Michigan Termination Laws

In Michigan, termination laws dictate the conditions under which an employee may be dismissed, ensuring the process is conducted fairly and legally. Both employers and employees must understand these regulations to manage terminations properly and reduce the risk of disputes.

This article explores the key aspects of Michigan termination laws, offering a comprehensive overview of employee rights and responsibilities.

This Guide Covers

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

Legal Considerations for Termination in Michigan

When terminating an employee in Michigan, there are several legal considerations to keep in mind to ensure compliance with state and federal laws:

  • “At-Will” Employment: Generally, employers and employees in Michigan can terminate the employment relationship for any reason that is not illegal, at any time for any reason. However, this principle does not apply if there is a specific employment contract or a collective bargaining agreement that dictates otherwise.
  • Discrimination Laws: Employers must ensure that terminations do not violate federal and state anti-discrimination laws. This includes prohibitions against discrimination based on race, color, religion, sex, national origin, disability, age, or other protected characteristics.
  • Retaliation: Employers are prohibited from terminating an employee in retaliation for engaging in protected activities, such as filing a workers’ compensation claim, reporting any safety violations, or participating in an investigation regarding discrimination or harassment.
  • Employment Contracts: If an employee has an employment contract, the terms of that contract must be followed during termination. This includes any agreements related to the duration of employment, grounds for termination, and severance packages.
  • Final Paycheck: Michigan law requires that an employer’s final paycheck, including any accrued vacation time (if applicable), be paid on the next regular scheduled payday. Employers must ensure that all wages and benefits owed to the employee are paid promptly.

“At-Will” Employment in Michigan

What is “At-Will” Employment?

“At-will” employment is a legal doctrine that allows an employer or employee to terminate the employment relationship at any time, for any reason (as long as it is not illegal), without prior notice. This employment framework is common in many states, including Michigan, and is designed to provide both employers and employees with a flexible framework for managing the employment relationship. Despite the general flexibility, there are legal exceptions to “at-will” employment.

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

In Michigan, while employment is generally “at-will,” there are several notable exceptions to this rule that can affect the termination of employees. These exceptions include:

  • Discrimination: Employers cannot terminate employees based on protected characteristics such as race, color, religion, sex, origin, age (40 or older), or disability. This protection is provided under federal and state laws.
  • Retaliation: Employers are prohibited from firing employees in retaliation for engaging in protected activities. These activities include filing a workers’ compensation claim, reporting unsafe working conditions or violations of workplace safety laws, taking leave under the FMLA or PMLA, and participating in investigations or lawsuits related to discrimination or other employment rights.
  • Public Policy: Terminations that violate public policy are not allowed. An employer cannot fire an employee for refusing to engage in illegal activities or reporting unlawful conduct or violations of public laws.
  • Employment Contracts: If an employee has an explicit contract that specifies terms for termination, including notice requirements or conditions for dismissal, the terms of that contract must be followed. Breaching an employment contract can lead to legal claims.
  • Implied Contracts: Statements made in employee handbooks or during the hiring process can create implied contracts that modify the “at-will” relationship. For example, if an employer outlines specific procedures for termination in the employment handbook, this may be enforceable.

Employment Under Contract in Michigan

Employment under contract in Michigan involves an agreement between an employer and an employee that specifies terms and conditions beyond those of standard at-will employment.

Contracts may specify a definite term of employment and often detail the conditions under which termination can occur including the cause of termination and notice requirements. Termination clauses should address how and under what conditions either party can end the employment relationship.

Lawful Termination in Michigan

Legal Grounds for Termination in Michigan

Termination of an employee in Michigan is permissible under the “at-will” employment doctrine, meaning that an employer can terminate an employee for almost any reason, as long as it does not violate specific legal protections. Here are the key legal grounds for terminating an employee in Michigan:

  • Performance Issues: Employers cannot legally terminate employees for poor job performance or failure to meet the company’s standards, provided the performance issues are documented and communicated to the employee.
  • Misconduct: Terminations for misconduct, such as theft, fraud, violence, or substance abuse, are generally legal if the misconduct is substantiated and documented.
  • Company Downsizing or Layoffs: Employers may terminate employees as part of a downsizing or restructuring process.
  • Violation of Company Policies: Employees can be terminated for violating company policies, especially if these policies are clearly communicated and consistently enforced.
  • End of Employment Contract Term: If an employee is hired under a fixed-term contract, their employment can end when the term expires, as long as the termination follows the terms outlined in the contract.

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

How Do I File a Wrongful Termination Claim in Michigan?

Before employees file a wrongful termination claim in Michigan, they have to determine if their termination falls under one of the recognized exceptions to “at-will” employment. Employees are advised to gather any evidence related to their termination. Employees who believe they have been wrongfully terminated can file a complaint with the Michigan Department of Civil Rights (MDCR) or the Equal Employment Opportunity Commission (EEOC).

Legal Protections During Termination in Michigan

In Michigan, both state and federal laws provide legal protections for employees during termination. Key legal protections during termination in Michigan are:

  • Title VII of the Civil Rights Act of 1964: Title VII of the Civil Rights Act of 1964 prohibits termination based on race, color, religion, sex, or national origin. The Act protects employees from termination and retaliation for participating in discrimination investigations or lawsuits.
  • Americans with Disabilities Act (ADA): The Americans with Disabilities Act (ADA) protects employees from termination based on disability and requires reasonable accommodations for employees with disabilities. The Act prohibits retaliation for filing age discrimination claims or participating in investigations.
  • Age Discrimination in Employment Act (ADEA): The Age Discrimination in Employment Act (ADEA) protects employees 40 years of age and older from termination based on age and prohibits retaliation for filing age discrimination claims or participating in investigations.
  • Family and Medical Leave Act (FMLA): The Family and Medical Leave Act (FMLA) protects employees who take qualified family or medical leave. Employers cannot terminate employees for taking FMLA leave or requesting accommodations under the act. The Act prohibits retaliation for exercising FMLA rights.
  • Occupational Safety and Health Act (OSHA): The Occupational Safety and Health Act (OSHA) protects employees from retaliation for reporting workplace safety violations or participating in OSHA investigations.
  • Fair Labor Standards Act (FLSA): The Fair Labor Standards Act (FLSA) protects employees from retaliation for asserting rights related to wage and hour laws, such as reporting unpaid overtime or minimum wage violations.
  • Michigan Anti-Discrimination Law: The Elliott-Larsen Civil Rights Act (ELCRA) protects employees from termination based on race, color, religion, sex, national origin, age (40 or older), disability, or genetic information. This law also prohibits employers from retaliation for filing a discrimination complaint or participating in an investigation under the ELCRA.
  • Michigan Whistleblowers’ Protection Act: The Whistleblowers’ Protection Act protects employees from retaliation for reporting law violations or engaging in activities protected by the act, such as reporting unsafe working conditions or illegal activities.
  • Michigan Paid Medical Leave Act: The Paid Medical Leave Act protects employees who take leave under the PMLA. Employers cannot terminate employees for taking or requesting medical leave or using paid sick leave.
  • Workers’ Compensation Act: Under the MCL§ 418.301 (Workers’ Disability Compensation Act), employers are prohibited from retaliating against employees for filing a workers’ compensation claim. Employees cannot be terminated for seeking or receiving workers’ compensation benefits.

Terminated Employee Benefits in Michigan

When an employee is terminated in Michigan, various benefits come into play, depending on the nature of the termination and the employee’s specific circumstances. Terminated employees can expect:

  • Final Paycheck: Under MCL § 408.475, employers are required to provide terminated employees their final paycheck on the next scheduled payday. For employees engaged in any phase of hand harvesting crops, the employer is required to pay all wages earned and due within one working day of the termination.
  • Unemployment Benefits: Employees terminated for misconduct or poor performance may not be eligible for unemployment benefits. However, those laid off or terminated without fault may qualify for unemployment insurance benefits through the Michigan Unemployment Insurance Agency (UIA).
  • Health Insurance: Under the federal Consolidated Omnibus Budget Reconciliation Act (COBRA), employees who lose their jobs may be eligible to continue their health insurance coverage for up to 18 months. The state does not have a Mini-COBRA law but has a Non-Profit Health Care Corporation Reform Act that allows workers of smaller companies to convert their group health plan to an individual self-pay marketplace plan.

Layoffs in Michigan

Michigan does not have a state-specific WARN Act, it follows the federal WARN Act provisions. The federal Federal Worker Adjustment and Retraining Notification (WARN) Act requires employers with 100 or more full-time employees to provide 60 days’ notice before a mass layoff or plant closing affecting 50 or more workers. This law is designed to give workers time to prepare for the loss of employment and to find new jobs or training.

Resignations in Michigan

In Michigan, resignations can be categorized into two main types: voluntary and involuntary.

Voluntary Resignations

Voluntary resignations occur when an employee leaves their job of their own accord. This decision is made independently by the employee, often due to personal reasons, career advancement, or dissatisfaction with their current role.

Michigan does not have a state law requiring employees to provide a notice before resigning. However, employees are expected to provide a resignation letter two weeks before the resignation date, or it can vary depending on the employment contract or company policies.

Upon voluntary resignation, employees are entitled to receive their final paycheck, which includes payment for all hours worked up to their last day and must be paid within a specific timeframe. Employees who voluntarily resign may not be eligible for unemployment benefits.

Involuntary Resignations

Involuntary resignations or constructive dismissal occurs when an employee is compelled to leave their job due to circumstances beyond their control. Employees are forced to resign because the employer’s actions made continued employment intolerable due to working conditions, demotions, or other external pressures. This type of resignation often falls under the category of wrongful termination.

Employees who resign involuntarily may be eligible for unemployment benefits if they can demonstrate that their resignation was due to circumstances beyond their control. Employees facing involuntary resignations are advised to document the reasons for their departure and any communications with their employer, which can be important in unemployment claims or legal disputes.

Legal Cases Related to Wrongful Termination in Michigan

1. Jury Awards $705,000 to Nursing Home Staff for Retaliatory Termination Case

Elizabeth Williamson, a respiratory therapy manager at a nursing home operated by Omni Continuing Care. In 2009, the Michigan Department of Community Health (MDCH) investigated the facility. The investigation revealed multiple critical failures, including inadequate monitoring of patients, falsified nursing notes, and inappropriate patient restraints. A notable incident involved a patient who died after being given insulin without proper monitoring, and another involved a patient who died after pulling out his tracheostomy tube. The investigation also highlighted deficiencies in staff training, insufficient staffing, and lack of accountability in the nursing department.

According to the state investigator, Williamson was the only manager who provided honest and accurate information, contrasting with other managers who obstructed the investigation or were invasive. Despite the investigation not finding any issues related to the respiratory therapy department, Williamson was terminated following its completion.

On July 13, 2011, the jury delivered a verdict in Williamson v. Ciena Healthcare Management and G&K Management d/b/a Omini Continuing Care, finding that Elizabeth Williamson was terminated in retaliation for her involvement in the investigation. The jury awarded Williamson $705,000, which includes $126,000 in back pay and benefits, $329,000 in future lost pay and benefits, and $250,000 for mental and emotional distress, humiliation, anxiety, and depression.

Key lessons learned from the case:
  • Whistleblowers are protected under the law from retaliation when they participate in investigations of serious violations.
  • Employers must maintain an environment where employees can report misconduct without the fear of retaliation, as failing to do so can result in significant financial and legal consequences.
  • Employers are encouraged to provide transparency and integrity among staff, especially in sensitive sectors like health care, which is crucial for upholding regulatory standards and ensuring the safety and well-being of those served.

2. Medical Sales Representative Wins $880,000 in Wrongful Termination Lawsuit

In the case of Morrison v. B. Braun Medical, Lynn Morison, who worked as a “work-from-home” sales representative of B. Braun Medical, was employed by the company for nine years. During her tenure, she was repeatedly asked to promote off-label uses of the company’s products and to violate Michigan’s anti-kickback laws. She consistently informed her supervisor that she wouldn’t break the law.

In 2007, Morrison was terminated from her position. The company claimed the termination was due to her failure to meet sales targets. However, Morrison alleged that her dismissal was in retaliation for her refusal to engage in illegal activities and subsequently filed a wrongful termination lawsuit for violation of public policy.

Morrison successfully proved her case, and the jury awarded her $880,000. The company’s attempts to appeal the decisions were unsuccessful, and the original was upheld.

Key lessons learned from this case:
  • Employees have the right to refuse illegal activities, and retaliation for such refusal can lead to substantial legal consequences for employers.
  • Wrongful termination claims can be substantiated by demonstrating that the dismissal was a result of the employee’s adherence to legal and ethical standards.
  • Employers must foster a legal and ethical work environment, providing training and clear policies to prevent unlawful practices and protect employees who adhere to legal and ethical guidelines.

Learn more about Michigan 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.