts law. Employers must pay any due wages by the next regular payday following the termination, just as with voluntary resignations.

Legal Cases Related to Wrongful Termination in Massachusetts

1. Former Abington Sewer Superintendent Claims $405,000 for Termination Due to Age Discrimination and Breach of Contract

In the case of James F. Howell v. Abington Sewer Commission, James F. Howell, who served as the sewer superintendent for the town of Abington since 1968, was terminated from his position at age 63 in 2005. Howell alleges that his firing was due to age discrimination and breach of contract.

The Abington Sewer Commission claimed Howell was dismissed for misusing department property and distributing inappropriate material from his work computer, which included humorous and explicit images. Howell argues that these images were inadvertently stored on his work computer after being sent to his private email and denies any wrongdoing regarding his position and business interests.

The trial, which included the display of the disputed images in court, led Howell to seek $405,000 in monetary damages and additional compensation for emotional distress.

Key Lessons Learned from the Case:
  • Employers must handle terminations with consideration for potential age discrimination and contract obligations, ensuring decisions are justified and documented.
  • Allegations of wrongful termination can involve other issues beyond the initial reasons given, including potential breaches of contract.

2. National Denture Provider Settles $150,000 in Sex and Race Discrimination Lawsuit

In the case of EEOC v. Affordable Care, Inc., Affordable Care, a national denture provider, faced allegations of sex and race discrimination filed by the U.S. Equal Employment Opportunity Commission (EEOC). The lawsuit, initiated in 2009, claimed that Nelson Wood, a dentist affiliated with Affordable Care, subjected two female employees, Ariede Mills and Laura Carl, to a hostile work environment characterized by sexual and racial harassment. Despite the repeated complaints, the company failed to take appropriate action. Mills, an African American, was fired in retaliation for her complaints, while Carl, who was white, was forced to quit due to the offensive conduct.

The case was resolved with a $150,000 settlement, with $75,000 awarded to each employee. In addition to the monetary compensation, the settlement required Affordable Care to implement significant changes, including appointing an independent EEO coordinator, conducting anti-discrimination training, and issuing a new anti-discrimination policy. The court-approved settlement emphasized that the company could not avoid liability for the discriminatory actions of its affiliated entities.

Key Lessons Learned from the Case:
  • Retaliation against employees for raising complaints about harassment or discrimination can lead to severe penalties. Employers must ensure that all complaints are handled fairly without reprisal.
  • Companies can be held liable for discriminatory actions taken by their affiliated entities, even if the misconduct occurs at locations distant from corporate headquarters.
  • Employers must actively prevent and address hostile work environments. Failure to provide a safe work environment can result in significant legal consequences, including financial settlements and mandated corrective actions.

3. Former Pharmacist Awarded $2 Million in Gender Discrimination and Retaliatory Termination Case

In the case of Cynthia Haddad v. Wal-Mart Stores Inc., Cynthia Haddad, a former pharmacist at Wal-Mart, was awarded $2 million in damages after a jury found that she had been discriminated against based on her gender, and wrongfully terminated in retaliation for requesting equal pay. Haddad, who had worked for Wal-Mart for over a decade, was fired in 2004, shortly after raising concerns about being paid less than her male counterparts.

Wal-Mart contended that Haddad was terminated for leaving the pharmacy unattended and allowing a technician to use her security code to issue prescriptions. However, Haddad’s lawsuit claimed that her termination occurred shortly after she received a bonus, one that was typically given to pharmacy managers, following her complaint about pay disparity.

In 2007, a jury awarded Haddad $1 million in compensatory damages and another $1 million in punitive damages. Although the judge initially revoked the punitive damages, the Massachusetts Supreme Judicial Court reinstated them, upholding the total $2 million award. The court ruled that the jury had sufficient evidence to conclude that Wal-Mart’s stated reason for Haddad’s termination was a pretext and that the company acted with discriminatory intent.

Key Lessons Learned from the Case:
  • Employers must ensure pay equity among employees, regardless of gender, to avoid discrimination claims.
  • Retaliation against employees who raise concerns about unequal treatment can lead to significant legal and financial consequences.
  • Even if an employer claims a policy violation as grounds for termination, the motive may be investigated further if there is evidence of discriminatory intent or unfair practices.

Learn more about Massachusetts 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.

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