Tennessee Termination Laws

In Tennessee, understanding the legal framework surrounding termination is crucial for ensuring fair practices and avoiding potential disputes. This article discusses the termination laws in Tennessee, offering a comprehensive overview of employee rights and responsibilities.

This Guide Covers

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

Legal Considerations for Termination in Tennessee

When considering termination in Tennessee, employers should be aware of the following legal considerations to ensure compliance with state and federal laws:

  • “At-Will” Employment: Employers and employees have the right to terminate the employment relationship at any time for any reason, as long as there is no employment contract specifying otherwise.
  • Anti-Discrimination Laws: Employers must comply with federal and state anti-discrimination laws, which prohibit termination based on race, color, religion, sex, national origin, age, or disability.
  • Retaliation Protections: It is illegal to terminate an employee in retaliation for engaging in protected activities such as filing a workers’ compensation claim, reporting safety violations, or participating in an investigation.
  • Employment Contracts: If there is an employment contract, either written or implied, that specifies terms for termination, both parties must adhere to the stipulated terms. Review any termination clauses in employment agreements to ensure compliance with any agreed-upon procedures or notice periods. Violating contract terms could result in breach of contract claims.
  • Notice Requirements: Generally, Tennessee does not require specific notice requirements for “at-will” terminations, but are mandated for terminations due to mass layoffs or plant closures.
  • Recordkeeping Requirements: Proper documentation of performance issues and termination reasons is crucial to defend against potential wrongful termination claims. Employers should keep detailed records of performance reviews, disciplinary actions, and any relevant correspondence.

“At-Will” Employment in Tennessee

What is “At-Will” Employment?

“At-will” employment is a common employment arrangement that allows either the employer or employee to terminate the employment relationship at any time, for any reason, or for no reason at all, as long as the reason is not illegal. This employment framework is followed in Tennessee.

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

In Tennessee, while “at-will” employment provides flexibility for terminating employment, there are statutory exceptions that protect employees from being disciplined or discharged under certain circumstances. Employees cannot be terminated “at-will” for the following reasons:

  • Discrimination: Employees cannot be terminated based on race, color, religion, sex, national origin, age, or disability.
  • Retaliation: Employers cannot terminate an employee in retaliation for engaging in protected activities, such as filing a workers’ compensation claim, reporting illegal activities (whistleblowing), or participating in investigations or legal proceedings related to discrimination or safety violations.
  • Contractual Obligations: If there is an employment contract, either written or implied, that specifies terms for termination, the employer must adhere to those terms. Terminating an employee in violation of these contract terms may result in a breach of contract claim.
  • Military Service: Under TN Code Section 8 Chapter 33, employees cannot be terminated for being called to military service. These statutes ensure job protection for those who serve in the military.
  • Voting in Elections: According to TN Code § 2-1-106, employees are protected from termination for taking time off to vote in elections, ensuring they can exercise their right to vote without fear of losing their jobs.
  • Exercising the Right of Association: Under TN Code § 50-1-201, employees cannot be terminated for exercising their right to join or participate in labor unions or other associations.
  • Wage Garnishment: According to TN Code § 26-2-101 through § 26-2-410, employers cannot discharge employees for having their wages garnished for debt repayment. This ensures that wage garnishment does not negatively impact job security.
  • Filing a Workers’ Compensation Claim: Under TN Code § 50-6-101, employees are protected from retaliation or termination for filing a workers’ compensation claim after a workplace injury.
  • Jury Duty: According to TN Code § 22-4-108, employees cannot be terminated for serving on a jury. In addition, employers are required to pay employees their regular wages during jury service, less any compensation received from the court.

Employment Under Contract in Tennessee

In Tennessee, employment under contract refers to a situation where the terms and conditions of employment are outlined in a formal agreement between the employer and employee. This type of employment can differ significantly from “at-will” employment, providing both parties with specific rights and obligations.

In cases of breach of contract, such as an employer terminating an employee without following the contract’s terms, remedies may include financial compensation, specific performance, or reinstatement.

Lawful Termination in Connecticut

Legal Grounds for Termination in Connecticut

Employment in Tennessee is generally considered “at-will.” however, there are legal constraints on this principle. Legal grounds for termination include:

  • Performance issues: Terminating an employee for poor job performance or failure to meet job expectations is legal, provided it is done in a non-discriminatory manner.
  • Violation of company policy: If an employee breaches company policies or rules, termination can be justified if the policies are clearly communicated and consistently enforced.
  • Business needs: Employers can terminate employees due to downsizing, restructuring, or other business needs that require a reduction in staff.
  • Behavioral issues: Issues such as misconduct, insubordination, or other behavior-related problems that affect job performance can be grounds for termination.
  • Attendance problems: Frequent absences or tardiness, especially if not covered under a protected leave, can be a valid reason for termination.

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

How Do I File a Wrongful Termination Claim in Tennessee?

Before filing a wrongful termination case in Tennessee, employees are encouraged to review their employment contract and company policies. There might be specific terms for termination stipulated in the company’s employee handbook and policies or written employment contracts. Employees are advised to collect any relevant data that supports their claim, such as employment records, witnesses, and any proof of discriminatory or retaliatory actions by their employer.

Employees can file wrongful termination claims with the Equal Employment Opportunity Commission (EEOC) and the Tennessee Human Rights Commission (THRC).

Legal Protections During Termination in Tennessee

In Tennessee, employees are protected by both state and federal laws during termination to prevent unfair practices and ensure their rights are upheld. Legal protections include:

  • Title VII of the Civil Rights Act of 1964: Title VII of the Civil Rights Act of 1964 prohibits discrimination based on race, color, religion, sex, or national origin. This means employers must ensure their termination decisions are not influenced by these factors and must provide a fair and unbiased process.
  • Americans with Disabilities Act (ADA): The Americans with Disabilities Act (ADA) protects employees with disabilities from discrimination and requires reasonable accommodations. Employers are obligated to provide necessary adjustments to work environments or duties to support employees with disabilities. Termination based on a disability or failure to accommodate a disability may be unlawful.
  • Age Discrimination in Employment Act (ADEA): The Age Discrimination in Employment Act (ADEA) protects employees aged 40 and older from discrimination based on age. Employers cannot terminate employees because of their age.
  • Family and Medical Leave Act (FMLA): The Family and Medical Leave Act (FMLA) provides eligible employees with up to 12 weeks of unpaid leave for certain medical or family reasons. Employers cannot terminate an employee for taking FMLA leave and must ensure that employees taking FMLA leave can return to their previous position or an equivalent role.
  • Occupational Safety and Health Act (OSHA): The Occupational Safety and Health Act (OSHA) protects employees from termination for reporting unsafe work conditions or exercising rights under OSHA. Employees have the right to a safe work environment and cannot be punished for raising concerns about health and safety violations.
  • Tennessee Human Rights Act: The Tennessee Code Annotated (T.C.A.) § 4-21-101 et seq. mirrors federal anti-discrimination laws, prohibiting discrimination in employment based on race, color, national origin, sex, disability, and age. Employers in Tennessee must adhere to these anti-discrimination requirements in all employment decisions, including termination.
  • Tennessee’s Public Whistleblower Protection: The T.C.A. § 50-1-304 protects employees from retaliation for reporting violations of state laws or regulations. Employees who expose illegal activities or unsafe practices in Tennessee are safeguarded against retaliatory actions by their employers.
  • Worker’s Compensation Retaliation: The T.C.A. § 50-6-114 prohibits retaliation against employees who file a workers’ compensation claim. Employees who file claims for work-related injuries are protected from adverse employment actions like termination.
  • Pregnancy Discrimination: Under Tennessee’s Human Rights Act (T.C.A. § 4-21-408), employers must treat pregnant employees the same as other employees with similar abilities or limitations. This ensures that pregnant employees receive fair treatment and are not unfairly terminated due to their pregnancy.

Terminated Employee Benefits in Tennessee

Terminated employees in Tennessee are entitled to certain benefits, including:

  • Final Paycheck: Under Tenn. Code. Ann. § 50-2-103 (g), terminated employees receive their final paycheck by the next regular payday following the termination. If the employee resigns, they must be paid their final wages within 21 days of the resignation.
  • Health Insurance Continuation: Employees who lose their jobs may be eligible to continue their health insurance coverage under the Consolidated Omnibus Budget Reconciliation Act (COBRA). COBRA allows for continued coverage for up to 18 months. In addition, the state has a continuation law, the Tennessee Mini-COBRA extends health insurance continuation for smaller employers (under 20 employees) for up to 6 months.
  • Unemployment Benefits: Terminated employees may apply for unemployment benefits through the Tennessee Department of Labor and Workforce Development. Eligibility depends on the reason for termination, the employee’s work history, and whether they meet other requirements.

Layoffs in Tennessee

The requirements for layoffs and plant closings in Tennessee are governed by both federal and state laws, with some noticeable differences:

  • Federal Worker Adjustment and Retraining Notification (WARN) Act: The federal Worker Adjustment and Retraining Notification (WARN) Act applies to employers with 100 or more full-time employees and requires them to provide at least 60 days’ notice before a mass layoff or plant closing.
  • Tennessee Worker Adjustment and Retraining Notification (WARN) Act: According to the WARN Act Technical Assistance Guide, the Tennessee Plant Closing and Reduction in Operations Act applies to employers with at least 50 but fewer than 100 employees. It requires that notice be given to employees in cases of significant layoffs or plant closings, and the notice requirements under this state law extend to all categories of employees, including hourly and salaried workers, as well as managerial and supervisory employees.

Resignations in Tennessee

In Tennessee, resignations occur when an employee decides to leave their job, either voluntarily or involuntarily.

Voluntary Resignations

Voluntary resignations occur when an employee decides to leave the job of their own free will. This decision can be due to personal reasons, a new job opportunity, or other factors.

Under TN Code § 48-18-404, corporate officers and employees must be made in writing, although there is no mandated notice period. The resignation is effective at the time specified in the resignation letter. While not specified, it is generally considered good practice for employees to give at least two weeks’ notice to their employer.

Upon resignation, the employer is required to pay the employee for all earned wages, including unused vacation time if stipulated in the company’s policy or employment agreement.

Involuntary Resignations

An involuntary resignation, often referred to as a forced termination or constructive discharge, occurs when an employee is pressured to resign by the employer by imposing intolerable working conditions. This includes harassment, discrimination, and reduction in pay or benefits. If an employee resigns due to constructive discharge, they may have grounds for wrongful termination. However, the employee must prove that the conditions were severe enough to force a reasonable person to resign.

Legal Cases Related to Wrongful Termination in Tennessee

1. Automotive Parts Company to Pay $750,000 to Settle Discrimination Lawsuit

According to the case of EEOC v. Dura Automotive Systems, Dura Automotive Systems Inc., is an automotive parts company, that was alleged for violating the Americans with Disabilities Act (ADA). The company tested all of its Lawrenceburg, Tennessee plant employees for the presence of 12 drugs, seven of which are legally prescribed medications.

According to the EEOC, this testing violated the ADA as Dura required employees who tested for legally prescribed medications to disclose their medical conditions, suspended the employees until they stopped taking the medication, and terminated those who were unable to perform their duties without taking their prescription. The company has also revealed the identities of those who tested positive to the entire workforce, violating confidentiality requirements.

The lawsuit accused Dura Automotive of making illegal medical inquiries, conducting impermissible medical exams, and violating confidentiality requirements. The lawsuit was resolved through a consent decree where the company must pay $750,000 in damages.

Key Lessons Learned from the Case:
  • Employers must ensure that medical inquiries and drug testing practices comply with the ADA requirements, focusing on job relevance and business necessity.
  • Employers are encouraged to implement comprehensive training and clear policies to prevent ADA violations and protect employees’ rights.

2. Consumer Goods Company Pays $2.6 Million in Retaliation Lawsuit

According to the case of Dan Long v. Procter & Gamble, Dan Long, a long-time employee of a consumer goods company, Procter and Goods (P&G), had filed charges of racial discrimination against the company alleging that the company was discriminating against African-American technicians. Long was soon fired in retaliation for filing the discrimination charges. Long filed a complaint with the Equal Employment Opportunity Commission (EEOC) and sued the company for violating Title VII of the Civil Rights Act of 1964, alleging he was wrongfully terminated in retaliation for opposing race discrimination. The lawsuit contended that P&G had a practice of racial discrimination, but Long’s attorney clarified that the jury was only asked to decide on the retaliation claim.

P&G countered that Long was terminated for falsifying quality control reports and his employment application. However, after a five-hour deliberation, the jury found in favor of Long, awarding him $2 million in punitive damages, $500,000 for emotional pain and mental anguish, $29,000 for lost medical benefits, and approximately $81,000 for lost wages.

Key Lessons Learned from the Case:
  • Employees are protected from retaliation under Civil Rights when they file complaints of discrimination, and such protection can result in substantial damages if retaliatory termination occurs.
  • The case highlighted the significance of evidence in demonstrating that the termination was retaliatory and not due to alleged policy violations.

Learn more about Tennessee 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.