New Mexico termination laws define the rules for ending employment relationships in the state. This guide covers the principles of at-will employment and relevant state and federal regulations that protect employee rights. This article helps employers and employees understand the termination process and ensure compliance with the law.
This Guide Covers
Legal Considerations for Termination in New Mexico
At-Will Employment in New Mexico
- What is At-Will Employment?
- What are the Exceptions to At-Will Employment in New Mexico?
- Employment Under Contract in New Mexico
Lawful Termination in New Mexico
- Legal Grounds for Termination in New Mexico
- How Do I File a Wrongful Termination Claim in New Mexico?
Legal Protections During Termination in New Mexico
Terminated Employee Benefits in New Mexico
Layoffs in New Mexico
Resignations in New Mexico
Legal Cases Related to Wrongful Termination in New Mexico
Legal Considerations for Termination in New Mexico
When terminating an employee in New Mexico, it’s important to consider several legal factors to ensure compliance with state and federal laws. This includes:
- Anti-Discrimination Laws: New Mexico prohibits discrimination in employment based on various protected characteristics, including race, color, national origin, sex, age, disability, and religion. These laws are enforced under the New Mexico Human Rights Act and Federal Title VII of the Civil Rights Act.
- Retaliation Protections: Employees in New Mexico are protected from retaliation for engaging in protected activities, such as filing a discrimination complaint, participating in an investigation, or opposing discriminatory practices.
- Final Paycheck: In New Mexico, when an employee is discharged, any unpaid wages that are a fixed amount must be paid within five days upon demand, while other wage calculations must be settled within ten days of discharge.
- Workers’ Compensation: Employers in New Mexico are required to provide workers’ compensation insurance. If an employee is terminated after filing a workers’ compensation claim, it could lead to claims of retaliation
At-Will Employment in New Mexico
What is At-Will Employment?
At-will employment is a legal doctrine followed by most states in the United States, including New Mexico. Under this doctrine, either the employer or the employee can terminate the employment relationship at any time, for any lawful reason, without prior notice. This means that employees can quit their jobs for any reason, and employers can dismiss employees without providing a cause as long as it does not violate any laws or contractual obligations.
What are the Exceptions to At-Will Employment in New Mexico?
While at-will employment provides flexibility, several exceptions protect employees from wrongful termination. In New Mexico, these exceptions include:
- Public Policy Exception: An employer cannot terminate an employee for reasons that comply with federal and state laws or refuse to disobey the law. For example, an employee cannot be fired for refusing to engage in illegal activity, reporting illegal practices (whistleblowing), or taking time off for jury duty to vote.
- Implied Contract Exception: If an employer’s actions or statements create an implied contract, the at-will employment presumption may be altered. For instance, if an employee is led to believe that their job is secure or that they will not be terminated without just cause, this could form an implied contract. Employees may contest termination if they can prove their employer promised job security or provided specific reasons for termination.
- Discriminatory Termination: Under federal and state anti-discrimination laws, employees are protected from termination based on race, color, national origin, disability, sex, age, religion, or other protected characteristics. Employees who are terminated for discriminatory reasons may have grounds for a wrongful termination claim.
- Employer Retaliation: Employees cannot be fired for exercising their legal rights, such as filing a complaint regarding workplace safety or participating in an investigation related to employment discrimination.
Employment Under Contract in New Mexico
An employment contract in New Mexico is a legally binding agreement between an employer and an employee that outlines the terms of employment. These contracts are used when hiring employees but can also apply to contractors, consultants, and freelance workers. An employment contract may cover various aspects of the employment relationship, including salary, benefits, job responsibilities, duration of employment, and causes of termination. Without a formal contract, employees are considered at-will and can be terminated at any time for any lawful reason.
Employment contracts are enforceable under New Mexico law, which includes provisions for restrictive covenants like non-compete agreements, provided they are reasonable in duration, geographic scope, and offer. Healthcare providers are an exception to the non-compete agreements.
Different types of employment contracts in New Mexico include:
- Permanent Employment Agreement: For permanent full-time or part-time employees with defined hours and compensation, with no predetermined end date.
- Fixed-Term Employment Agreement: For employees hired for a specific duration, such as seasonal workers.
- Contractor Agreement: For independent contractors who are not classified as employees, outline their work terms and compensation.
Lawful Termination in New Mexico
Legal Grounds for Termination in New Mexico
In New Mexico, the at-will doctrine allows employers to fire employees for any reason that isn’t illegal. However, there are specific legal grounds that employers must consider when terminating employees:
- Performance-Related Issues: Employers can lawfully terminate an employee for poor job performance, such as consistent underperformance, failure to meet job expectations or duties, inability to meet productivity standards, negligence or carelessness in carrying out assigned tasks, and unauthorized leave.
- Misconduct: Termination for misconduct is another legal ground that can include violation of company policies, workplace harassment or violence, substance abuse on the job, dishonesty, or theft.
Read our complete guide to firing employees in New Mexico for further information.
How Do I File a Wrongful Termination Claim in New Mexico?
Employees must first confirm that their termination violated any federal or state laws, such as discrimination, retaliation, or employment contract violations, before they may pursue a wrongful termination claim in New Mexico.
If the claim involves discrimination, employees can file a claim with the Equal Employment Opportunity Commission (EEOC) or the New Mexico Department of Workforce Solutions (NMDWS).
If employees’ claim is not related to discrimination or retaliation but involve breach of contract or other wrongful actions, they can pursue a civil lawsuit. Employees are advised to consult an employment attorney to assist them in understanding their rights and guide them through filing in the appropriate avenue, whether with the EEOC, NMDWS or in state court.
Legal Protections During Termination in New Mexico
New Mexico employees are protected by a variety of state and federal laws that govern termination. These laws protect employees:
- Title VII of the Civil Rights Act of 1964: Title VII of the Civil Rights Act of 1964 is a federal law prohibiting employment discrimination based on race, color, religion, sex, or national origin.
- New Mexico Human Rights Act (NMHRA): The NMHRA is a state law that mirrors Title VII of the Civil Rights Act of 1964, prohibiting discrimination based on race, color, national origin, sex, disability, religion, and sexual orientation.
- Americans with Disabilities Act (ADA): The ADA is a federal law protecting qualified employees with disabilities from discrimination in employment.
- Age Discrimination in Employment Act (ADEA): The ADEA is a federal law protecting employees aged 40 and older from discrimination based on age.
- Family and Medical Leave Act (FMLA): The FMLA provides eligible employees the right to take unpaid leave for specific family and medical reasons without the risk of losing their job. If an employee is terminated for taking leave under the FMLA, they may have grounds for a wrongful termination claim.
- New Mexico Minimum Wage Act: The New Mexico Minimum Wage Act establishes the minimum wage and includes provisions to protect employees from retaliation for asserting their rights under the law.
- New Mexico Whistleblower Protection Act: The New Mexico Whistleblower Protection Act is a federal law that protects employees from retaliation for reporting illegal activities or violations of public policy.
Terminated Employee Benefits in New Mexico
Terminated employees in New Mexico may be eligible for various benefits depending on the circumstances of their termination:
- Unemployment Benefits: The employee may apply for unemployment benefits through the New Mexico Department of Workforce Solutions (NMDWS) if the termination was due to circumstances beyond their control, such as layoffs or non-disciplinary terminations. The worker must be actively looking for new work and meet certain wage and work history requirements in order to be eligible.
- Continuation of Health Insurance Benefits: Employees of bigger organizations (20 or more employees) may continue to have their health insurance coverage for up to 18 months upon termination under the federal Consolidated Omnibus Budget Reconciliation Act (COBRA). New Mexico Mini-COBRA provides comparable access to health benefits for employees in businesses with fewer than 20 employees.
- Final Paycheck: If a fixed rate employee is dismissed in New Mexico, they are entitled to receive their final paycheck after five days of termination. While other employees who are compensated by task, piece, commission basis, or other method of calculation, are entitled to receive their final paycheck within ten days of their termination.
Layoffs in New Mexico
Layoffs in New Mexico are governed by the federal Worker Adjustment and Retraining Notification (WARN) Act, which requires employers with 100 or more employees to provide at least 60 days’ notice for mass layoffs affecting 50 or more workers at a single location.
Since New Mexico does not have a state-specific layoff notification law, smaller companies with fewer than 100 employees are not subject to the federal WARN Act, these employers are not required to provide advance notice for layoffs.
Resignations in New Mexico
In New Mexico, resignations can either be voluntary or involuntary.
Voluntary Resignations
Voluntary resignation is when an employee chooses to end their employment due to various reasons, including personal circumstances, job dissatisfaction, or better opportunities. In New Mexico, no statute requires an employee to provide two weeks’ notice before resigning. Employees can choose to leave their positions without advance notice, though it is generally considered professional etiquette to do so.
Involuntary Resignations
Involuntary resignation, also referred to as constructive discharge, happens when an employee resigns due to intolerable working conditions that leave them with no reasonable alternative but to quit. The resignation is handled similarly to a termination. However, if the employer’s conduct were proven to be discriminatory, retaliatory, or harassing, then New Mexico law recognizes constructive discharge and employees may file a wrongful termination claim.
Legal Cases Related to Wrongful Termination in New Mexico
1. Orthopaedic Health Services Settles $165,000 Over Wrongful Discharge Due to Disability Discrimination
In EEOC v. New Mexico Orthopaedics Associates, P.C., the EEOC filed a lawsuit against New Mexico Orthopaedics Associates (NMOA) for associational disability discrimination under the Americans with Disabilities Act (ADA). The case involved Melissa Yalch Valencia, a temporary staffing agency employee, who was allegedly fired and denied a full-time position due to her association with her disabled child.
According to the EEOC, Valencia’s dismissal violated the ADA, which prohibits employers from discriminating against employees based on their association with a disabled individual. Despite performing her job adequately, Valencia was penalized because of her relationship with her daughter, who had disabilities.
After failed mediation efforts, the EEOC filed a lawsuit in the U.S. District Court for the District of New Mexico.
The settlement requires NMOA to pay Valencia $165,000 and provide her with a letter of reference. NMOA must also implement multiple corrective measures, including conducting annual anti-discrimination training for all employees and developing an evaluation system that considers compliance with equal employment laws. In addition, NMOA will report to the EEOC regarding any future disability discrimination complaints, and the court will monitor compliance for two years.
Valencia expressed relief with the resolution, emphasizing that no parent should face employment discrimination due to a disabled child. This case marks the first associational disability claim pursued by the EEOC in federal court, setting a precedent for future enforcement of ADA protections.
Key Lessons Learned from this Case:
- The ADA not only protects individuals with disabilities but also extends to those associated with disabled individuals, such as family members or caregivers.
- Employers must ensure that employment decisions are based on qualifications, not personal circumstances related to disabilities.
- Organizations, especially those in the medical field, should provide regular anti-discrimination training to foster a culture of compliance and awareness.
2. Bank in Albuquerque Pays $230,000 Over Unlawful Discharge Due to Age and Sex Discrimination
The U.S. EEOC filed a lawsuit against BOK Financial Corporation, doing business as Bank of Albuquerque, for age and sex discrimination under Title VII of the Civil Rights Act and the Age Discrimination. The action was brought about by the bank’s decision to fire two long-time managers, Elizabeth and Morantes and Yolanda Fernandez. The EEOC claims that the women were fired because of their gender and age (both were over 40), and the bank held them to performance standards that did not apply to younger male workers in comparable roles.
The Bank of Albuquerque settled $230,000 with Morantes and Fernandez and agreed to take corrective actions to prevent future discrimination. These corrective actions include posting anti-discrimination notices, providing anti-discrimination training, and reporting compliance initiatives to the EEOC.
Key Lessons Learned from this Case:
- The lawsuit highlights the protections provided by the ADEA and Title VII of the Civil Rights Act to workers who are subjected to age and gender discrimination.
- Regardless of age or gender, employers are required to apply performance requirements to all employees in an equitable and consistent manner.
- Corrective measures such as training and regular reporting prevent future violations and promote a discrimination-free workplace.
3. Consulting and Training Service Provider Settles $120,000 for Unlawfully Firing Employee Due to Disability and Age Discrimination
In EEOC v. DXP Enterprises, Inc., the EEOC filed a lawsuit against DXP Enterprises, Inc., a safety and environment consulting and training services provider that is doing business as DXP Safety Alliance, after allegations of disability and age discrimination. The case involved Connie Brooks, who DXP hired but fired a few days later upon the company discovering her prior back injury.
The EEOC argued that Brooks was fired due to her disability and the intersection of her disability and age, in violation of the ADA and the ADEA.
In addition, DXP Enterprises agreed to settle the case for $120,000 and other relief measures, such as implementing policies and procedures to address disability and age discrimination and training for employees, managers, and human resources officials to demonstrate commitment to anti-discrimination practices and compliance with employment laws.
Key Lessons Learned from this Case:
- Employers must respect and understand that misconceptions should not influence employment decisions regarding an employee’s disability or age.
- Employers are encouraged to take proactive measures, including establishing clear policies and training, to mitigate the risk of legal disputes related to discrimination.
- Comprehensive training programs on discrimination are essential for preventing future issues and creating an inclusive workplace culture.
Explore our comprehensive guide to New Mexico Labor Laws to learn more.
Important Cautionary Note
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