Unemployment and Layoffs on the rise in Massachusetts.

The collapse of the housing market in 2008 has continued to echo throughout the American economy in 2009. Consumers’ spending and confidence have declined, and companies across all sectors have cut their workforces. In Massachusetts, the Division of Unemployment Assistance, which cuts unemployment checks for laid-off state residents, has added additional hours to meet the increased volume of applications.

By default, most employees are considered “at-will” employees. This means that either the employer or employee can terminate the employment relationship at any time, for a bad reason, a good reason, or no reason at all. There are certain exceptions to the rule where an employer cannot terminate an employee for reasons that are against public policy, e.g. for serving jury duty, or for refusing to violate the law.

In some cases, a court could construe an employee handbook as a modification of the default rule, and thus require dismissal only “for cause.” Alternatively, if an employee has signed an employment contract, that document might preclude the employer from dismissing the employee without cause.

After being terminated, a Massachusetts resident can apply for unemployment insurance through the DUA. Unemployment insurance is temporary income for employees who are let go through no fault of their own. Payments to terminated employees are made from an unemployment trust fund, which is funded by state-mandated employer contributions. An individual must be actively looking for work to continue claiming unemployment benefits.

Individuals who qualify for benefits may also be eligible for health insurance assistance through the state’s Medical Security Program. A former worker may also keep his or her medical, dental, and vision benefits through the federal Consolidated Omnibus Budget Reconciliation Act.

COBRA requires all employers with 20 or more employees to offer health benefits to workers and their dependents who have been terminated (except for gross misconduct) or had their hours reduced so that they no longer qualify for health insurance. In general, eligibility for COBRA benefits maxes out at 18 months, but in certain cases it may be extended to 36 months.

Massachusetts law extends protections to terminated employees at smaller companies, those with between 2 to 19 employees, although the coverage is more limited.

Vacation time is considered wages. Thus, if a Massachusetts employer has a vacation policy, and the terminated employee has accrued vacation time, then he or she is entitled to all unused vacation time. There is no similar entitlement for unused sick or personal time.

Former employees who have had life insurance policies for at least the last five years must, under Massachusetts law, continue to be insured for 31 days after termination. The law grants a terminated employee the right to convert the policy to an individual life insurance policy within the 31-day window.

Some departing employees may be subject to non-compete or non-disclosure agreements. In a non-compete agreement an employee agrees to not compete with a former employer at another company, or by starting his or her own competing company. A court will only enforce reasonable non-compete agreements that are limited in geography and duration. By comparison, an NDA or confidentiality agreement could prohibit an employee from revealing knowledge of trade secrets or specific financial information.

The Worker Adjustment & Retraining Notification (WARN) Act generally requires employers with 100 or more employees to give at least 60 days advance notice to employees of a plant closing or mass employee termination. The statute uses an intricate formula that focuses on the number of employees, the form of the dismissal (layoff or plant closing), and the nature of the termination of employees to determine whether notice is required. Exceptions to the notice requirement can exempt a company from the notice requirement, such as if the employer experiences “unforeseen business circumstances”.

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Contact Parker|Scheer Employment Law Attorneys

If you are in need of an unemployment lawyer, the business lawyers at Parker Scheer, who are knowledgeable in unemployment law, will be happy to assist you. Please call Barry S. Scheer at (617) 886-0500 or contact Barry Scheer by email. You can also telephone our offices in Boston seven days a week at toll free 866-414-0400.