Maine Legislature, Session 124, LD 1185
Committee: Labor
Sponsors: CRAVEN, CLARK, JACKSON, BERRY, BRYANT, BUTTERFIELD, STUCKEY, WAGNER, WEBSTER

Legislative Document 
No. 1185 
S.P.433 
In Senate, March 25,2009 
Ail Act To Require Cause for Employment Termination 
Referenc'e to the Committee on Labor suggested and ordered printed. 
Presented by Senator CRAVEN of Androscoggin. 
Cosponsored by Representative CLARK of Millinocket and 
9tf)(J~ 
JOY J. O'BRIEN 
Secretary of the Senate 
Senator: JACKSON of Aroostook, Representatives: BERRY of Bowdoinham, BRYANT of 
Windham, BUTTERFIELD of Bangor, RUSSELL ofPOliland, STUCKEY of Portland, 
WAGNER of Lewiston, WEBSTER of FreepOli. 
Prillled on rt!l.:y~lcti pilper 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1. 26 MRSA c. 37 is enacted to read: 
CHAPTER 37, 
MAINE EMPLOYMENT TERMl!NATJION ACt 
§3151. Definitions 
As used in this chapter, unless the context otherwise indicates, the following terms 
have the following meanings. 
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1. Employee. "Employee" means an individual who works fot hire, including an 
individual employed in a supervisory, managerial or confidential position, but not an 
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independent contractor. 
2. Employer. "Employer" means a person that has employed 5 or more employees 
for each working day in each of 20 or more calendar weeks in the 2-year period next 
preceding a termination or an employer's filing of a complaint pursuant to section 3155, 
subsection 3, 'excluding a parent, spouse, child or other member of the employer's 
immediate family or of the immediate family of an individual having a controUing 
interest in the employer. 
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3. Fringe benefit. 
"Fringe benefit" means vacation leave, sick leave, medical 
insurance plan, disability insurance plan, life insuranceplan, pension benefit plan or other 
benefit of economic value, to the extent the leave, plan or benefit is paid, for by the 
employer. ' 
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4. Good cause. "Good cause" means: 
A. . A reasonable basis related to an individual employee for termination of the 
employee's employment in view of relevant factors and circumstances, which may 
include the employee's duties, responsibilities, conduct on the job or otherwise, job 
performance and employment record; or 
B. The exercise of business judgment in good faith by the employer, including 
setting its economic or institutional goals and determining methods to achieve those 
goals, organizing or reorganizing operations, discontinuing, consoHdating or 
divesting operations or positions or parts of operations or positions', determining the 
size of its workforce and the nature of the positions filled by its workforce and 
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determining and changing standards of performance for positions. 
5. Pay. "Pay," as a noun, means hourly wages. or periodic salary,'including tips; 
regularly paid and nondiscretionary· commissions and bonuses and regularly paid 
overtime, but not fringe benefits. 
6. Person. '''Person'' means an individual colporation; business trust, estate, trust, 
partnership, association, joint venture or any other legal or coimnercial entity, excluding 
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goveinment or a governmental subdivision, agency or instrumentality. 
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7. Termination. "Tennination" means: 
A. A dismissal, including that resulting from the elimination of a position, of an 
employee by an employer;· 
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B. 
A layoff or suspension of an employee by an employer for more than 2 
. consecutive months; or 
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C. A quitting of employment or a retirement by an employee induced by an act or 
. omission of the employer, after notice to the employer of the act or omission without 
appropriate relief by· the employer, so intolerable that under the circumstances a 
reasonable individual would quit or retire. . 
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§3152. Shorttitlej scope 
1. Short title; effective date. This chapter may be known and cited as "the Maine 
EmplOyinent Termination Act." This chapter applies only to a termination that occurs 
after the effective date of this section. 
2. Exemptions. This chapter does not apply to a termination at the expiration of an 
express oral or written agreement of employment for a specified duration that was valid, 
subsisting and in effect on the effective date of this section ... 
3. Common-law rights displaced. Except as provided in subsection 5, this chapter 
displaces and· extinguishes all common-law rights and claims of a terminated employee 
against the employer, its officers, directors and employees that are based on the 
termination or on acts taken or statements made that are reasonably necessary to initiate 
or effect the termination if the employee's termination requires good cause under section 
3153, subsection 1, is subject to an agreement for severance pay under section 3154, 
subsection 1,· paragraph B or is permitted by the expiration of an agreement for a 
specified duration under 3154, subsection 1, paragraph C. 
'4. Common-law rights protected. An employee whose termination is not subject to 
section 3153, subsection 1 or section 3154, subsection 1, paragraph C and who is not a 
party to an agreement under section 3154, subsection 1, paragraph B retains all common-
law rights and claims. 
5. Rights and claims maintained. 
This chapter does not displace or extinguish 
rights or claims of a terminated employee against an employer arising under state or 
federal statutes or administrative rules or regulations having the force oflaw, a collective 
bargaining agreement between an employer and a -labor organization or an expr.ess oral or 
written agreement relating to employment that does not violate this chapter. Those rights 
and claims may not be asserted under this chapter, except as otherwise provided in this 
chapter. 
The existence or adjudication of those rights or claims does not limit the 
employee's rights or claims under this chapter, except as stated in section 3157, 
subsection 4. 
§3153. Prohibited terminations 
1. Termination; severance pay. Except as provided in subsection 2 and unless 
otherwise provided in an agreement for severance pay under section 3154, subsection 1, 
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paragraph B or for a specified duration under section 3154, subsection 1, paragraph C, an 
employer may not temlinate the employment of an eni.ployee without good cause. 
2. ,Application. 'Subsection 1 applies only to an employee who has been elnployed 
by the same employer for a total period of one 'year or more and has worked for the 
employer for at least 520 hours during the 26 weeks next preceding the tenmnation. A 
layoff or oilier break in service is not counted iil detennining whether an employee's, 
period of employment totals one year, but the employee is considered to be employed 
during paid vacations and other authorized leaves.' If an employee is rehired after a break 
in -service exceeding one year, not counting absences due to labor disputes or authorized 
leaves, the employee is considered to be newly hired. The 26-week period for pUl]Joses 
of this subsection does not include any week during which the employee was absent 
because of layoffs of one year or less, paid vacations, authorized leaves or labor disputes. 
§3154. Agreements between employer and employee 
1. Rights of employee. A right of an employee under tIlls chapter may not be 
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waived by agreement except as provided in this section. 
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A. By express written agreement, an employer and an employee 111ay provide that the 
employee's failure to meet specified business-related standards of perfonnance or the 
employee's c0111lmssion or Olmssion of specified business-related constitutes good 
cause for tennination in proceedings under this chapter. 
Those standards or 
, prohibitions are effective only if they have been consis'tently enforced and they have 
not been applied to a particular employee in a disparate manner without justification. 
If the agreement authorizes changes by the employer in the standards or prohibitions, 
the changes must be clearly communicated to the employee . 
B. By express written agreement, an employer and an employee may mutually waive 
the requirement of good cause for, tennination, if the employer agrees that, upon the 
tennination of the employee Jor any reason other than willful misconduct of the 
employee, the employer wiil provide severance pay in an amount equal to at least one 
month's pay for each period of employment totaling one year, up to a maximum total 
payment equal to 30 months' pay at the employee's rate of pay in effect immediately 
before the tennination .. The employer shall make the payment in 'a lump sum or in a 
series of monthly installments, none of which may be less than one month's pay plus 
interest on the principal balance. The lump sum payment must be made or payment 
of the monthly installments must begin within 30 days after the employee's 
tennination. 
An agreement under tills subsection constitutes a waiver by the 
employer and the employee of the right to civil trial, including jury trial, concerning 
disputes over the nature of the tennination and the employee's entitlement to 
severance pay and constitutes a stipulation by the parties that those disputes are 
subject to the procedures and remedies of this chapter. 
C. The requirement of good cause for temllnation does not apply to the tennination 
of an employee at the expiration of an express oral or written agreement' of 
employmerit for a specified duration related to the completion of a specified task, 
project, undertaking or assignment. If the employment continues after the expiration 
of the agreement, sectIon 3153 applies to its tennination unless the parties enter into a 
new express oral or written agreement under this subsection. 
The' period of 
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employment under an agreement described in this subsection counts toward the 
minimum periods of employment required by section 3153, subsection 2. 
D. An employer may provide substantive and procedural rights in addition to those 
provided by this chapter, either to one or more speCific employees by express oral or 
written agreement or to employees generally by a written personnel policy or 
statement, and may provide that those rights are enforceable under the procedures of 
this chapter. 
E. An employing person and an employee not otherwise subject to this chapter may 
. become subject to its provisions to the extent provided by express written agreement, 
in which case the employing person is deemed to be an employer. 
F. 
An agreement between an employer and an employee subject ·to this chapter 
imposes a duty of good faith in its formation, performance and enforcement. 
G. By express written agreement, an employer and an employee may settle at any 
time a dispute or claim arising under this chapter. 
H .. By express written agreement before or after a dispute or claim arises under this 
chapter, an employer and an employee may agree to private arbitration or other. 
alternative dispute resolution procedure for resolving the dispute or claim. 
I. By express written agreement after a dispute or claim arises under this chapter, an 
employer and an employee may agree to judicial resolution of the dispute or claim. 
J. The substantive provisions of this chapter apply under an agreement authorized by 
paragraphs Hand L 
§3155. Procedure and limitations 
1. 
Employee complaint and demand for arbitration. 
An employee whose 
employment is terminated may file a complaint and demand for arbitration under this. 
chapter with the Maine Labor Relations Board not later than 180 days after the effective 
date of the termination, the date of the breach of an agreerrient for severance pay under 
section 3154, subsection 1, paragraph B or the date the employee learns or should have 
learned of the facts forming the basis of the claim, whichever is latest. The time for filing 
is suspended while the employee is pursuing the employer's internal remedies and has not 
been notified in writing by the employer that the internal procedures have been 
concluded. Resort to an employer's internal procedures is nOl a condition for filing a 
comp~aint under this chapter. 
2. Reason for termination. 
Except when an employee quits, an employer, within 
business days after a temlination, shall mail or deliver to the terminated emplovee a 
written statement of the reasons for the termination and a copy of this. chapter or a 
summary approved by the Maine Labor Relations Board. 
3. Employer complaint and demand for arbitration. An employer may file a 
complaint and demand for arbitration under this chapter with the Maine Labor Relations 
Board to detennine whether then: is good cause for the tennination of a named employee. 
At least 15 business days before filing, the employer shall mail or deliver to the employee 
a written statement or the employer's intention to file and the factors alleged to constitute 
good cause for a tern1ination. 
4. Procedure. The Maine Labor Relations Board shall promptly mail or deliver to 
the respondent a copy of the complaint and ~emand for arbitration. Within 21 days after 
receipt of a complaint, the respondent must file an' answer with the Maine Labor 
Relations Board and· mail a copy of the answer to the complainant. The answer of a 
respondent employer must include a copy of the statement of the reasons for the 
termination furnished to the employee. 
. 5 .. Fees. When a complaint is filed, a complainant employee or employer shall pay a 
. filing fce established by the Maine Labor Relations Board in an amount not exceeding the 
maximum filing fee for a civil action in the Superior Courts of this State. The Maine 
Labor Relations Board may waive or defer payment of the filing fee upon a showin'g of 
the complainant employee's indigency. 
§3156. Arbitration; selecti~n and powers of arbitrator; hearings; burden of proof 
1. Arbitration. The Maine Labor Relations Board shall adopt procedural rules to 
regulate arbitration urider this chapter. 
2. Selection of arbitrators. The Maine Labor Relations Board shall adopt rules 
specifying the qualifications, method of selection and appointment of arbitrators. An 
arbitrator serving under tIns chapter exercises the authority of the State. 
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3. Discovery. SUbject to rules adopted by the Maine. Labor Relations Board, all 
forms of discovery provided by appliCable law, rule or regulation are available in the 
discretion of the arbitrator, who shall ensure there is no undue delay, expense or 
inconvenience.' Upon request, the employer shall provide the complainant or respondent 
employee a complete copy of the employee's personnel file. 
4. Representation. A party may be represented in arbitration by an attorney or other 
person authorized by law to represent an individual in arbitration. 
5. 
Burden. of proof. A complainant employee has the burden of proving that a 
termination was without good cause or that an employer breached an agreement for 
severance pay under section 3154, subsection 1, paragraph B. A complainant employer 
has the burden of proving that there is good cause for a termination. In all arbitrations, 
the employer shall present its case first unless the employee alleges that a quitting' or 
retirement was a termination within the meaning of section 3151, subsection 8, paragraph 
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6. 
Impermissible grounds. 
If an employee' establishes that a termination was 
motivated in part by impermissible grounds, the employer, to avoid liability, must 
establish by a preponderance of· the evidence that it . would have terminated the 
employment even in the absence of the impermissible grounds. 
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§3157. Awards 
1. 
Notice. Within 30 days after the close of an arbitration hearing or at a later time 
agreeable to the parties, the arbitrator shall mail or deliver to the pm1ies a written notice 
of award sustammg or dismissing the complaint, in whole or iil pm1, and specifving 
appropriate remedies, if any. 
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2. Awards for wrongful termination. An arbitrator may make one or more of the 
following awards for a tenllination in violation of this chapter: ' 
A. 
Reinstatement to the position of employment the employee held when 
employment was terminated or, if that is impnictical, to a comparable position;, 
,B. Full or partial back pay and reimbursement for lost fringe benefits, with, interest, 
reduced by interim earnings from eni.plovment elsewhere, benefits received and 
amounts that could have been received with reasonable diligence; 
13C. If reinstatement is not awarded, a lump-sum severance payment at the employee's, 
rate of pay in effect before the tennination,for a period not exceeding 36 months 
after the date of the award, together with the value of fringe benefits lost during that 
period, reduced by interim eamings and benefits from employment elsewhere, and 
taking into account such equitable considerations as the employee's length of service 
with the' employer and the reasons for the tennination; and , 
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D. Reasonable attorney's fees and costs. 
3. Awards for violation of severance agreement. An arbitrator may make either or 
both of the following awards for aviolation of an agreement for severance pay under 
section 3154, subsection 1, paragraph B: 
A. 
Enforcement of the severance pay and other applicable provisions of the 
agreement, with interest; and 
B. Reasonable attorney's fees and costs. , 
4. Conditions on awards. An arbitrator may not make an award except as provided 
in subsections 2 and 3. The arbitrator may not award damages for pain and suffering, 
emotional distress, defamation, fraud or other injury under the common law; punitive 
damages; compensatory damages; or any other monetary award. In making a monetary 
award under this section, the arbitrator shall reduce the award by the amount of any 
monetary award to the employee in another forum for the same conduct of the employer. 
In making an award, the arbitrator is subject to the rules applicable in courts ofrecord in 
this State: 
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5. 
Frivolous employee complaint. 
If an arbitrator dismisses an employee's 
complaint and finds it frivolous, unreasonable or without foundation, the arbitrator may 
award reasonable attorney's fees and costs to the prevailing employer. ' 
6. 
Sustain or dismiss employer complaint., An arbitrator' may sustain an 
employer's complaint and make an award declaring that there' is good cause for the 
tennination of a named employee. ' If the arbitrator dismisses the employer's complairit, 
the arbitrator may award reasonable attorney's fees and costs to the prevailing employee. 
§3158. Judicial review and enforcement 
1. Judicial review. Either party to an arbitration may seek vacation, modification or 
enforcement of the arbitrator's award in the Superior Court for the county in which the 
termination occurred or in which the employee resides. 
2. Timeliness. An application for vacation or modification must be filed within 90 
days after issuance of the arbitrator's award. An application for enforcement may be filed 
at any time after issuance of the arbitrator's award. 
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.. Court findings. The court may vacate or modify an arbitrator's award only if the 
court finds that: 
A. The award was procured by corruption, fraud or other improper means; 
B. There was evident partiality by the arbitrator or misconduct prejUdicing the rights 
of a party; 
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C. The arbitrator exceeded the powers of an arbitrator; 
D. The arbitrator committed a prejudicial error of law; or 
E: Another ground exists for vacating the award under the arbitration laws of this 
State. 
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4. Fees. In an application for vacation, modification or enforcement of an arbitrator's 
award, the court may award a prevailing employee reasonable attorney's fees and costs. 
In an application by an employee for vacation of an arbitrator's award, the court may 
award a prevailing employer reasonable attorney's fees and costs if the court finds the 
employee's application is frivolous, unreasonable or without foundation. 
§3159. Posting 
An employer shall post a copy of this chapter or a summary approved bithe Maine 
Labor Relations Board in a prominent place in the work area. An employer who violates 
this section is subject to the penalties set forth in section 704. 
§3160. Retaliation prohibited and civil action created 
An employer or other employing person may not oirectlyor indirectly take adverse 
action in retaliation against an individual for filing a complaint, giving testimony or 
otherwise lawfully participating in proceedings under this chapter, whether or not the 
individual is an employee having rights under tllls chapter. 
An employer or other 
employing person who violates this section is liable to the individual subjected to the 
adverse action in retaliation for damage caused by the action, punitive damages when 
appropriate and reasonable attorney's· fees. A separate civil action may be brought to 
enforce tIlls liability. The employer is also subject to applicable procedures and remedies 
provided by sections 3155. to 3158. 
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§3161. Savings and transitional provisions 
This chapter does not apply to the te!111ination of an employee within 6 months after 
the effective date of this chapter based upon the employee's refusal to enter into an 
agreement meeting 'the minimum standards of section 3154,' subsection 1, paragraph B, 
which the employer, in the exercise of good faith business judgment, may impose as a 
condition of continued employment. 
SUMMARY 
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This bill enacts the Maine Employm~nt Tennination Act.