Pennsylvania Termination Laws

July 7th 2024

Pennsylvania’s termination laws are designed to strike a fair balance between the rights of employees and the responsibilities of employers. Both parties need to understand these regulations to ensure that their actions are lawful and their rights are protected. This guide explores the key legal frameworks that govern employment termination in Pennsylvania and highlights the most important considerations employers must keep in mind to ensure their termination practices are compliant and equitable.

This Guide Covers

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

Legal Considerations for Termination in Pennsylvania

When considering termination in Pennsylvania, employers should be aware of several legal considerations:

  • ‘At-Will’ Employment: Pennsylvania follows the “at-will” employment doctrine, wherein employers or employees can terminate their employment at any time, for any reason or no reason at all, without prior notice.
  • Anti-Discrimination Laws: Both federal and Pennsylvania state laws protect employees from termination based on characteristics such as race, gender, age, religion, national origin, disability, sexual orientation, and gender identity. Employers must ensure that termination decisions are based on legitimate business reasons unrelated to these characteristics.
  • Retaliation Protections: Employees are protected from termination for participating in protected activities, such as filing discrimination complaints, reporting workplace safety issues, or participating in investigations.
  • Employment Contracts: If an employee has a written contract or is covered by a collective bargaining agreement, the terms of termination specified in the contract must be followed. These agreements may outline specific procedures or require just cause for termination.
  • Public Policy Violations: Employers cannot terminate employees for reasons that contravene public policy. For example, firing an employee for refusing to engage in illegal acts, serving on a jury, or reporting illegal activities would violate public policy and could result in legal action.
  • Documentation: Maintaining clear and consistent documentation of performance issues or misconduct is crucial. This documentation provides evidence to support termination decisions and can be critical in defending against claims of wrongful termination.
  • Severance Pay: Pennsylvania does not mandate severance pay unless stipulated by an employment contract or company policy. Severance is typically a negotiated benefit.
  • Final Pay: Employers must provide final pay, including unpaid wages and any accrued benefits like vacation leave, under state law and company policy. Final wages do not include severance pay.
  • Notice Requirements: Although Pennsylvania does not require notice of termination for at-will employees, some employment contracts or termination due to plant closures and mass layoffs may require notice periods. Compliance with these requirements is necessary to avoid potential legal issues.

“At-Will” Employment in Pennsylvania

What is “At-Will” Employment?

‘At-will’ employment in Pennsylvania 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, as long as it is not for an illegal reason (such as discrimination or retaliation).

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

While the “at-will” employment doctrine allows for terminating employment relationships at any time for any reason, several key exceptions limit this flexibility in Pennsylvania. These exceptions include:

  • Discrimination: Federal and state laws prohibit termination based on discrimination. This includes protections under the Civil Rights Act, the Americans with Disabilities Act (ADA), the Age Discrimination in Employment Act (ADEA), and the Pennsylvania Human Relations Act. Employers cannot terminate employees based on characteristics such as race, gender, age, religion, disability, or national origin.
  • Retaliation: Employees are protected from termination if they engage in activities that are legally protected, such as filing a discrimination complaint, reporting workplace safety violations, or participating in an investigation. Retaliation claims can arise if an employer fires an employee in response to such actions.
  • Written Contracts: If there is a formal employment contract or a collective bargaining agreement in place, it may specify terms of employment, including grounds for termination. Such contracts may stipulate that an employee can only be terminated for specific reasons or through certain procedures.
  • Implied Contracts: Even without a formal written contract, an implied contract may exist if there are outlined terms and conditions in the employee handbook, company policies, or even verbal promises made by employers. These implied contracts can limit the employer’s ability to terminate an employee at will.
  • Good Faith and Fair Dealing: Courts may 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.

Employment Under Contract in Pennsylvania

In Pennsylvania, employment under contract provides specific terms that govern the employment relationship, differing from the “at-will” employment doctrine. These contracts may outline conditions such as job duties, salary, benefits, and termination procedures.

Employment contracts often require “just cause” for termination, meaning an employer must provide a legitimate reason that aligns with the contract’s terms. This contrasts with the at-will employment doctrine, where no reason is necessary for termination.

Contracts can specify notice periods that employers must provide before terminating an employee. This gives employees a defined amount of time to transition out of the role. Employment contracts can also include severance agreements, which outline the compensation and benefits an employee will receive upon termination. These agreements ensure that employees are financially supported during their transition.

Lawful Termination in Pennsylvania

Legal Grounds for Termination in Pennsylvania

In Pennsylvania, termination of employment generally follows the “at-will” doctrine, allowing employers or employees to end the relationship at any time without cause. However, several legal grounds and exceptions exist:

  • Just Cause: When specified in employment contracts or collective bargaining agreements, termination must be based on legitimate grounds, such as violations of specific job responsibilities or misconduct.
  • Performance Issues: Employees can be terminated for consistently failing to meet job expectations or performance standards. Proper documentation of performance reviews and feedback is crucial to support such decisions.
  • Misconduct: Serious violations of company policies, such as theft, harassment, or breach of contract, can warrant termination. Employers must ensure they have clear policies in place and conduct thorough investigations before proceeding.
  • Reductions in Force (Layoffs): Employers may terminate employees due to economic downturns, organizational restructuring, or changes in business needs. These layoffs should be based on legitimate business reasons and not discriminate against any protected class.
  • Legal Violations: Employers must avoid termination based on discriminatory factors such as race, gender, age, or disability. Termination should not violate public policy, such as firing an employee for refusing illegal acts or reporting unlawful activities.

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

How Do I File a Wrongful Termination Claim in Pennsylvania?

To file a wrongful termination claim in Pennsylvania, follow these steps:

  1. Collect Relevant Documents: Gather all documents related to your employment, termination, and any communications that may support your claim. This includes employment contracts, performance reviews, termination notices, and emails.
  2. Determine the Legal Basis of Your Claim: Identify the legal basis for your claim, such as discrimination, retaliation, breach of contract, or violation of public policy.
  3. File with the Equal Employment Opportunity Commission (EEOC): You can file your claim with the Equal Employment Opportunity Commission (EEOC) within 180 days of the alleged discrimination or retaliation. The EEOC will investigate your claim and may mediate or litigate on your behalf.
  4. File with the Pennsylvania Human Relations Commission (PHRC): Alternatively, or additionally, you can file your claim with the Pennsylvania Human Relations Commission (PHRC) within 180 days of the alleged discriminatory or retaliatory act. The PHRC investigates and can provide remedies for violations of Pennsylvania’s anti-discrimination laws.
  5. Seek Legal Advice: Consulting with an employment lawyer can help you navigate the process and ensure your claim is properly filed and supported.

Legal Protections During Termination in Pennsylvania

  • Pennsylvania Human Relations Act (PHRA): The Pennsylvania Human Relations Act (PHRA) prohibits discrimination based on race, color, religious creed, ancestry, age, sex, national origin, disability, and use of a guide or support animal because of blindness, deafness, or physical handicap. This state law provides protections against discriminatory practices during termination and allows employees to file complaints with the Pennsylvania Human Relations Commission for investigation and potential action.
  • Pennsylvania Whistleblower Law: The Pennsylvania Whistleblower Law protects employees who report illegal activities or violations of laws, rules, or regulations within their workplace (“whistleblowers”). It prohibits retaliation against employees who disclose or threaten to disclose such information, ensuring their rights are safeguarded during termination if related to whistleblowing activities.
  • Pennsylvania Wage Payment and Collection Law (WPCL): The Pennsylvania Wage Payment and Collection Law (WPCL) requires employers to promptly pay wages to terminated employees, including accrued vacation time or other earned benefits. It ensures that employees receive their final paychecks promptly, typically on their last day of employment or within a designated time frame after termination, depending on the circumstances.
  • Worker Adjustment and Retraining Notification (WARN) Act: The federal Worker Adjustment and Retraining Notification (WARN) Act mandates that employers with 100 or more full-time employees provide at least 60 days’ advance notice before mass layoffs, plant closings, or significant workforce reductions. This notice period allows affected employees and their communities time to adjust and seek alternative employment or retraining opportunities, fostering a smoother transition during periods of economic change. Note: Pennsylvania does not have a state-specific WARN Act.
  • Fair Labor Standards Act (FLSA): The Fair Labor Standards Act (FLSA) establishes federal standards for minimum wage, overtime pay, recordkeeping, and child labor. It protects employees by ensuring they receive fair compensation for their work and prohibits retaliation against employees who assert their rights under the Act, such as filing complaints about wage violations, which includes protections during termination.
  • Family and Medical Leave Act (FMLA): The Family and Medical Leave Act (FMLA) provides eligible employees with unpaid, job-protected leave for specific family and medical reasons. It ensures that employees can take time off for their serious health conditions, to care for a family member with a serious health condition, or for certain reasons related to military service without the fear of losing their job or benefits during or after their leave period.

Terminated Employee Benefits in Pennsylvania

Terminated employees in Pennsylvania may be entitled to certain benefits and protections, depending on various factors such as employment contracts, company policies, and state regulations.

  • Final Pay: Employers must provide final wages promptly upon termination, including payment for accrued but unused vacation time and any other benefits accrued up to the termination date.
  • Severance Pay: Terminated employees may receive severance pay depending on their employment contract, company policy, or collective bargaining agreement. While Pennsylvania does not require severance pay by law, it is often provided as part of a negotiated agreement.
  • Unemployment Benefits: Employees who are laid off may be eligible for unemployment benefits through the Pennsylvania Department of Labor & Industry. Eligibility is determined based on factors such as prior earnings and the circumstances of the layoff.
  • Health Insurance Continuation: Laid-off employees may have the option to continue their health insurance coverage through COBRA (Consolidated Omnibus Budget Reconciliation Act) or Pennsylvania Mini-COBRA Law, allowing them to maintain coverage for a limited period by paying the full premium themselves.

Layoffs in Pennsylvania

Layoffs in Pennsylvania refer to the reduction of employees due to factors such as economic downturns, organizational restructuring, or other business-related reasons. Employers conducting layoffs must comply with the federal Worker Adjustment and Retraining Notification (WARN) Act which requires employers with 100 or more employees to provide at least 60 days advance notice before plant closings or mass layoffs affecting 50 or more employees at a single site of employment. Employers are encouraged to provide advance notice to affected employees, local government officials, and the state’s dislocated worker unit as part of their compliance with the federal regulations.

Resignations in Pennsylvania

Voluntary Resignations

A voluntary resignation occurs when an employee chooses to end their employment. The decision is initiated by the employee without coercion or pressure from the employer. Employees are not required to provide a resignation letter unless specified in their employment contract or company policy. Although not required, employees are generally expected to provide notice at least two weeks to a month.

Employees who resign voluntarily may not be entitled to severance pay unless specified in their employment contract or company policy. They are only entitled to final wages, including payment for accrued but unused vacation leave, on the employee’s last day of employment.

Involuntary Resignations

Involuntary resignation, also known as constructive dismissal, occurs when an employer creates a hostile work environment or conditions that make continued employment intolerable for the employee. The employee may resign under duress due to the employer’s actions or policies. In such cases, the resignation is considered involuntary because the employer’s conduct effectively forced the employee to resign.

Legal Cases Related to Wrongful Termination in Pennsylvania

1. $1.26 Million Awarded to Former Police Officer in Retaliation Case Against Borough of Dunmore

In Smith v. Borough of Dunmore, the plaintiff, Thomas Smith, a former police officer, was awarded $1.26 million in a wrongful termination lawsuit. Smith alleged that he was terminated in retaliation for filing a grievance about unfair labor practices and for his support of a political candidate opposed by the borough officials. Smith’s termination was claimed to be in violation of his First Amendment rights to free speech and association. The jury found that Smith’s termination was retaliatory and awarded him $1.26 million, which included compensation for lost wages, emotional distress, and punitive damages.

Key lessons learned from this case:

Public employees have the right to free speech and can challenge wrongful termination if they believe it was retaliatory for exercising their First Amendment rights. This case demonstrates the protections afforded to employees under the First Amendment.

The case highlights the importance of documenting any instances of retaliation or unfair treatment, which can be critical in supporting wrongful termination claims. Proper documentation helped Smith prove his case.

2. Pennsylvania Supreme Court Rules in Favor of Employee in Gender Discrimination Lawsuit Against Harpster

In Weaver v. Harpster, the plaintiff, Weaver, worked for Harpster as an administrative assistant. She filed a wrongful termination lawsuit claiming she was fired due to her gender after she refused the sexual advances of her employer. The Pennsylvania Supreme Court ruled in favor of Weaver, emphasizing that the Pennsylvania Human Relations Act (PHRA) protects employees from gender discrimination, even in small businesses with fewer than four employees. Weaver was awarded damages for lost wages and emotional distress.

Key lessons learned from this case:

Employees are protected from gender discrimination under the PHRA, regardless of the size of the employer. This case underscores the applicability of anti-discrimination laws in all workplaces, not just larger employers.

Both employees and employers must be aware of the protections afforded under the PHRA, ensuring that discriminatory practices are avoided and complaints are addressed promptly. The case demonstrates the breadth of PHRA’s coverage.

3. Court Sides with Employee in Disability Discrimination Case Against Quaker Oats Co.

In Bialko v. Quaker Oats Co., the plaintiff, John Bialko, sued his former employer for wrongful termination under the Americans with Disabilities Act (ADA). Bialko, who had a disability, alleged that he was terminated because of his disability, despite being able to perform his job with reasonable accommodations. Bialko had requested accommodations for his disability, but Quaker Oats failed to provide them and instead terminated his employment. The court ruled in favor of Bialko, awarding him compensation for lost wages, emotional distress, and punitive damages.

Key lessons learned from this case:

The ADA protects employees from termination based on disability and requires employers to provide reasonable accommodations. Employers must engage in an interactive process with employees to determine appropriate accommodations.

Employers must ensure that they make reasonable accommodations for employees with disabilities and avoid discriminatory practices. Failure to provide accommodations can lead to significant legal liability.

Learn more about Pennsylvania 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.