Tread Carefully when Terminating Employees during a Pandemic

With the uncertainty surrounding COVID-19, there are a few additional considerations Arizona employers must keep in mind when terminating the employment of a current employee.

Generally, Arizona employers enjoy wide latitude when hiring and firing due to the State’s doctrine of “at will” employment. Under at-will employment, an employer is not required to establish “just cause” before terminating employment and is generally free to terminate at any time so long as the employer does not violate a state or federal anti-discrimination law in the process.

With the worldwide COVID-19 pandemic bringing workplaces around the globe to a halt, an unprecedented shift has occurred in how employees and employers carry out their daily work tasks. This sudden change has led many employers into uncharted territory when it comes to employee discipline and terminations post COVID-19.

These are the top four considerations for an employer who is contemplating terminating an employee during or after the COVID-19 pandemic:

Be aware of applicable laws. While an Arizona employer does not have to show just cause for termination, it may have to defend a termination if it appears to be for “bad cause.” Bad cause would mean that the employer’s motive for termination violated one or more state or federal law relating to employee rights.

There are several laws in place that provide protections to employees who are out of work due to a serious health condition, and an employer must be careful to consider each of these laws to ensure that terminating the employee during or shortly after the COVID-19 pandemic does not put the company at risk. Laws such as the Americans with Disabilities Act (ADA), Family Medical Leave Act (FMLA) and Arizona’s paid sick time law all provide additional requirements for employers attempting to terminate an employee who has recently missed work due to a medical issue, including COVID-19.

In addition to these preexisting protections, employees have been given broader protection under the Families First Corona Response Act (FFCRA), which was recently signed into law on March 27, 2020. Under the FFCRA, the FMLA has been expanded to provide additional protections for employees, including additional leave time, expanding coverage to more employees, and providing up to 12 weeks of pay for the time the employee is out of work. The FFCRA also provides for up to 80 hours of additional paid sick leave for employees who are out of work due to COVID-19.

Consider the whole situation. Employers should be careful to consider the bigger picture when making employment decisions, including when contemplating terminations during the pandemic. Additional considerations such as an employee’s race and age must be taken into account. For instance it would violate the law to require employees of Asian descent with a fever to quarantine and not employees of other ethnicities. Similarly, it would violate the law to terminate or lay off an “older” employee (over 40 years of age) over a younger employee, even if the motive was to protect the older employee from the risk of getting sick.

An employer may also want to think twice before terminating employees if the company took advantage of stimulus funds under the CARES Act. For instance, an employer who took advantage of a Paycheck Protection Program loan should consider the implications of terminating employees, as loan forgiveness is dependent upon the company making a showing that it maintained the same number of employees over the two months following receipt of the PPP loan funds.

Documentation is key when terminating an employee! Despite the fact that an Arizona employer is not required to show just cause for a termination, it is still a best practice. An employer’s best defense against a claim of discrimination or wrongful termination is to present documentary evidence to support the termination. This includes any evidence of the employee showing a disregard for the employer’s interest, including misconduct or violation of company rules.

Additionally, evidence that the employer took steps to work with the employee, or evidence that the employer treats other similarly situated employees in the same fashion can also be helpful to fight claims of wrongful termination and discrimination.

When in doubt, consult an attorney. When in doubt, contact an employment attorney prior to the termination! Many great companies have ended up on the wrong side of a lawsuit because of something a manager said in a termination meeting or because a well-intentioned supervisor violated an employee’s rights by the timing or fashion in which the termination was carried out. With all the recent changes to employment laws it is more important than ever that organizations ensure they are in compliance when making reductions in staff.

Joshua C. Black is an Arizona employment attorney located in Phoenix. The Law Office of Joshua Black provides focused representation to its clients in employment disputes.