Oregon Termination Laws

Termination laws in Oregon create a fair balance between employer rights and employee protections. These laws ensure employees have safeguards against wrongful termination while also allowing employers the ability to make necessary business decisions within legal limits. This guide outlines key aspects of Oregon’s termination laws, providing insights into the legal standards that govern ending an employment relationship.

This Guide Covers

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

Legal Considerations for Termination in Oregon

When firing an employee, Oregon employers must comply with several legal requirements to stay within the state and federal guidelines. Here are the main legal considerations:

  • Anti-Discrimination Laws: Oregon law prohibits employers from terminating employees based on race, color, national origin, religion, sex, gender identity, sexual orientation, age, disability, military status, or marital status. These protections extend to federal laws like Title VII of the Civil Rights Act and the Americans with Disabilities Act (ADA). Employers must ensure termination is lawful and non-discriminatory.
  • Retaliation Protections: Oregon employers cannot terminate employees for exercising their rights, such as reporting unsafe conditions, discrimination, or other illegal activities. State and federal laws protect workers from retaliatory terminations, including Oregon’s Whistleblower Act and the Occupational Safety and Health Act (OSHA).
  • Notice Requirements: While Oregon law does not mandate a written termination notice, providing one is considered a best practice. For mass layoffs, employers must follow federal requirements, which demand a 60-day advance notice for certain terminations. Employers must ensure compliance with notice obligations under contractual agreements or federal law to avoid legal complications.
  • Final Pay Requirements: Oregon law requires employers to pay final wages promptly upon termination. Discharged employees must receive their final paycheck by the end of the next business day. Failure to meet this deadline may result in penalty wages for employers. Employers who resign are also entitled to timely payment, depending on whether they gave 48 hours of notice or less.
  • Contractual Agreements: If an employment contract specifies conditions for termination, employers must honor these conditions. Termination must follow the contract’s terms, including severance pay if outlined. Employers who disregard contractual provisions risk breaching contract claims.
  • Documentation and Recordkeeping: Employers should keep thorough records of employee performance issues, disciplinary actions, and the termination process. Oregon law requires employers to maintain payroll and timekeeping records that support lawful termination decisions. Proper documentation is super important for defending against wrongful termination claims.

At-Will Employment in Oregon

What is At-Will Employment?

At-will employment in Oregon allows the employer or the employee to end the employment relationship at any time, without prior notice, and for any reason. This means that an employer can discharge an employee for any reason or no reason, as long as the reason isn’t illegal, such as discrimination or retaliation. Employees, similarly, have the freedom to leave their job at any time without needing to provide a reason.

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

Aside from the discriminatory and retaliatory protections discussed earlier, there are additional legal exceptions that override the at-will employment doctrine in Oregon:

  • Violations of Public Policy: Oregon prohibits firing employees for reasons that go against societal norms or state and federal laws. This includes dismissing someone for fulfilling jury duty, voting, refusing to engage in illegal acts, or whistleblowing. If employees report safety violations or other illegal conduct, firing them for these actions would violate public policy.
  • Implied Contract: Employers may create implied contracts through promises, handbooks, or company policies guaranteeing specific employment conditions. Such implied contracts prevent employers from terminating employees at-will if they have promised job security or other terms that conflict with at-will termination.

Employment Under Contract in Oregon

Employment in Oregon isn’t always at-will. Employment under a contract offers specific terms and conditions that define how and when the employment can end, providing more stability. Contracts can be written or oral, though written agreements are generally preferred due to their clarity and enforceability in court.

Contracts can also be express or implied. Express contracts are typically written and signed by both parties, while implied contracts arise from actions or promises made, such as those outlined in an employee handbook. When employers breach a contract, employees may take legal action to recover damages, including reinstatement or back pay. Union employees often work under collective bargaining agreements, which offer additional protections and require specific grievance procedures before termination.

Lawful Termination in Oregon

Legal Grounds for Termination in Oregon

Oregon employers must exercise caution when deciding to dismiss an employee. They need to ensure that their decision aligns with legal guidelines. Lawful reasons for termination in Oregon include:

  • Performance or Behavior Issues: Employers can terminate an employee who consistently fails to meet job performance standards, including poor work quality, missed deadlines, or failure to meet established goals. Clear communication of performance expectations and proper documentation of issues are important steps before proceeding with termination.
  • Violation of Company Policies: Employees in Oregon can be terminated for not adhering to company policies. This may involve failure to comply with established rules regarding workplace conduct, safety procedures, or drug and alcohol use, especially if there are clear written policies that the employee has knowingly violated.
  • Business Necessity: Oregon employers may also terminate employees for reasons related to business needs, such as financial difficulties, restructuring, or downsizing. This type of termination, also known as a layoff, is not related to the employee’s performance but rather the employer’s operational requirements.

Read our complete guide to firing employees in Oregon for further information.

How Do I File a Wrongful Termination Claim in Oregon?

To file a wrongful termination claim in Oregon, an employee should determine if the termination involved discrimination, retaliation, or a contract breach. Gathering relevant documents such as employment contracts, performance reviews, and communication records will support the claim.

Employees can submit a complaint to the Oregon Bureau of Labor and Industries (BOLI) for state law violations or the Equal Employment Opportunity Commission (EEOC) for federal claims. The EEOC requires complaints to be filed within 180 days of the termination date or 300 days if a state or local agency enforces an anti-discrimination law. 

Legal Protections During Termination in Oregon

Employees in Oregon have legal protections during the termination process, provided by both state and federal laws. These protections help ensure fair treatment and safeguard against wrongful dismissal. The following laws protect employees during termination:

  • Discrimination Protections: The statute ORS 659A.030 prohibits discrimination against employees based on race, color, religion, sex, sexual orientation, gender identity, national origin, marital status, age, and disability. Employers cannot terminate employees for exercising their rights under this statute.
  • Whistleblower Protections: The state law ORS 659A.199 protects employees from retaliation for reporting violations of state or federal laws or unsafe working conditions. Employees who report illegal activities or unsafe conditions are protected from termination.
  • Oregon Family Leave Act: The Oregon Family Leave Act (OFLA) is a state law that allows eligible employees to take up to 12 weeks of unpaid leave for family-related reasons. Employers cannot terminate employees for taking OFLA-protected leave.
  • Final Paycheck Protections: Under Oregon’s Final Paycheck Law, employers must issue a final paycheck promptly. If an employee is terminated, the employer must provide the final paycheck by the end of the first business day. If the employee resigns with notice, they should receive their paycheck on the last day of work or, if without notice, within five business days or by the next payday.
  • Title VII of the Civil Rights Act of 1964: A primary federal law protecting employees from discrimination is Title VII of the Civil Rights Act of 1964. This act prohibits employers from terminating employees based on race, color, religion, sex, or national origin. Employers must comply with these anti-discrimination rules to avoid unlawful termination practices.
  • Age Discrimination in Employment Act: The federal Age Discrimination in Employment Act (ADEA) protects employees aged 40 or older from being terminated due to their age. Employers must not consider age as a factor in making employment decisions.
  • Americans with Disabilities Act: Another federal law, the Americans with Disabilities Act (ADA), prevents employers from terminating employees who have disabilities if they can perform essential job functions, with or without reasonable accommodations. Employers must provide reasonable accommodations and avoid discriminatory termination.
  • Family and Medical Leave Act: The federal version of OFLA is the Family and Medical Leave Act (FMLA). This law provides eligible employees with up to 12 weeks of unpaid, job-protected leave. Employers cannot terminate employees for exercising their rights under the FMLA.
  • Worker Adjustment and Retraining Notification Act: The federal Worker Adjustment and Retraining Notification (WARN) Act requires employers with more than 100 employees to give at least 60 days’ notice before mass layoffs or plant closures. This law aims to protect employees from sudden job loss without proper notice.

Terminated Employee Benefits in Oregon

Terminated employees in Oregon have access to several benefits depending on their employment status and the specifics of their termination:

  • Final Paycheck: Employers must pay an employee who has been terminated by the end of the next business day. If an employee quits with at least 48 hours notice, they receive their final paycheck on their last working day. If they quit without notice, payment must be made within five business days or on the next regular payday, whichever comes first.
  • Unemployment Insurance: The Oregon Employment Department provides unemployment benefits to employees who lose their job through no fault of their own. These benefits offer temporary financial assistance based on past earnings while requiring recipients to actively look for work and meet eligibility criteria.
  • Health Coverage Continuation: Terminated employees can temporarily continue their health insurance coverage under the federal COBRA law. Employees must pay the full premium along with a small administrative fee. Alternatively, they may opt for coverage through the Health Insurance Marketplace, which may offer more affordable options.
  • Severance Pay: Oregon law does not require employers to provide severance pay. However, if the employment contract or company policy offers severance, the employer must honor it. When employees qualify for severance, employers must pay it at the time of termination.

Layoffs in Oregon

Layoffs in Oregon happen when companies need to reduce their workforce, typically due to financial difficulties, restructuring, or business closures. Employers must comply with both federal and state laws during these layoffs. Under the federal Worker Adjustment and Retraining Notification (WARN) Act, companies with 100 or more employees must provide a 60-day notice before any mass layoff or plant closing that affects at least 50 workers.

Oregon also has support programs like the Rapid Response, which help both employers and workers during layoffs. These programs offer services to assist affected employees in finding new jobs, accessing retraining opportunities, or getting other necessary support to ease the transition.

Resignations in Oregon

Resignations occur when an employee chooses to voluntarily leave their employment. Common reasons include career advancement, relocation, personal motivations, or dissatisfaction with the current role. There is no legal requirement for employees to provide advance notice before resigning, though it is often recommended as a professional courtesy and may be required by company policy or contract.

Voluntary Resignations

Voluntary resignations happen when employees independently decide to end their employment. In Oregon, these resignations can be legally binding even without formal written notice, as long as the employee’s intent to leave is clearly communicated through words or actions. If an employee resigns with at least 48 hours’ notice, their final paycheck is due on their last working day. If they do not provide notice, their final paycheck must be paid within five business days or on the next regular payday.

Involuntary Resignations

Involuntary resignations, also known as constructive discharge, happen when an employee is essentially forced to resign due to unbearable working conditions deliberately created by the employer. If a resignation results from conditions that would reasonably compel an employee to quit, Oregon courts may treat it as wrongful termination, and the employer could face legal liability.

Legal Cases Related to Wrongful Termination in Oregon

1. OnSite Solutions Settled Wrongful Termination Lawsuit for $50,000

The case of EEOC v. OnSite Solutions, LLC highlights wrongful termination involving allegations of racial discrimination.

The U.S. Equal Employment Opportunity Commission (EEOC) sued OnSite Solutions for wrongful termination, citing violations of Title VII of the Civil Rights Act of 1964. The area manager directed Douglas Williams, an African-American supervisor, to replace Black employees with white and Hispanic workers, using the phrase “sprinkle a little salt” to justify this. Following these instructions, Williams was demoted, and three Black employees were terminated.

The case concluded with a $50,000 settlement, requiring OnSite Solutions to revise equal employment opportunity policies, conduct anti-discrimination training for managers, and distribute anti-discrimination notices.

Key lessons learned:

  • Employers must not base termination decisions on race; this violates federal law.
  • Strong anti-discrimination policies and training are critical in preventing workplace violations.

2. Kaizen Restaurants Settled Involuntary Resignation Lawsuit for $150,000

The case of EEOC v. Kaizen Restaurants, Inc. involves an involuntary resignation triggered by severe sexual harassment.

The U.S. Equal Employment Opportunity Commission (EEOC) sued Kaizen Restaurants, alleging that a teenage crew member at a Burger King in Sandy, Oregon, faced relentless sexual harassment from her older supervisor. Unwanted advances, explicit comments, and intimidation created an unsafe work environment, ultimately forcing the young employee to quit for her safety. The case was settled for $150,000, with Kaizen agreeing to implement a comprehensive non-discrimination policy, conduct anti-harassment training, and submit complaint reports.

Key lessons learned: 

  • Failing to address harassment not only violates the law but also contributes to an unsafe work environment.
  • Employers should regularly review workplace conduct policies to maintain compliance with civil rights laws.
  • Ensuring prompt action on complaints helps build trust among employees.

Explore our comprehensive guide to Oregon Labor Laws to learn more.

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.