Bill Text: DE HB89 | 2009-2010 | 145th General Assembly | Draft

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Bill Title: An Act To Amend Title 29 Of The Delaware Code Relating To The Delaware Strategic Fund.

Spectrum: Moderate Partisan Bill (Republican 8-1)

Status: (Introduced - Dead) 2009-03-24 - Introduced and Assigned to House Administration Committee in House [HB89 Detail]

Download: Delaware-2009-HB89-Draft.html

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SPONSOR:	Rep. J. Johnson & Rep. Keeley & Sen. Henry
	Reps. Barbieri, Mitchell, Mulrooney

HOUSE OF REPRESENTATIVES

146th GENERAL ASSEMBLY

HOUSE BILL NO. 89

AN ACT TO AMEND TITLE 19 OF THE DELAWARE CODE RELATING TO THE DOCTRINE OF EMPLOYMENT AT WILL AND PROTECTION FROM WRONGFUL TERMINATION.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE:

WHEREAS, the doctrine of "employment at-will" means that an employer may terminate an employee with or without just cause in the absence of an oral or written contract setting forth the terms, conditions and duration of employment; and

WHEREAS, the "employment at-will" doctrine is rooted in English Common Law and has been recognized and upheld by most courts across the county, including Delaware's courts; and

WHEREAS, although the law has progressed and employer-employee relationships are more equal than when the "employment at-will" doctrine first developed, courts continue to recognize the right of an employer to terminate an at-will employee without cause, subject only to certain statutory and court imposed restrictions; and

WHEREAS, in 1991 the National Conference of Commissioners on Uniform State Laws drafted and approved the Model Employment Termination Act to protect employees from wrongful discharge by requiring all dismissals be for "good cause"; and

WHEREAS, the Model Employment Termination Act reflects a fair and well-balanced compromise between the competing interests of employers and employees; and

WHEREAS, the General Assembly desires to extend the protections in the Model Employment Termination Act to all Delaware citizens and employers.

NOW, THEREFORE:

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE:

Section 1.Amend Chapter 7, Title 19 of the Delaware Code by adding a new "Subchapter V" thereto as follows:

"Subchapter V.Employee Protection From Wrongful Termination Act.

§740. Short Title.

This subchapter shall be known as the ‘Employee Protection From Wrongful Termination Act.'

§741. Scope of act; pre-emption of common law rights and remedies.

(a) This Subchapter shall not apply to any termination occurring prior to the its effective date;

(b) This Act shall not apply to a termination which occurs 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 Subchapter;

(c) Except as provided in subsection (e), this Subchapter 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 §743(a), is subject to an agreement for severance pay under §744(c), or is permitted by the expiration of an agreement for a specified duration under §744(d);

(d) An employee whose termination is not subject to §743(a) or §744(d) and who is not a party to an agreement under §744(c) retains all common-law rights and claims;

(e) This Subchapter does not displace or extinguish rights or claims of a terminated employee against an employer arising under state or federal statutes or administrative rules or regulations having the force of 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 Subchapter. Those rights and claims may not be asserted under this Subchapter, except as otherwise provided in this Subchapter. The existence or adjudication of those rights or claims does not limit the employee's rights or claims under this Subchapter, except as stated in 747(d).

§742.Definitions.

As used in this Subchapter:

(1) "Department" means the Department of Labor of this State;

(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 the State or any political subdivision thereof, a municipal corporation, or any other governmental subdivision, agency, or instrumentality, that has employed five or more employees for each working day in each of 20 or more calendar weeks in the two-year period next preceding a termination or an employer's filing of a complaint pursuant to §745(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 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.

§743. Prohibited Terminations.

(a) Unless otherwise provided in an agreement for severance pay under §744(c) or for a specified duration under §744(d), an employer may not terminate the employment of an employee without good cause;

(b) Subsection (a) shall only apply to an employee who has been employed by the same employer for a total period of one year or more and has worked for the employer for at least 520 hours during the 26 weeks next preceding the termination. A layoff or other break in service is not counted in determining whether an employee's period of employment totals one year, but the employee is considered to be employed during paid vacations and other authorized leaves. If an employee is rehired after a break in service exceeding one year, not counting absences due to labor disputes or authorized leaves, the employee is considered to be newly hired. The 26-week period for purposes of this subsection does not include any week during which the employee was absent because of layoffs of one year or less, paid vacations, authorized leaves, or labor disputes.

§744. Agreements between Employer and Employees.

(a) A right of an employee under this Subchapter 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 Subchapter. Those standards or prohibitions are 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 month's pay for each period of employment totaling one year, up to a maximum total payment equal to 30 months' pay at the employee'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 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 30 days after the employee's termination. An agreement under this subsection constitutes 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 constitutes a stipulation by the parties that those disputes will be subject to the procedures and remedies of this Subchapter;

(d) The requirement of good cause for termination does 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, §743 applies 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 counts toward the minimum periods of employment required by §743(b);

(e) An employer may provide substantive and procedural rights in addition to those provided by this Subchapter, either to one 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 Subchapter;

(f) An employing person and an employee not otherwise subject to this Subchapter 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 Subchapter imposes 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 Subchapter;

(i) By express written agreement before or after a dispute or claim arises under this Subchapter, 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 Subchapter, an employer and an employee may agree to judicial resolution of the dispute or claim.

(k) The substantive provisions of this Subchapter apply under an agreement authorized by subsections (i) and (j).

§745. Procedure and Limitations.

(a) An employee whose employment is terminated may file a complaint and demand for arbitration under this Subchapter with the Department not later than 180 days after the effective date of the termination, the date of the breach of an agreement for severance pay under §744(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 is 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 procedures is not a condition precedent for filing a complaint under this Subchapter;

(b) Except when an employee quits, an employer, within 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 Subchapter or a summary approved by the Department;

(c) An employer may file a complaint and demand for arbitration under this Subchapter with the Department to determine whether there is good cause for the termination of a named employee. At least 15 business 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 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 not exceeding the maximum filing fee for a civil action in the Superior Court. The Department may waive or defer payment of the filing fee upon a showing of the complainant employee's indigency.

§746. Arbitration; Selection and Powers of Arbitrator; Hearings; Burden of Proof.

(a)Except as otherwise provided in this Subchapter, the Uniform Arbitration Act of this State (10 Del.C. §5701, et. seq.) shall apply to proceedings under this Subchapter as if the parties had agreed to arbitrate under that statute. The Department shall adopt procedural rules to regulate arbitration under this Subchapter. The Administrative Procedure Act and other statutes of this State applicable to the procedures of state agencies do not apply to arbitration under this Subchapter;

(b) The Department shall adopt rules specifying the qualifications, method of selection, and appointment of arbitrators. An arbitrator serving under this Subchapter exercises the authority of the State;

(c) Subject to rules adopted by the Department, all forms of discovery provided by applicable state statute, rule, or regulation are 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§744(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 §742(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.

§747. Awards.

(a) Within 30 days after the close of an arbitration hearing or at a later time agreeable to 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 or more of the following awards for a termination in violation of this Subchapter:

(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 30 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 §744(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). 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 is subject to the rules of issue, fact, and judgment preclusion applicable in courts of record in this State;

(e) If an arbitrator dismisses an employee's complaint and finds it frivolous, unreasonable, 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.

§748. Judicial Review and Enforcement.

(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 thirty (30) 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 Uniform Arbitration Act arbitration act of this State.

(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.

§749. Posting.

An employer shall post a copy of this Subchapter or a summary approved by the Department in a prominent place in the work area. An employer who violates this section is subject to a civil penalty not exceeding $100.00. The Attorney General may bring a civil action, on behalf of this State, to impose and collect any civil penalty arising under this section.

§750. Retaliation Prohibited and Civil Action Created.

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 Subchapter, whether or not the individual is an employee having rights under this Subchapter. An employer or other employing person who violates this section is 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 is also subject to applicable procedures and remedies provided by §745 through §748 of this subchapter.

§751. Severability.

If any provision of this Subchapter or its application to any person or circumstance is held invalid, the invalidity does not affect other provisions or applications of this Subchapter which can be given effect without the invalid provision or application, and to this end the provisions of this Subchapter are severable

§752.Savings and Transitional Provisions.

This Subchapter does not apply to the termination of an employee within six months after the effective date of this Subchapter based upon the employee's refusal to enter into an agreement meeting the minimum standards of §744(c), which the employer, in the exercise of good faith business judgment, may impose as a condition of continued employment.".

Section 2.The Department of Labor shall promulgate regulations to implement the provisions of this act.

Section 3. Effective Date.

This act shall take effect 180 days after enactment.

SYNOPSIS

This act is based on the Model Employment Termination Act promulgated by the National Conference of Commissioners on Uniform State Laws in 1991.The basic philosophy of this act is one of compromise and balancing the competing interests of employers and employees.Thus, although covered employees are granted an expanded substantive right to "good cause" protections against termination, available remedies are limited to reinstatement, with or without backpay, and severance pay when reinstatement is unfeasible.Compensatory and punitive damages are eliminated, except in cases where an employer retaliates against an individual for filing a complaint, giving testimony or otherwise participating in proceedings under this Subchapter.

Pursuant to this act, employees who have worked for an employer for more than one year may only be fired for "good cause."Part-time employees working less than 20 hours per week are not covered by the act.As to covered employees, this act extinguishes all common law rights and remedies against an employer.This act, however, does not displace or extinguish any rights granted to an employee under any federal or Delaware statutes, administrative rules or regulations having the force of law.Similarly, this act does not displace or extinguish any rights granted to an employee under a collective-bargaining agreement or an express oral or written agreement relating to employment.Employees not covered by the provisions of this act retain all common law rights and remedies.

This act does not apply to the State or its subdivisions or agencies, municipal corporations or private employers with less than five employees."Good cause" for a termination is defined as: (i) a "reasonable basis" related to an individual employee in view of factors such as conduct on the job, job performance and employment record; or (ii) the exercise of business judgment in good faith by the employer.The requirement of good cause for a termination does not apply to a termination which occurs at the expiration of express term of employment or upon completion of the specified task or project to which the employment related.

The provisions of this act cannot be waived except by an express written agreement of the employer and employee providing for severance pay in the event the employee is terminated without good cause.Any covered employee whose employment is terminated may file a complaint and demand for arbitration with the Department of Labor within 180 days of the effective date of the termination.An employer seeking a declaration that good cause exists for a termination may also file a complaint and request for arbitration.Arbitration pursuant to this act shall be governed by Delaware's Uniform Arbitration Act.Either party to an arbitration proceeding may appeal the arbitrator's award to the Superior Court of the County in which the termination occurred.

The act will take effect 180 days after enactment to allow the Department of Labor to promulgate regulations implementing this act.