Q. I own a business in New Hampshire. I recently fired
one of my managers because he engaged in abusive behavior to some
employees. His approach to managing employees by yelling and
swearing at them was simply not acceptable. We had counseled the
manager on previous occasions about acceptable management styles
but his behavior escalated instead of improving. I fired him on
Monday after another incident with an employee, and he is now
claiming that, as a salaried employee, he should have been paid
through the entire week instead of just for Monday. Can he possibly
be right about that?
A. Probably not. Under New Hampshire law, a salaried employee is
entitled to be paid for the entire pay period if the employee works
any time during the pay period with very limited exceptions. In
January of 2005, this law was specifically revised to provide that
an employer may prorate to a daily basis when a salaried employee
is "terminated for cause." RSA 275:43-b, II.
Unfortunately, the term "for cause" is not defined in the
law so there is lack of clarity about what would constitute
"for cause" to justify the proration of the final pay to
a daily basis.
There have been several decisions by the New Hampshire Department
of Labor, including one decision as late as November of 2012, in
which the Department provides guidance on how they will evaluate a
situation such as this. In the November 2012 decision, a
salaried employee was terminated for poor performance and paid only
through the last day of work (and not for the entire pay period.)
The employee had previously received a written suspension notice
but that notice did not notify the employee that his actions could
result in termination. The employee sought payment for the entire
pay period. In ruling in favor of the employee, the Department
found that because the employee did not receive notice, express or
fairly implied, that his poor performance could be grounds for
termination, the employer could not terminate the employee
"for cause" for the purpose of prorating his salary to
the date of termination.
The Department pointed to a standard established by a New
Hampshire Superior Court case where the court stated that "an
employer may dismiss an employee 'for cause' if the
employee engages in misconduct. An employee's misconduct must
comprise reasonable grounds for termination, and the employee must
have received notice, express or fairly implied, that such
misconduct could be grounds for termination." The superior
court decision also cited other cases that held that an employer
must offer an employee a proper reason for a "for cause"
dismissal. The court stated that, in reviewing a "for
cause" dismissal, it would focus not on whether the employee
actually committed misconduct, but rather on whether the employer
reasonably determined it had cause to terminate.
Applying that reasoning to your situation, since you counseled the
employee about his abusive managerial style and further, since you
specifically told him that if the behavior continued, he could be
terminated, it would appear that you have met the test of a
"for cause" termination which would justify the proration
of your employee's pay to the last day of work. It would be
even better if you memorialized your counseling sessions in a
written document in the employee's personnel file but the
Department and superior decision both leave open that the notice to
the employee can be "express or fairly implied," and
there does not appear to be a hard and fast rule about written
notice. Of course, the best route to take for misconduct
situations is for an employer to provide an employee with notice
that the behavior is unacceptable and, if it gets to that point,
written notice that any continued poor performance will be grounds
for termination. Keep in mind that there may be some situations of
gross misconduct, such as an assault or sexual harassment, where
advance written notice may not be needed in order to justify a
"for cause" termination sufficient to justify the
proration of a salaried employee's pay to a daily basis. In
such a situation, the Department or a court would likely find that
the employee had implied notice, either from a handbook, training
or generally recognized workplace standards, that such behavior
would result in a "for cause" termination. Whether
or not your situation of an abusive manager would have justified
the daily pay proration even without the prior warning is an open
question but, you did this right; you addressed the situation when
it arose, you counseled the employee about what your expectations
were, and you gave clear notice that if the behavior continued it
would be grounds for termination.
Linda Johnson serves as co-chair for both the Litigation
Department and Education Law Group at the law firm of McLane, Graf,
Raulerson & Middleton, Professional Association.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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