Delaware HB 89:The "Employee Protection From Wrongful Termination Act."
Sheldon N Sandler
HB 89 would end employment at will
Delaware for employers with five or moreemployees.
replaces it with a
cause standard and mandatory arbitration forresolution
disputes, with an alternative for employers to elect a very generousseverance payment scheme
one month for every year
employment for allterminations except for "willful misconduct."
Employers with 5
more employees for each working day
more calendar weeksin the 2-year period preceding the temlination are subject to the Act. Employee isbroadly defmed to include anyone who works for hire, including supervisors andmanagers, but expressly excludes independent contractors.
Limit on employer ability to terminate.
Employers may not terminate employees who have been employed by the same employerfor one year or more and worked at least 520 hours during the 26 weeks precedingtemlination, except for "good cause." "Termination" means dismissal, layoff, orresignation/retirement induced by action or inaction on the part
the employer, i.e.coerced resignation or retirement. "Good cause" means:
"a reasonable basis related toan individual employee," considering relevant factors and circumstances such
duties,responsibilities, conduct, and performance; or (2) the exercise
business judgment insetting economic
short, "good cause" includes misconductand/or perfom1ance issues
well as layoffs
downsizing supported by legitimatebusiness reasons.The Act does not prohibit employers from terminating at the expiration
anemployment agreement for a specified duration, undertaldng, project, or assigrm1ent.
the employee stays on after expiration
the agreement, however, the Act applies until anew agreement is entered into).
Common law claims displaced.
The Act purports to extinguish all conm1on-law claims oftem1inated employees based
the termination or acts taken or statements made that are necessary to initiate or effect thetermination. Delaware does not recognize the tort
wrongful discharge, as such, thoughit does recognize the conm1on law implied covenant
good faith and fair dealing, so tinsprovision has at least a modicum
value to Delaware employers. It wold also bar somedefamation, detrimental reliance or fraud claims. The Act obviously does notlling to