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Possible Legal Issues When An Employee Leaves Your New York Business

Businesswoman leaving company with box, concept of New York business law

Even the best employees will at some point resign from your company. On the other hand, you may have to force out insubordinate or poor-performing workers. However an employee ends up leaving your business, there are potential legal issues in how you handle their exit. Firings and resignations need to be managed in light of employment laws.

The New York business lawyers of Rosenbaum & Taylor provide some practical advice.

Documenting Why the Employee Left

Employers generally have the right to terminate employment for cause. Bad work performance, insubordination, or presenting a danger to co-workers are some examples of cause. New York is an at-will employment state. That means, absent an illegal or retaliatory purpose, or a contract preventing it, an employer can fire its employees.

But therein lie three possible objections that the departing employee may raise:

  • Discrimination, which comes in many forms and violates state and federal law
  • Retaliation, for example as punishment for a protected whistleblowing activity
  • Breach of an employment contract

It is essential, to protect the employer’s rights, that all issues surrounding the termination be documented. Assume a hypothetical in which an employer fires an insubordinate employee. The following, at a minimum, should be documented:

  • Were any notices or warnings issued to the insubordinate worker prior to termination?
  • Was the worker spoken to by human resources or someone else in charge?
  • Did the worker have to complete remedial training in light of the insubordination?
  • Were disciplinary measures, less severe than termination, imposed upon the employee?
  • What do the company’s internal policies and procedures say about the termination?
  • If the employee was under contract, what terms thereof were relevant to the termination?

The point of documentation is to provide answers to these and related questions. In turn, the employer can adequately document that the termination was for a lawful purpose. If your company doesn’t already have policies and procedures in place to govern employee termination, we can help develop them.

Written Notice for a Terminated or Resigned Employee

New York’s labor laws require that employers provide written notice to a resigning or terminated worker. Failure to provide this notice could result in substantial legal penalties for the employer. To comply with the law, the notice must contain the following:

  • A statement that the employee has been terminated from employment
  • The date of termination
  • The date of the cancellation of employee benefits connected with the termination

It’s important to emphasize that the notification has to be in writing. It also must be given to the employee no later than five business days after the termination. The best practice is to give this notification as early as possible.

Protecting Trade Secrets and Intellectual Property

If your employee was privy to company trade secrets or intellectual property, there’s a risk of theft. It’s a good idea to protect this information long before the employee leaves, namely at hiring. You can integrate certain requirements into your employment contract or company policies that forbid the misuse of this information.

However, if you did not already take this step, you can still protect sensitive company information. The notice you provide to the departing employee can inform that individual of his or her responsibilities upon leaving. For instance, the worker may be in possession of a company laptop with proprietary information on it. You can require this to be returned and forbid the duplication or dissemination of sensitive data.

It’s best to work with an experienced attorney on these matters. For one, any contact with the resigned or terminated employee could be sensitive in nature. There may also be privacy and other legal considerations, so speak with a knowledgeable New York business lawyer.

Call Our Experienced New York Business Lawyers!

If you have questions or concerns about an employee who is leaving or has left your business, let us answer them. Rosenbaum & Taylor is here to handle all legal aspects of running your New York business. Reach out to our team today.

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