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Termination Upon Receipt by Employee
Question:
My employment with a known teaching institution, where I had a faculty position for three and a half years, was recently terminated. The letter I received states that my employment was terminated based on a clause in the contract that states, "Termination… Upon receipt by Employee of 60 days (unless a larger period is otherwise specified in writing) prior written notice or 60 days severance pay, or a combination thereof, from Employer notifying Employee that Employer has exercised Employer's option to terminate the employment relationship and this agreement with or without cause," in my case without cause.
The clause goes on to state the following: "upon termination of this Agreement and Employee's employment, the employee shall be entitled for the following: (i) accrued but unpaid salary; and (ii) accrued but unpaid vacation benefits; and (iii) vested retirement and disability benefits, if any, subject to plan provisions. Employee shall not be entitled to any other form of compensation including incentive pay or bonuses."
The first two entitlements ( i and ii above) were met. I also received a letter stating that my benefits:
- HEALTH PLAN COVERAGE
- FLEXIBLE SPENDING ACCOUNT BENEFITS
- GROUP TERM LIFE AND LONG TERM DISABILITY
They were all terminated effective the day of my employment termination. With this somewhat limited background, here are the questions I have:
For the last 2 years or so my colleagues and me were getting annual bonus based on certain criteria, including incentives, productivity etc. as part of our employment. The annual bonus (covering from January to Dec.) was being issued to us on a quarterly basis. I have been getting the full amount of the bonus every quarter. My employment was terminated exactly half way through this year. I have already gotten the first quarter bonus but they have not issued me a check for the second quarter. All through the employment, I was told that I was doing fine with regard to the criteria required to attain the bonus points. On the day of Termination, they in fact, told me that the check for the second quarter bonus would be issued to me soon. Though my colleagues who are still employed did get the check already several weeks ago I have not gotten it. Given the fact they chose to terminate my employment without a cause, and given the fact that I have been doing fine with regard to meeting the criteria for the bonus, is it legal for them to deny me the bonus for which I have worked hard? I believe this statement in the contract, "Employee shall not be entitled to any other form of compensation including incentive pay or bonuses" refers to bonuses and incentives during the 60 days period for which severance pay was given and not to the time of actual employment time.
If my employers chose to terminate my employment "with
no cause," is it legal for them to terminate my family's
health benefit and mine on the day of employment termination?
In other words, weren't they supposed to extend the health
coverage that I had during employment, for the 60 days period
for which I received severance pay? How about the Long Term
Disability?
I would appreciate if I can get advice.
Response:
Your assumption is correct. Based on the information you provided, you would be contractually required to provide six months notice prior to leaving your current employer. Without knowing your specific circumstances, I would suggest that you discuss the notice period in your current interviews. You might find that the long notice period works well with your prospective employer's plans, especially if your employer is terminating another physician or needs the time to prepare the office for your arrival. Many employers are actually used to hiring employees well in advance of the employee's start date.
You may also need extra time to relocate you and your family. Alternatively, you could discuss your plans with your current employer. You may find that your employer would appreciate your up front style and might allow you to leave prior to completing the six month notice period. This may be the case if your employer finds that it can replace you prior to the end of the six month period. Additionally, some employers would not want you around the work place after tendering your letter of resignation. Finally, you need to make sure the contract does not allow for any other means of terminating the relationship that would be applicable to your given situation.
The preceding was prepared by John Powers, JD, an attorney with the healthcare practice of Husch & Eppenberger. It is prepared as a source of general information concerning recent health law developments and is not legal advice or an opinion. No action should be taken in reliance upon this information without obtaining the advice of a knowledgeable healthcare attorney.
Attorney John Powers has partnered with Cejka Search to address healthcare legal issues in our Legal Counsel feature on cejkasearch.com. His areas of expertise include hospital and medical practice issues, physician recruitment transactions, managed care counseling, development of MSOs, IPAs, and managed care delivery systems, antitrust counseling to healthcare clients, insurance matters, physician-hospital contracting, medical staff matters, and bioethical issues.
If you have a question or comment for Mr. Powers, please send a message to: info@cejkasearch.com