Question: One of my employees recently gave his two-weeks’ notice after informing me that he is going to work for a competitor. Do I have to let him continue to work for two more weeks or can I request that he leave immediately?
Answer: It depends. If the employee is an at-will employee, you can generally let him go at any time, with or without notice, for no reason at all or for any reason that is not unlawful. However, if the employment relationship is not at-will, you may be required to allow him to work through the end of the notice period. Before sending the employee home with his final paycheck, it is imperative to determine whether he is at-will.
While California’s Labor Code contains a presumption that all employees are employed at-will, there are exceptions to this law. Many public-sector employees have certain due process protections. Union employees are covered by collective bargaining agreements that may dictate the termination process. Some employees have written employment contracts requiring pre-termination notice or “good cause” for termination. If an employer has, for example, made promises of continued employment, such promises could overcome the presumption of employment at-will. To determine whether an employee is at-will, an employer should review its policies, any collective bargaining agreements, and the employee’s employment contract, if any. In more complex cases, consultation with an experienced employment attorney may be necessary.
If you determine that the employee is an at-will employee, you generally have three options:
• Allow the employee to work through the end of the notice period;
• Dismiss him immediately; or
• Accept the resignation effective at the end of the notice period, but continue to pay the employee through the originally noticed resignation date, and inform him that he is not to report to work.
Each of these options carries important consequences. While letting the employee finish out the notice period may be the best way to ensure a smooth transition, this is not always the case. For example, since this employee is leaving to work for a competitor, continuing to employ him during the notice period might provide him with the additional time to obtain confidential information from your business or recruit your valuable employees or clients to leave your business. Therefore, you may want to ensure that the employee leaves the workplace as soon as possible, whether you make the termination effective immediately or pay him through the notice period.
You should also consider that not paying the employee through the notice period will effectively turn a voluntary quit into an involuntary termination from an unemployment insurance (UI) eligibility standpoint, likely allowing the departing employee to collect unemployment benefits to which he may not otherwise be entitled. This could have a negative effect on your UI reserve account and cause your UI rates to go up. Paying the employee through his originally noticed resignation date will typically prevent this result.
You should also consider protecting your company’s confidential information. In California an employer cannot prevent an employee from working for a competitor. However, it can protect its proprietary information by having employees sign confidentiality agreements that are effective during and after the individual’s employment. If this employee has signed such an agreement, you should give him a copy and remind him of his obligations under the agreement.