The Michigan Court of Appeals recently issued an opinion that will make employers think twice about resignation procedures for employees. In Robbins v. Sault Ste. Marie Tribe of Chippewa Indians (Click here for a PDF of the case), an employee had a written clause in her contract that she would receive two years’ salary if she were fired. The employee gave the employer two weeks notice of her resignation. After giving her employer notice, but before she could serve those two weeks, she was fired. The employer did not believe she should be entitled to the two years’ salary since she had already given her resignation notice. The Court disagreed with the employer and ruled in favor of the employee, and awarded her $204,576 in severance pay. In its decision the Court stated, “Where an employer terminates employment prior to the effective date of resignation, in the absence of a contractual provision allowing the employer to do so, he employment was terminated by the employer, not by the employee’s resignation.”
In order to avoid situations similar to the one above, employers should do one of the following: (1) Allow the employee to work through the resignation date; (2) Continue to pay the employee through the resignation date, but tell them that they do not need to actively work during this period; or (3) Add provisions to employment contracts or the employee handbook stating that after receiving an employee’s notice of resignation with a future effective date, the employer may accept that resignation effective immediately.
This article was written by Mark S. Demorest, Managing Member of Demorest Law Firm.
