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Laws Relevant To Termination

There are two statutory schemes relevant to termination of employment.  First are the statutes—federal, state, and local—which prohibit discrimination in employment or otherwise restrict an employer’s right to discharge an employee.  Second are the statutes that address benefits available to employees who lose their jobs. 

Statutes Prohibiting Discrimination in Employment

  • Title VII of the Civil Rights Act of 1964 prohibits discrimination in employment on the basis of race, color, sex (including pregnancy), religion, and national origin.  Many states and some local  governments have similar laws prohibiting discrimination based on these classifications. State and local statutes may also prohibit discrimination based upon such immutable characteristics as sexual orientation.  State and local statutes may affect employers who are too small to be covered by federal law.
  • The Americans with Disabilities Act (ADA) prohibits discrimination against persons who are disabled, so long as the person is qualified to perform the job at issue.    Employers are obligated to provide “reasonable accommodation” to disabled employees so long as the accommodation does not impose “undue hardship” on the employer.
  • The Age Discrimination in Employment Act (ADEA) prohibits discrimination against individuals age 40 and older on the basis of their age.  The Older Workers Benefit Protection Act (OWBPA), which is part of the ADEA, also addresses pension benefits for older employees and prescribes a strict mechanism through which employees may waive ADEA claims.  Many states have similar statutes.  At least one state protects all employees against age discrimination, including younger employees.
  • The Uniformed Services Employment and Reemployment Rights Act (USERRA) prohibits discrimination against a person on the basis of past military service, current military obligations, or intent to serve.  Many states also provide job-protected military leave. 
  • The Genetic Information Nondiscrimination Act (GINA) prohibits discrimination in employment based on genetic information.

Discrimination Against Employees Exercising a Statutory Right

It is generally unlawful for an employer to discriminate against an employee who exercises a statutory right.   For example, an employer may not discriminate against an employee who exercises his or her right to take leave for the employee’s own illness or that of a family member, or who takes leave for childbirth or adoption under the Family and Medical Leave Act of 1993 (FMLA).  Similarly, many states prohibit discrimination against an employee who files a workers’ compensation claim.  Virtually all of the federal statutes prohibiting discrimination in employment prohibit retaliation against an employee who exercises his or her right to file a discrimination charge.

Portability of Health Benefits

COBRA is the federal statute that requires employers with 20 or more employees to allow employees whose employment is terminated to continue their group health care coverage, so long as the plan itself continues.  Many states have “mini-COBRA” statutes that provide continuation coverage for employers of fewer than 20 employees.  However, the prerequisites for coverage and the length of coverage vary significantly from state to state.  

HIPAA (Health Insurance Portability and Accountability Act) requires group health plans (including employer-sponsored plans) to issue "certificates of creditable coverage” to employees who leave their employ.  If the employee has been covered by the employer’s plan and the gap between leaving the employer’s plan and getting coverage under another group plan is sufficiently short, the employee need not be concerned with pre-existing conditions.  The certificate provides the evidence of prior group coverage.  A certificate must be issued automatically and free of charge when an individual:

  • Loses coverage under a plan;
  • Becomes entitled to elect COBRA continuation coverage;
  • Loses COBRA continuation coverage; or
  • Upon request while the individual has health coverage, or within 24 months after coverage ends.

For more on creditable coverage and HIPAA in general, please visit the HIPAA Section.

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