The right to receive compensation for services is the central component to any employment relationship. Accordingly, an employee who has properly performed services as required by an employment contract has a vested right to the compensation he or she has earned. In the event a dispute arises, a claim for compensation will fail only where the facts presented to the court establish a material and substantial failure to perform under the contract. Absent such circumstances, an employee can generally recover any amount expressly agreed upon for completed services, or if no such agreement exists, an employee may recover the reasonable value of the services rendered.
Two distinct forms of employment create an array of legal obligations of which an employer must be aware. First, an employment agreement can create a relationship for a definite or ascertainable time period. These relationships are commonly referred to as "term" employment relationships. Absent an express statement identifying a definite period of time for employment, or some other job security provision contained in the agreement, the employment relationship will be considered inherently indefinite and thus will be presumed at will.
Next, the doctrine of at-will employment provides that any such employment relationship is terminable at any time by either the employer or the employee for any reason or no reason at all. The doctrine of at-will employment, in its purest form, stands for the uncontested right of an employer to dismiss an employee for any reason whatsoever. It is generally irrelevant whether an employer's justification is legitimate because at-will employment serves to protect the dismissal decision regardless of motivation.
As an employer, it is imperative to understand the principles of at-will employment are by no means absolute. For example, forty-three states, including Texas, recognize public policy as an exception to the at-will doctrine. Under the public policy exception, an employer may not fire an employee if it would violate the state's public policy or a state or federal statute. Similarly, most states specifically prohibit an employer from terminating an employee for filing a workers' compensation claim after being injured on the job, or for refusing to break the law at the request of the employer.
LEGAL BASIS FOR WRONGFUL TERMINATION CLAIMS
Many wrongful termination suits brought under statutory causes of action use the federal anti-discrimination statutes which prohibit firing or refusing to hire an employee because of race, color, religion, sex, national origin, age, or handicap status. Examples of such statutes include:
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The Equal Pay Act of 1963 (relating to discrimination on the basis of gender in payment of wages); |
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Title VII of the Civil Rights Act of 1964 (relating to discrimination on the basis of race, color, religion, sex, or national origin); |
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The Age Discrimination in Employment Act of 1967 (relating to certain discrimination on the basis of age); |
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The Rehabilitation Act of 1973 (relating to certain discrimination on the basis of handicap status); and |
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The Americans with Disabilities Act of 1990 (relating to certain discrimination on the basis of handicap status). |
The employment relationship is a highly regulated and hot topic in employment law. Utilizing the many resources available to employers to manage this sometimes arduous but always necessary area of human resources management will assist employers in defending and, most importantly, preventing litigation. To speak to an employment attorney about the proper procedures for employee terminations or preparing a severance agreement for one or more employees, please contact us here or call 713.650.9700.