Internet Employment Termination Lawful and Routine

Internet employment terminations are now lawful so long as they are properly executed.

New Jersey Law Journal   May 5, 2021

By Jonathan Bick  |  Bick is counsel at Brach Eichler in Roseland, and chairman of the firm’s patent, intellectual property, and information technology group. He is also an adjunct professor at Pace and Rutgers Law Schools.

Radio Shack’s use of the internet to give more than 400 employees notice of their involuntary separation from the firm in 2006 resulted in “abusive discharge” cause of actions arguing that an email termination was degrading and humiliating. However, during the past two years internet termination has become routine, as evidenced by the three-minute Zoom call that simultaneously terminated more than 900 Better.com employees, and in a similar manner an American used-car company, Carvana, fired 2,500 employees. In short, internet employment terminations are now lawful so long as they are properly executed. 

Traditionally, job termination notices took the form of a pink slip employees found in their mailbox or paycheck. As communication technology has advanced, so have the methods of giving termination notices to employees. Face-to-face verbal communication of termination has given way to the use of mailing, then to phone calls, then to phone messages, then to -mail messages, and now to internet video communications, such as Zoom, Microsoft Teams, and Skype. 

Generally, employers are not regulated as to the manner or content of employee terminations. New Jersey courts have generally stated that where no definite term is indicated in a contract of employment, the contract is deemed to be at will and subject to termination with or without cause. More specifically, in accordance with New Jersey common law, in the absence of an employment contract, employers or employees have been free to terminate the employment relationship with or without cause (English v. College of Medicine and Dentistry of New Jersey, 73 N.J. 20  (1977)).

The court in Hogan v. Bergen Brunswig, 378 A.2d 1164 (1977), found that the major exception arises as a result of employee–employer agreement which arise via contract and that contract specifically discloses a termination process. Additionally, most states, including New Jersey, recognition of a public policy exception to the at-will doctrine as reflected by judiciary to adapt common law exceptions, including abusive discharge (Pierce v. Ortho Pharmaceutical, 84 N.J. 58 (1980).

While federal, state and local employment laws may vary, none specifically bar the use of the internet for communicating employment termination notices. Nevertheless, using the internet to communicate a notice of employment termination may result in legal difficulties not associated with traditional employment termination communication methods.

The amelioration of employment termination legal difficulties usually includes: confirming that the employee’s termination is not limited by an employment contract or by the employer’s employee handbook (possibly resulting in an implied contract); disclosing the reasons for the discharge; informing the employee of his rights, such as for continuing health care as required by the Consolidated Omnibus Budget Reconciliation Act (COBRA), and insuring that the conduct associated with the employee termination communication is neither shocking or outrageous. 

While the same legal difficulties (and ameliorations) are associated with both traditional and Internet employment termination communications, use of the Internet potentially adds additional difficulties. More specifically, miscommunications legal difficulties may result from technical difficulties due to low internet bandwidth and sub-optimal internet equipment giving raise to distractions, signal loss, and lack of access to nonverbal cues. 

Additionally, legal difficulties associated with conduct may result from failure to properly address privacy issues (termination notice delivered to a member of an employee’s family accidently), language issues (termination notice delivered in a language not fully understood by the employee), and time zone issues (termination notice delivery while employee was not fully awake).

The court in Wilson v. Hispanic Housing Development, No. 20 CV 1044, (N.D. Ill. May. 20, 2021), found that actions exist that allow at-will employees to recover for inappropriate discharge. Abusive discharge claims are brought when no claim for breach of contract or violation of a statute can be alleged. As noted in Sherman v. St. Barnabas Hospital, 535 F. Supp. 564 (S.D.N.Y. 1982), the application of abusive discharge is intended to prevent discharges that are contrary to public policy.

Abusive discharge and intentional infliction of emotional distress are two tort actions that may be applicable to an inappropriate use of internet communications for the purpose of informing employee of their dismissal. The type of conduct necessary to support a claim of abusive discharge will not inevitably sustain a claim for intentional infliction of emotional distress.

Abusive discharge is, by and large, based upon behavior where the employer is motivated by a specific intent to cause harm to the employee, or where a clear mandate of public policy is violated by the discharge. To prevail, a plaintiff-employee must connect the use of the email termination with contravention of public policy, such as a breach of fair dealing. This threshold is difficult to cross; consequently, a claim of abusive discharge, when solely related to an electronic discharge notice, is unlikely to prevail.

More likely, a court will allow at-will employees to sue their employers for intentional infliction of emotional distress on the grounds than the use of an email to communicate the termination is both shocking and outrageous conduct. In such an instance, a plaintiff-employee may recover for emotional distress caused intentionally by the defendant-employer.

The elements of a cause of action for the intentional infliction of emotional distress are: an extreme and outrageous act by the defendant; an intent by the defendant to cause severe emotional distress; severe emotional distress in the plaintiff; and a causal relationship between the plaintiff’s emotional distress and the defendant’s conduct.

To prevail, the plaintiff-employee must show that the use of email to give notice of job termination was outrageous and beyond all reasonable bounds of community decorum. Each case must be determined with respect to its specific facts; however, some courts have extended the theory to cover reckless conduct. See Bodewig v. K-Mart, 635 P.2d 657 (1981), where the employer’s conduct was reckless and beyond that which the community finds acceptable.

To establish the tort of intentional infliction of emotional distress, there must be more than bad faith. Although the tort of intentional infliction of emotional distress is a well-established theory of recovery and is not unique to the employment setting, courts are indisposed to sustain such a claim unless the conduct is despicable. For example, the court in Terry v. Pioneer Press, 947 P.2d 273 (1997), stated that if an employee’s mental distress is caused solely by his discharge, and if the discharge was permitted in his contract, then the employer has a complete defense, even if the employer is aware that the discharge will cause emotional distress.

To prevail in an intentional infliction of emotional distress action, a plaintiff-employee must show that the use of an email termination notice was more than merely humiliating (see American Road Service v. Inmon, 394 So. 2d 361 (1980), or malicious (see Rawson v. Sears, Roebuck & Co., 530 F. Supp. 776, (1982)). Rather, to prevail, a plaintiff-employee must show the use of an email termination notice was outrageous.

To mitigate the potential for an intentional infliction of emotional distress claim, an employer contemplating the use of electronic termination notices can prepare the employees and offer services to mitigate the impact of the use of such electronic notices. More specifically, employers are well advised to inform employees in a series of meetings that layoff notices would be delivered electronically. 

Such meetings should disclose the employer’s intended use of the internet communications (one-way—email—and/or two-way—video) to give notice of job terminations, as well as offering follow-up meetings for its laid-off employees. Additionally, the employer should state that internet notification was quicker and allowed more privacy than breaking the news in person. These action will ameliorate the basis for claims of abusive discharge and intentional infliction of emotional distress.

The use of internet employment termination notices may also give rise to other legal difficulties. More particularly, an internet termination notification process may result in additional post-termination liability for the employer, as compared to traditional on site notification processes. On-site termination notices allow employers an opportunity to immediately exchange severance checks for litigation releases and to immediately secure company assets, such as company-issued hand-held internet devices, laptops, and cellphones.

Additionally, the internet communications are either private nor secure. Normally, internet messages are sent through a vast system of routers and servers. Some internet communications travel across the country, even when the email sender and recipient are in the same building. At various points along this path, email messages are stored, and the contents of private conversations and business transactions can be retrieved, read, and abused. In addition, email messages are habitually stored by third parties on backup tapes that are kept for years. Consequently, the use of an employee termination internet communication particularly damaging information related to a job termination notice may give rise to a defamation claim under certain circumstances, in light of the fact that internet use has been equated to publishing.

Employers who use internet termination communications may reduce liability associated with email distribution, including negligence and privacy protection failure, by encrypting the Internet communication.