| Introduced By: Representative McGowan |
| Date Introduced: January 30, 1997 |
| Referred To: House Committee on Labor |
It is enacted by the General Assembly as follows
SECTION 1. Title 28 of the General Laws entitled "Labor and Labor Relations" is hereby amended by adding thereto the following chapter:
{ADD CHAPTER 5.2 ADD}
{ADD UNIFORM EMPLOYMENT TERMINATION ADD}
{ADD 28-5.2-1. Short title. -- ADD} {ADD This chapter shall be known and may be cited as "The Rhode Island Uniform Employment-Termination Act of 1995". ADD}
{ADD 28-5.2-2. Definitions. -- ADD} {ADD When used in this chapter:
(1) Department" means the "department of labor".
(2) "Employee" means an individual who works for hire, including an individual employed in a supervisory, managerial, or confidential position, but not an independent contractor.
(3) "Employer" means a person, excluding this state, a political subdivision, a municipal corporation, or any other governmental subdivision, agency, or instrumentality, that has employed five (5) or more employees for each working day in each of twenty (20) or more calendar weeks in the two (2) year period next preceding a termination or an employer's filing of a complaint pursuant to section 28-5.2-6(c), excluding a parent, spouse, child, or other member of the employer's immediate family or of the immediate family of an individual having a controlling interest in the employer.
(4) "Fringe benefit" means vacation leave, sick leave, medical insurance plan, disability insurance plan, life insurance plan, pension benefit plan, or other benefit of economic value, to the extent the leave, plan, or benefit is paid for by the employer.
(5) "Good cause" means (i) a reasonable basis related to an individual employee for termination of the employee's employment in view of relevant factors and circumstances, which may include the employee's duties, responsibilities, conduct on the job or otherwise, job performance, and employment record, or (ii) the exercise of business judgment in good faith by the employer, including setting its economic or institutional goals and determining methods to achieve those goals, organizing or reorganizing operations, discontinuing, consolidating, or divesting operations or positions or parts of operations or positions, determining the size of its work force and the nature of the positions filled by its work force, and determining and changing standards of performance for positions.
(6) "Good faith" means honesty in fact.
(7) "Pay", as a noun, means hourly wages or periodic salary, including tips, regularly paid and nondiscretionary commissions and bonuses, and regularly paid overtime, but not fringe benefits.
(8) "Person" means an individual, corporation, business trust, estate, trust, partnership, association, joint venture, or any other legal or commercial entity excluding government or a governmental subdivision, agency, or instrumentality.
(9) "Termination" means:
(i) a dismissal, including that resulting from the elimination of a position, of an employee by an employer;
(ii) a layoff or suspension of an employee by an employer for more than two (2) consecutive months; or
(iii) a quitting of employment or a retirement by an employee induced by an act or omission of the employer, after notice to the employer of the act or omission without appropriate relief by the employer, so intolerable that under the circumstances a reasonable individual would quit or retire. ADD}
{ADD 28-5.2-3. Scope and application of chapter. -- ADD} {ADD (a) This chapter shall apply only to a termination that occurs after the effective date of this chapter.
(b) Nothing in this chapter shall be construed to apply to a termination at the expiration of an express oral or written agreement of employment for a specified duration, which was valid, subsisting, and in effect on the effective date of this chapter.
(c) Except as provided in subsection (e) of this section, this chapter displaces and extinguishes all common-law rights and claims of a terminated employee against the employer, its officers, directors, and employees, which are based on the termination or on acts taken or statements made that are reasonably necessary to initiate or effect the termination if the employee's termination requires good cause under section 28-5.2-4(a), is subject to an agreement for severance pay under section 28-5.2-5(c), or is permitted by the expiration of an agreement for a specified duration under section 28-5.2-5(d).
(d) An employee whose termination is not subject to sections 28-5.2-4(a) or 28-5.2-5(d) and who is not a party to an agreement under section 28-5.2-5(c) retains all common-law rights and claims.
(e) Nothing in this chapter shall be construed to displace or extinguish rights or claims of a terminated employee against an employer arising under state or federal laws or administrative rules or regulations having the force of law, or local ordinances valid under state law, a collective-bargaining agreement between an employer and a labor organization, or an express oral or written agreement relating to employment which does not violate this chapter. Those rights and claims may not be asserted under this chapter, except as otherwise provided herein. The existence or adjudication of those rights or claims shall not limit the employee's rights or claims under this chapter, except as stated in section 28-5.2-8(d). ADD}
{ADD 28-5.2-4. Prohibited terminations. -- ADD} {ADD (a) Unless otherwise provided in an agreement for severance pay under section 28-5.2-5(c), or for a specified duration under section 28-5.2-5(d), an employer may not terminate the employment of an employee without good cause.
(b) Subsection (a) of this section shall apply only to an employee who has been employed by the same employer for a total period of one (1) year or more and has worked for the employer for at least five hundred twenty (520) hours during the twenty-six (26) weeks next preceding the termination. A layoff or other break in service shall not be counted in determining whether an employee's period of employment totals one (1) year, but the employee shall be considered to be employed during paid vacations and other authorized leaves. If an employee is rehired after a break in service exceeding one (1) year, not counting absences due to labor disputes or authorized leaves, the employee shall be considered to be newly hired. The twenty-six (26) week period for purposes of this subsection shall not include any week during which the employee was absent because of layoffs of one (1) year or less, paid vacations, authorized leaves, or labor disputes. ADD}
{ADD 28-5.2-5. Agreements between employer and employee. -- ADD} {ADD (a) A right of an employee under this chapter may not be waived by agreement except as provided in this section.
(b) By express written agreement, an employer and an employee may provide that the employee's failure to meet specified business-related standards of performance or the employee's commission or omission of specified business-related acts will constitute good cause for termination in proceedings under this chapter. Those standards or prohibitions shall be effective only if they have been consistently enforced and they have not been applied to a particular employee in a disparate manner without justification. If the agreement authorizes changes by the employer in the standards or prohibitions, the changes must be clearly communicated to the employee.
(c) By express written agreement, an employer and an employee may mutually waive the requirement of good cause for termination, if the employer agrees that upon the termination of the employee for any reason other than willful misconduct of the employee, the employer will provide severance pay in an amount equal to at least one (1) month's pay for each period of employment totaling one (1) year, up to a maximum total payment equal to thirty (30) months' pay at the employer's rate of pay in effect immediately before the termination. The employer shall make the payment in a lump sum or in a series of monthly installments, none of which may be less than one (1) month's pay plus interest on the principal balance. The lump-sum payment must be made or payment of the monthly installments must begin within thirty (30) days after the employee's termination. An agreement under this subsection shall constitute a waiver by the employer and the employee of the right to civil trial, including jury trial, concerning disputes over the nature of the termination and the employee's entitlement to severance pay, and shall constitute a stipulation by the parties that those disputes will be subject to the procedures and remedies provided in this chapter.
(d) The requirement of good cause for termination shall not apply to the termination of an employee at the expiration of an express oral or written agreement of employment for a specified duration related to the completion of a specified task, project, undertaking, or assignment. If the employment continues after the expiration of the agreement, section 28-5.2-4 shall apply to its termination unless the parties enter into a new express oral or written agreement under this subsection. The period of employment under an agreement described in this subsection shall count toward the minimum periods of employment required by section 28-5.2-4(b).
(e) An employer may provide substantive and procedural rights in addition to those provided by this chapter, either to one (1) or more specific employees by express oral or written agreement, or to employees generally by a written personnel policy or statement, and may provide that those rights are enforceable under the procedures of this chapter.
(f) An employing person and an employee not otherwise subject to this chapter may become subject to its provisions to the extent provided by express written agreement, in which case the employing person is deemed to be an employer.
(g) An agreement between an employer and an employee subject to this chapter shall impose a duty of good faith in its formation, performance, and enforcement.
(h) By express written agreement, an employer and an employee may settle at any time a claim arising under this chapter.
(i) By express written agreement before or after a dispute or claim arises under this chapter, an employer and an employee may agree to private arbitration or other alternative dispute-resolution procedure for resolving the dispute or claim.
(j) By express written agreement after a dispute or claim arises under this chapter, an employer and an employee may agree to judicial resolution of the dispute or claim.
(k) The substantive provisions of this chapter shall apply to an agreement authorized by subsections (i) and (j) of this section. ADD}
{ADD 28-5.2-6. Procedure and limitations. -- ADD} {ADD (a) An employee whose employment is terminated may file a complaint and demand for arbitration under this chapter with the department of labor ("The Department") not later than one hundred eighty (180) days after the effective date of the termination, the date of the breach of an agreement for severance pay under section 28-5.2-5 (c) or the date the employee learns or should have learned of the facts forming the basis of the claim, whichever is latest. The time for filing shall be suspended while the employee is pursuing the employer's internal remedies and has not been notified in writing by the employer that the internal procedures have been concluded. Resort to an employer's internal procedure is not a condition for filing a complaint under this chapter.
(b) Except when an employee quits, an employer, within ten (10) business days after a termination, shall mail or deliver to the terminated employee a written statement of the reasons for the termination and a copy of this chapter or a summary approved by the department.
(c) An employer may file a complaint and demand for arbitration under this chapter with the department; to determine whether there is good cause for the termination of a named employee. At least fifteen (15) days before filing the employer shall mail or deliver to the employee a written statement of the employer's intention to file and the factors alleged to constitute good cause for a termination.
(d) The department shall promptly mail or deliver to the respondent a copy of the complaint and demand for arbitration. Within twenty-one (21) days after receipt of a complaint, the respondent must file an answer with the department and mail a copy of the answer to the complainant. The answer of a respondent employer must include a copy of the statement of the reasons for the termination furnished the employee.
(e) When a complaint is filed, a complainant employee or employer shall pay a filing fee to the department in the amount of fifty dollars ($50.00). The department may waive or defer payment of the filing fee upon a showing of the complainant employee's indigency. ADD}
{ADD 28-5.2-7. Arbitration - Selection and powers of arbitrator - Hearings - Burden of proof. -- ADD} {ADD (a) Except as otherwise provided in this chapter the provisions of chapter 3 of title 10 ("The Arbitration Act") shall apply to proceedings under this chapter. The department shall adopt procedural rules to regulate arbitration under this chapter. The provisions of chapter 35 of title 42 applicable to the procedures of state agencies do not apply to arbitration under this chapter.
(b) The department shall adopt rules specifying the qualifications, method of selection, and appointment of arbitrators.
(c) Subject to rules adopted by the department, all forms of civil discovery shall be available in the discretion of the arbitrator, who shall ensure there is no undue delay, expense, or inconvenience. Upon request, the employer shall provide the complainant or respondent employee a complete copy of the employee's personnel file.
(d) A party may be represented in arbitration by an attorney or other person authorized under the laws of this state to represent an individual in arbitration.
(e) A complainant employee has the burden of proving that a termination was without good cause or that an employer breached an agreement for severance pay under section 28-5.2-5(c). A complainant employer has the burden of proving that there is good cause for a termination. In all arbitrations, the employer shall present its case first unless the employee alleges that a quitting or retirement was a termination within the meaning of section 28-5.2-2(9)(iii).
(f) If an employee establishes that a termination was motivated in part by impermissible grounds, the employer, to avoid liability, must establish by a preponderance of the evidence that it would have terminated the employment even in the absence of the impermissible grounds. ADD}
{ADD 28-5.2-8. Awards. -- ADD} {ADD (a) Within thirty (30) days after the close of an arbitration hearing or at a later time by agreement of the parties, the arbitrator shall mail or deliver to the parties a written award sustaining or dismissing the complaint, in whole or in part, and specifying appropriate remedies, if any.
(b) An arbitrator may make one (1) or more of the following awards for a termination in violation of this chapter:
(1) reinstatement to the position of employment the employee held when employment was terminated or, if that is impractical, to a comparable position;
(2) full or partial backpay and reimbursement for lost fringe benefits, with interest, reduced by interim earnings from employment elsewhere, benefits received, and amounts that could have been received with reasonable diligence;
(3) if reinstatement is not awarded, a lump-sum severance payment at the employee's rate of pay in effect before the termination, for a period not exceeding thirty-six (36) months after the date of the award, together with the value of fringe benefits lost during that period, reduced by likely earnings and benefits from employment elsewhere, and taking into account such equitable considerations as the employee's length of service with the employer and the reasons for the termination; and
(4) reasonable attorney's fees and costs.
(c) An arbitrator may make either or both of the following awards for a violation of an agreement for severance pay under section 28-52-5(c):
(1) enforcement of the severance pay and other applicable provisions of the agreement, with interest; and
(2) reasonable attorney's fees and costs.
(d) An arbitrator may not make an award except as provided in subsections (b) and (c) of this section. The arbitrator may not award damages for pain and suffering, emotional distress, defamation, fraud, or other injury under the common law; punitive damages, compensatory damages or any other monetary award. In making a monetary award under this section, the arbitrator shall reduce the award by the amount of any monetary award to the employee in another forum for the same conduct of the employer. In making an award, the arbitrator's decision shall be based on the issues of law and fact.
(e) If an arbitrator dismisses an employee's complaint and finds it frivolous, or without foundation, the arbitrator may award reasonable attorney's fees and costs to the prevailing employer.
(f) An arbitrator may sustain an employer's complaint and make an award declaring that there is good cause for the termination of a named employee. If the arbitrator dismisses the employer's complaint, the arbitrator may award reasonable attorney's fees and costs to the prevailing employee. ADD}
{ADD 28-5.2-9. Judicial review and enforcement. -- ADD} {ADD (a) Either party to an arbitration may seek vacation, modification, or enforcement of the arbitrator's award in the superior court for the county in which the termination occurred, or in which the employee resides.
(b) An application for vacation or modification must be filed within ninety (90) days after issuance of the arbitrator's award. An application for enforcement may be filed at any time after issuance of the arbitrator's award.
(c) The court may vacate or modify an arbitrator's award only if the court finds that:
(1) the award was procured by corruption, fraud, or other improper means;
(2) there was evident partiality by the arbitrator or misconduct prejudicing the rights of a party;
(3) the arbitrator exceeded the powers of an arbitrator;
(4) the arbitrator committed a prejudicial error of law; or
(5) another ground exists for vacating the award under the provisions of chapter 35 of title 42.
(d) In an application for vacation modification, or enforcement of an arbitrator's award, the court may award a prevailing employee reasonable attorney's fees and costs. In an application by an employee for vacation of an arbitrator's award, the court may award a prevailing employer reasonable attorney's fees and costs if the court finds the employee's application is frivolous, unreasonable, or without foundation. ADD}
{ADD 28-5.2-10. Posting. -- ADD} {ADD An employer shall post a copy of this chapter or a summary approved by the department in a prominent place in the work area. An employer who violates this section shall be subject to a civil penalty not exceeding five hundred dollars ($500). The attorney general may bring a civil action, on behalf of this state, to impose and collect any civil penalty arising under this section. ADD}
{ADD 28-5.2-11. Retaliation prohibited and civil action created. -- ADD} {ADD An employer or other employing person may not directly or indirectly take adverse action in retaliation against an individual for filing a complaint, giving testimony, or otherwise lawfully participating in proceedings under this chapter whether or not the individual is an employee having rights under this chapter. An employer or other employing person who violates this section shall be liable to the individual subjected to the adverse action in retaliation for damage caused by the action, punitive damages when appropriate, and reasonable attorney's fees. A separate civil action may be brought to enforce this liability. The employer shall also subject to applicable procedures and remedies provided by sections 28-5.2-6 through 28-5.2-9 inclusive. ADD}
{ADD 28-5.2-12. Severability. -- ADD} {ADD If any provision of this chapter or the application thereof to any person or circumstances is held invalid, such invalidity shall not affect other provisions or applications of the chapter, which can be given effect without the invalid provision or application and to this end the provisions of this chapter are declared to be severable. ADD}
SECTION 2. This act shall take effect upon passage and shall be prospective in its application.
* * *
This act would create the Rhode Island Uniform Employment-Termination Act of 1995 which would prohibit an employer from terminating an employee without good cause, and would provide a procedure for arbitration by the Department of Labor of wrongful discharge claims.
The act would take effect upon passage and would be prospective in its application.
