Fired Right Before Benefits Eligible--Lawful?

October 1, 2007 7:36 AM

Someone I know was fired on Saturday, 9/29, from his hourly job. He was eligible to start receiving benefits (after the six month waiting period) on 10/1. We live in a at-will state and I know you can be fired or quit for most any reason. I'm not wondering about the reason he was fired--I am wondering about the timing of it. It seems to me that the company conveniently got rid of him right before he became benefit-eligible as a cost-saving measure, and I am curious if this is in any way unlawful? We are in Georgia.
posted by FergieBelle to Law & Government (22 answers total)

I'm far from being a lawyer but it seems to me that regardless of the legality of firing to avoid paying benefits, as a practical matter, it is almost impossible to prove that that was the reason for the firing. If Georgia is an at will state, the company doesn't even have to provide an explanation. It can be something as lame as, "He wasn't working out or fitting in." Proving that the cause was something else would be sufficiently costly that his time would probably be better used in finding a job that doesn't pull these kinds of stunts.
posted by MasterShake at 7:50 AM on October 1, 2007

I don't see any reason why this wouldn't be lawful. In fact, such waiting periods protect employers, and they probably did realize they had 6 months to decide whether the person was going to work out, used it, and decided at that point that they'd rather sever ties than "commit" to the relationship.

That said, six months?! I guess I've been lucky to never have had any waiting period at all.
posted by iguanapolitico at 7:52 AM on October 1, 2007

Section 510 of ERISA (29 USC §1140) makes it unlawful to discharge an employee in order to avoid paying benefits under an ERISA plan (which would include most health plans). However, proving that was the real reason is another issue, and the timing alone won't be enough.
posted by pardonyou? at 8:30 AM on October 1, 2007

What was the reason they gave for the termination?
posted by hermitosis at 8:34 AM on October 1, 2007

Agreeing with iguanapolitico on this one. Not all, but many of the positions I have had have included a probationary period. Generally these things last about 3 months, but I have heard of them lasting up to a year. As you know, with at will employment, even without this probationary period any hiring is presumed to be "at will"; that is, the employer is free to discharge individuals "for good cause, or bad cause, or no cause at all," and the employee is equally free to quit, strike, or otherwise cease work.
posted by B(oYo)BIES at 8:36 AM on October 1, 2007

At will is not the catch-all some of you think it is. A better way to think of at will employment is: "The employer is free to fire you for any reason, or no reason at all, unless that reason is otherwise protected by law." The exception includes such things as discrimination (race, sex, age, religion, disability, etc.), and a variety of other reasons (public policy, whistleblowers, FMLA, military service, benefits, etc.)

Even a strict "probationary" period would not allow an employer to fire someone because of their race, or to avoid paying benefits.
posted by pardonyou? at 8:44 AM on October 1, 2007

Georgia prides itself on being a 'Right To Work' state. In that particular state, this means 'Right to Get Screwed'.

Your friend just got screwed. There's not a damn thing he can do about it.
posted by Malor at 8:46 AM on October 1, 2007

I was fired at the exact same moment. In fact, I was let go the very day before my benefits would have come into effect and I would have gone from temp to perm status as an hourly employee. It's not an uncommon practice, as in my case it happened in San Francisco. The irony was that no one told me I was fired, and I showed for work on Monday and worked almost six hours before anyone called a meeting.
posted by parmanparman at 8:54 AM on October 1, 2007

Though I feel sorry for your friend I am constantly annoyed by those states (and resdents) who eschew unions, decent regulation and anything that would protect them and then, later, find that they have a problem...don't mourn, boys, organize.
posted by Postroad at 8:55 AM on October 1, 2007 [1 favorite]

Malor, "right to work" has nothing to do with this situation -- that concept means only that an employee can refuse to join a union.

FergieBelle, you're getting some really poor advice. I suggest your friend talk to a lawyer. If there's any basis to believe that it was the vesting of benefits that sparked the discharge (beyond the suspicious timing), he or she may have a claim.
posted by pardonyou? at 8:57 AM on October 1, 2007

pardonyou? Even a strict "probationary" period would not allow an employer to fire someone because of their race, or to avoid paying benefits.

I completely agree with the race portion of your comment, but where are you getting the 'or to avoid paying benefits' factoid?

Checking over at 'What Georgia Employers Need To Know - Courtesy of the State Bar of Georgia', we can see that age, bankruptcy disability, equal, pay, pregnancy, race, retaliation, and sexual orientation, are definitely covered, however I am not finding anything about avoiding the payment of benefits. If the federal law covered avoiding paying benefits, then s/he is golden, but as far as I know, they don't.

Also if you have a contract stating a minimum length of employment, you may have a case, but I am pretty sure that is a 'no.'

Another interesting read from this article at FindLaw.com: In Georgia, most employees usually are regarded as employees "at will." This means that the employee works at the will of the employer and the employer can fire the worker for any reason at any time. It has been said that the worker can be terminated for "a good reason, a bad reason, or for no reason at all." The at will rule allows an employer to terminate employees for almost any reason. For example, Georgia courts have said that employers can terminate employees for refusing to commit a crime, reporting crimes committed by other employees, filing a workers' compensation claim, filing for bankruptcy, and testifying against the employer in a court proceeding.




posted by B(oYo)BIES at 9:01 AM on October 1, 2007

I completely agree with the race portion of your comment, but where are you getting the 'or to avoid paying benefits' factoid?

Section 510 of the Employee Retirement Income Security Act (ERISA). See my comment here.
posted by pardonyou? at 9:06 AM on October 1, 2007

Yeah, I just look at that.

But how I read this...

It shall be unlawful for any person to discharge, fine, suspend, expel, discipline, or discriminate against a participant or beneficiary for exercising any right to which he is entitled under the provisions of an employee benefit plan

...he is not yet entitled under the provisions of an employee benefit plan per the OP's report that "he was eligible to start receiving benefits (after the six month waiting period)," which he misses by one day.

I am not saying that I disagree with pardonyou?'s suggestion to contact a lawyer. That is always the best idea, with these type of questions. Another route you can take to get questions answered would be to contact the EEOC [phone], Georgia Department of Labor [phone], or the State Bar of Georgia [phone]
posted by B(oYo)BIES at 9:16 AM on October 1, 2007

You didn't read far enough. The section goes on to say:

...or for the purpose of interfering with the attainment of any right to which such participant may become entitled under the plan

Trust me on this -- it applies to this situation. The problem FergieBelle's friend is going to have is proving that the real reason he/she was discharged was specifically to interfere with his/her vesting. It's a high burden.
posted by pardonyou? at 9:25 AM on October 1, 2007

Union organizer (who has worked in the lovely state of Georgia) here, really just chiming in to say that pardonyou? has it - it's illegal under ERISA, but in this case it's not provable, unless the friend's boss said 'No other problems, but we're letting you go because your benefits kick in tomorrow' (and difficult even then).
posted by crabintheocean at 9:46 AM on October 1, 2007

Yea, it's the provable part in GA that's a bitch. My dad was fired in what appeared to be a clear case of age discrimination. He hired a lawyer and the whole 9 yards and lost because beyond the fact they fired every manager 50+ in the company, there was nothing written down saying the firings had to do with age.

crabintheocean has the crux of the issue- If the company's smart, they will have no documentation whatsoever that this was a move to cut costs, prevent benefits, etc. If there is evidence otherwise besides your friend's isolated incident (which the company will surely claim), proving it could be a problem.

Not to say your friend doesn't have a case, but experience (particularly in GA) is that winning a case like this requires more than firing date on its own.
posted by jmd82 at 10:02 AM on October 1, 2007

Response by poster: Well, thank you for the responses.

I knew it would be difficult to prove, but I was curious if there was anything out there that would prohibit this type of thing. Thank you for your input.
posted by FergieBelle at 10:17 AM on October 1, 2007

This shit used to happen to me constantly- being out of work every three months is a heinous bitch, and there's nothing you can do to prove that they're doing it.
posted by Pope Guilty at 10:25 AM on October 1, 2007

Where I work we have a contract but the terms of the contract are not in effect until the 6th month. It's called "orientation" and when you are hired you are specifically told that in those 6mos you can be fired for absolutely anything without warning. (Health benefits, however, kick in at 3mos) It's called "at will" and in here in CA the best you can hope for is unemployment.

A certain superMart and fast food joints have made at will very powerful here. Employees don't have very much power and employers only need to explain themselves in unemployment hearings.
posted by M Edward at 1:13 PM on October 1, 2007

Also, there are some situations where the company may not be subject to ERISA. Mainly in situations where the insurance benefits are paid out of the employer's funds and not out of the funds of an insurance company.
posted by slavlin at 2:25 PM on October 1, 2007

The ERISA clause excluding avoidance of benefits payments under an employee benefits plan does not apply to a case of probationary employment, much the point of which is to keep the employee out of the benefits plan and any other commitment to a continued relationship until the employer decides to make a final commitment.

The ERISA exclusion applies to benefits that have already commenced. Your friend is sadly out of luck. Welcome to the American labor movement.
posted by gum at 5:58 PM on October 1, 2007

The ERISA clause excluding avoidance of benefits payments under an employee benefits plan does not apply to a case of probationary employment, much the point of which is to keep the employee out of the benefits plan and any other commitment to a continued relationship until the employer decides to make a final commitment.

This is not true.
posted by pardonyou? at 9:24 AM on October 2, 2007