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You're Fired! Arizona Law and Employee Termination Overview

Posted By Cindy Hesch, Thursday, May 4, 2017
Updated: Wednesday, May 3, 2017

You're Fired! Arizona Law and Employee Termination Overview

Written by Matthew M. Kinney, TSC, CSP

Arizona is considered to be an employer friendly state by most employers; however, this does not mean there aren’t pitfalls for the unwary or uninformed.  Terminations are almost always difficult and should be reviewed internally for several factors including unintended bias, costs (rehiring, training, and lost productivity), as well as possibly reviewed by qualified counsel.  Termination best practices always apply no matter how employer friendly Arizona may be.

Quick Overview of Arizona Employee Termination Law

Fortunately for employers, Arizona does not have any laws on procedures that must be followed in regard to discipline and employee grievances nor does it have anything like a Worker Adjustment and Retraining Notification Act that applies to layoffs or plant closures.  It is one of the least unionized states in the country; however, it also falls into Region 28 of the National Labor Relations Board which is considered one of the most aggressive regions in the country for employers.  Arizona is a “right to work” state and employers cannot penalize employees because of refusal to join a labor union (A.R.S. § 23-1302) and conversely, a labor union cannot intimidate or compel an individual to join their ranks as a condition of the individual’s employment (A.R.S. § 23-1304).

Employees in Arizona are considered at-will employees as defined by the Arizona Employment Protection Act (A.R.S. § 23-1501(A)(2)).  Employees can challenge their termination under the Arizona Employment Protection Act in one of several ways:

·         termination in breach of written contract which sets out that the employment relationship will remain in effect for a set period of time or expressly restricting either party’s right to terminate the employment relationship;

·         termination in violation of the Arizona Civil Rights Act or other Arizona statutes;

·         termination for refusing to violate the Arizona Constitution or Arizona statute; or

·         for employees in the public sector, where the employee has the right to continued employment under either the United States or Arizona Constitutions.

Arizona law (A.R.S. § 23-353(A)) provides that when an employee is discharged that they must be paid wages due to them within seven working days or at the end of the next pay period, whichever is sooner.  If the employee voluntarily quits, they must be paid in the usual manner all wages are paid and the next regular pay period.  An employee can request payment via mail instead of having to pick up a check from the employer. An employer can be liable for treble (triple) damages if it violates Arizona wage statutes as outlined in A.R.S. § 23-355.  If the employer can establish that there is a good faith dispute regarding the amount of unpaid wages it can establish an affirmative defense to these treble damages.

Arizona Termination Pitfalls

While Arizona is considered an employer friendly state, there are several areas an HR professional should be aware of as it relates to termination and discrimination:

·         Several municipalities including Phoenix, Tempe, Tucson, Sedona, and Flagstaff prohibit workplace discrimination based on sexual orientation and/or gender identity.

·         The Arizona Medical Marijuana Act has areas of concern for employers that drug test.  While the Act is not an affirmative defense to using marijuana on the job, even for medical conditions, it can preclude you from refusing to hire or terminating an employee for a failed drug test if the employer is made aware of the candidate/employee’s medical marijuana card holder status. There are exceptions to this for employers that could lose funding/licensing under federal law as well as other so-called “safety sensitive” positions.

·         Arizona courts have increased scrutiny and issued employee-friendly rulings regarding the scope and enforceability of confidentiality agreements and other restrictive covenants such as non-compete agreements.  Following what are considered industry best practices related to timeframes, geographic areas, and definition of confidential information is key.

·         Arizona is one of the most gun-friendly states in the country and its laws in an employment context reflect this fact.  Unless prohibited by state or federal law or if the vehicle is owned or leased by the employer, you cannot terminate or discipline an employee from lawfully carrying or storing a firearm in their vehicle so long as the vehicle is locked and the firearm is not visible (A.R.S. § 12-781).

When in doubt regarding your rights as an employer to termination in the state of Arizona, it is always a good idea to consult qualified counsel.  Arizona courts have protected and upheld employer’s rights regarding termination, at-will employment, and are generally employer friendly but this area of employment law is always changing.  Qualified counsel can help you avoid not only an expensive mistake but one that can cause even more damage from a public relations standpoint.

*A.R.S. stands for Arizona Revised Statutes

Matthew M. Kinney is the Executive Vice-President of Research and Development for BWSI.  He writes, speaks at conferences, and is lucky enough to consult with clients all over the country on issues from human resources, employment law, and payroll issues as well as his normal ‘day’ job as a Microsoft certified developer.

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