URGENT ACTION IS NEEDED TO BLOCK PASSAGE OF LD 553
On Friday, May 26, members of the Joint Standing Committee on Labor and Housing reconsidered their votes on LD 553, An Act to End At-Will Employment, a bill sponsored by Rep. Michael Sylvester (D-Portland). There now are TWO “ought to pass” recommendations coming out of the Labor committee:
CONTACT YOUR LEGISLATORS TODAY
AND URGE THEM TO VOTE “NO”
We are urging individual Maine employers to contact their legislators as soon as possible to voice their opposition to any version of LD 553. The Maine Legislature could vote on LD 553 as soon as Wednesday, June 2 when legislators are scheduled to reconvene.
The following organizations are asking you to contact your legislators
and urge their opposition to LD 553:
LD 553 would prohibit an employer with five or more employees from terminating the employment of an employee without just cause. The bill specifies an employer may – with limited exceptions – terminate an employee only after applying a written three-step progressive discipline policy, documenting each step in writing and providing written notice of termination in accordance with certain requirements. LD 553 also includes a private right for aggrieved employees to sue employers. The bill also eliminates references to “at-will employment” in current law.
In addition to information in the recent State Policy Update that the Maine State Chamber sent to its members last week, we have prepared this SAMPLE LETTER for you, using the following talking points.
Why Maine’s Business Community Strongly Opposes LD 553:
LD 553 proposes a seismic shift in decades of employment policy and law in Maine – restructuring Maine’s current at-will system – a system with no widespread reports of abuse regarding employment discharges to our knowledge.
LD 553 would impose a costly, burdensome, complicated, and litigious discipline and termination process for all but Maine’s smallest employers – the types of provisions that are part of job-security collective bargaining contracts negotiated between management and labor, where workers are unionized.
Even LD 553’s proposed amendment provides little to no clarity on critical issues and would open the door to increased litigation against employers. “Pay-to-settle” could become the new lament of employers.
The bill provides no guidance for business that use a seasonal workforce, meaning any seasonal layoffs would be subject to the “just cause” standard – and employers would be subject to litigation as a result of those seasonal layoffs. With no carve-outs for drops in business, seasonality, or even “acts of God,” what is an employer supposed to do if their business experiences a slow-down? What if there is another pandemic? Is an employer going to face increased legal exposure if another pandemic results in their business being shut down or dramatically reduced to the point that they need to terminate employees?
LD 553 would restrict employers’ broad latitude in managing their organizations, such as adjusting the size the workforce in response to a changing economy or due to issues that may arise in the workplace.
The present state of the law is that courts may not second-guess an employer’s legitimate business decisions regarding hiring and discharge of employees. This law would flip that presumption on its head. Courts would routinely be tasked with assessing business decisions and adjudicating terminations.
A variety of protections that limit an employer’s right to discharge already exists for employees under federal and Maine anti-discrimination laws. LD 553 is not designed to prevent discrimination; LD 553 is designed to provide job security for all workers and throw hurdles in front of an employer’s ability to effectively manage a workforce.
Forty-eight other states follow the at-will employment doctrine, but LD 553 would make Maine an outlier. LD 553 is a solution looking for a problem and begs more questions than it answers. It would dramatically increase the cost of doing business in Maine and friction between employers and employees.
Maine’s economic future depends on a healthy environment for business investment and job creation. In December 2019, just before the COVID-19 pandemic hit, the Governor’s 10-year Strategic Plan was released outlining plans to create a stronger economy. More recently, the Governor’s Economic Recovery Committee released its report on recovering from setbacks caused by the coronavirus pandemic. However, lobsters, mountains, lakes, coastline beauty and quality of life will not be strong enough to overcome the hostile environment toward jobs that LD 553 would create.
What Maine’s Business Community is Saying:
Maine State Chamber of Commerce: “Without question, passage of LD 553 would be catastrophic for Maine employers and our economy. Maine would be an outlier nationally, as only Montana uses ‘for cause’ as a termination standard. Such an egregious employment law would cripple our economic development efforts and put an end Governor Janet Mills” 10-year Economic Development Plan, as no business will want or need to locate here when they can choose 48 other states without the expense or litigation associated with the disaster that is LD 553.”
NFIB Maine: “The formality and paperwork required by LD 553 takes on extra importance – and cost – because a great many of these 16,000 small employers [5-49 employees] do not have a human resources staff member who could be trained in what would be required to properly follow the progressive disciplinary process and documentation contemplated by the legislation.
NFIB Maine: “Cost impacts on affected small employers will occur at a time many employers are attempting to recover from the sudden and several economic shockwaves that pulsed through the Maine economy over the past year. But even beyond this recovery period, LD 553 imposes costs and potential litigation burdens that will make it more difficult to operate a small business successfully in the future.”
Retail Association of Maine: “This will lead to significant litigation. Retailers continue to be focused on their operations, in the hopes of staying open, including safely providing goods and services while keeping their employees, customers, and the public safe.”
Maine Grocers & Food Producers Association: “There are significant concerns surrounding safety and liability risks.”
HospitalityMaine: “There is no doubt that hospitality businesses have withstood some of the worst economic impacts from the pandemic, lodging revenues off 35% and restaurants off 25%. It will take years to recover and pay off the accumulated debt brought on by the virus and the economic devastation left in its wake. Regardless of what the sponsor says, the way this bill is written would make it very difficult for a seasonal property that has outside dining areas that are closed after the fall season from ever laying someone off.”
HospitalityMaine: “We have tremendous concerns about the way egregious violations by an employee are handled in this proposed statute. Violations of statute are not always easy to define especially if law enforcement is not involved. It could put the onus on the employer to defend themselves after enforcing on their own, the very laws and regulations that may have been promulgated by this committee and the Legislature. Most of these issues are handled by the employer and not a police officer. Most hospitality business owners don’t have law degrees.”
Maine Tourism Association: “Does the progressive discipline policy apply when a business is forced to scale back or shutter operations due to natural disaster such as fire, flood, or a pandemic? What recourse does the employer have if there is a sustained lack of work or the work is seasonal? What is the remedy for a business that changes ownership? Is the new owner obligated to retain employees unless and until sufficient cause and notice are conveyed?”
Maine Hospital Association: “Given the very vulnerable state of our patients, we simply need the flexibility to address situations that are unacceptable with respect to patient safety and dignity without having to give multiple warnings and face retaliatory lawsuits.”
THANK YOU FOR TAKING ACTION TODAY
AND CONTACTING YOUR LEGISLATORS TO URGE THEM
TO VOTE ‘NO’ ON ANY VERSION OF LD 553!