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Firing employees is never easy

As an employer, deciding whether or not to terminate an employee can be agonizing. The employee likely has a family to support; or the terminated employee may speak badly about you to your friends, neighbors or other employees. However, the most important concern you should have, besides the success of your farm business, is to make sure the employee is legally terminated, as the employer-employee relationship is filled with legal pitfalls.

Most farm employees are “at-will employees.” An at-will employee is generally defined as one whose employment can be terminated by the employee or the employer at any time for any or no reason. However, it is really not that simple. First, an employee cannot be terminated based on, among other claims, his or her race, marital status, color, religion, ancestry, national origin, gender, disability, age, sexual orientation, arrest and conviction record, medical condition (including pregnancy) or military status. Secondly, an employee cannot be terminated for serving on a jury or testifying in court if subpoenaed. Finally, if an employee is injured on the job, it can be illegal to no longer have a job open for that employee when the employee is later ready to return to work.

Not all employees are at-will employees. If an employee is part of a union or is employed under the terms of a written or oral contract, then he or she can only be terminated in accordance with the terms of the collective bargaining agreement or contract. These types of employees are typically referred to as “contract employees.”

Another category of employees are “quasi-contractual employees.” The Wisconsin Supreme Court has decided that an at-will employee may become a quasi-contractual employee. For example, an employer might have a policy, whether in a handbook or not, that if an employee does something wrong, first the employee will be given a verbal warning. On a second violation, the employee will be given a written warning. Upon a third violation, the employee will be suspended without pay. Finally on the fourth violation, the employee can be terminated.

If an employee is terminated without first going through the steps outlined above, courts have stated that he or she was a quasi-contractual employee and thus was improperly terminated.

Unemployment compensation

Employers, when deciding whether to terminate an employee, often consider whether the employee will file a claim for unemployment. If an employee is fired for misconduct, then the employer can avoid having its unemployment insurance fund depleted if the employer can prove the employee engaged in misconduct warranting termination. The verbal warning, written warning and suspension procedure, if implemented, followed and documented, can enable an employer to defeat an unemployment compensation claim. Also, written policies should be established to allow for immediate termination to enable an employer to terminate an otherwise model employee for embezzlement, for example.

Even if you do not have written policies, you should treat employees similarly because your historical course of conduct can establish policies that must be followed.

At all times, employers must be careful to avoid an illegal termination case. If it is found an employee was illegally terminated, an employer is often ordered to pay back wages, court costs, fines, and other compensatory and punitive damages besides its own attorney fees.

Whether or not a terminated employee will be eligible for unemployment compensation should be a secondary concern. At least from a moral standpoint, if an employee is eligible for unemployment, he or she will be able to support his or her family for a time.

In any event, employers should consult an attorney prior to terminating an employee and should have their employee handbooks and policies periodically reviewed.

Halbach is a partner in Twohig, Rietbrock, Schneider & Halbach S.C. in Chilton. The firm specializes in ag law.

This article published in the July, 2010 edition of WISCONSIN AGRICULTURIST.

All rights reserved. Copyright Farm Progress Cos. 2010.