Note that in the U.S., most employees are not subject to a contract, but are at-will. The entries below address at-will employees. To the extent that an employee has a contract with the employer, the terms of the agreement, including those related to termination, are governed by contract law.
Procedures For Terminating the Agreement
In Tennessee, employees are at-will, meaning they can be terminated at the will of either the employer or the employee for any lawful cause, or for no cause at all. If there is an employment contract in place, then general principles of contract law will apply to terminating that agreement.
See above. An employer can terminate the employment at any time and for any reason not in conflict with the above. Additionally, Tennessee law requires an employer to furnish a completed Notice of Separation form to a terminated employee (this form assists the employee in filing for unemployment compensation benefits).
A voluntary resignation can serve to terminate the employment relationship.
Termination On Notice
No advance notice of termination is generally required, unless mandated by the parties’ employment agreement. However, under federal and state law employers of a certain size must provide advance notice of any mass layoff or plant closing.
Termination By Reason Of The Employee's Age
Generally, not allowed, except in limited cases where retirement is required by law or pursuant to a bona fide occupational qualification under the Age Discrimination in Employment Act (ADEA).
Automatic Termination In Cases Of Force Majeure
Yes, under the principles of termination described in the preceding sections.
No specific rules unless required by a collective bargaining agreement. However, under federal and state law employers of a certain size must provide advance notice of any mass layoff or plant closing.
Termination By Parties’ Agreement
The at-will relationship may be terminated by either party for any reason or for no reason. No court or regulatory body approval is needed for the termination to be effective.
Directors Or Other Senior Officers
No specific rules.
Special Rules For Categories Of Employee
Employees who are represented by a labor union or are part of a collective bargaining agreement may only be terminated pursuant to the terms of that bargaining agreement.
Tennessee has a general whistleblower protection statute that protects employees who report illegal activity. Also, Tennessee has adopted narrow statutory protections for other activities. Employees who engage in protected activities under laws in the following subject areas are protected from retaliation: discrimination, equal pay (wage discrimination), hazardous chemicals, and occupational safety and health.
Specific Rules For Companies in Financial Difficulties
If applicable, the notice requirement required for certain employers for mass layoffs or plant closings (see above) may be waived.
Special Rules For Garden Leave
No specific rules.
Restricting Future Activities
Non-competition agreements are not favored in Tennessee but may be enforced if deemed reasonable under the facts of the case. Non-solicitation agreements (e.g. for current employees or customers) may likewise be enforced.
No specific rules requiring severance payments. However, such payments would be taxable as regular income.
Special Tax Provisions And Severance Payments
Allowances Payable To Employees After Termination
There are no allowances payable to employees after termination.
Time Limits For Claims Following Termination
Employees must file a charge alleging discrimination with the Equal Employment Opportunity Commission (“EEOC”) within 300 days after the unlawful discriminatory practices alleged in the charge were committed. The employee’s right to sue in federal court is contingent upon filing a charge of discrimination with the EEOC. A suit in federal court alleging violation of Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act and/or the Age Discrimination in Employment Act must be filed within 90 days of receipt of the EEOC’s Dismissal and Notice of Rights. Suits alleging violation of the federal Equal Pay Act (EPA) must be filed in federal or state court within 2 years (3 years for wilful violations) of the alleged EPA underpayment. Suits for claims of unpaid overtime or violations of minimum wage under the Fair Labor Standards Act (FLSA) must be filed within two years (three years for wilful violations) of the alleged violation.
An employee has one year to file a lawsuit alleging discrimination under the Tennessee Human Rights Act (THRA). That employee may file a charge with the Tennessee Human Rights Commission but is not required to do so prior to filing suit under the THRA. Filing a charge with the THRC does not toll the one-year statute of limitations on filing a lawsuit alleging discrimination under the THRA. An employee injured at work has one year to file a workers’ compensation claim in Tennessee.