Can an employer coerceanemployeeinto taking early retirement?
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Can an employer coerceanemployeeinto taking early retirement?
My employer is approaching managers that have no previous performance issues and informing them that if they don’t take the early out package that is being offered, they will be put on a performance improvement plan (of which most employees don’t get out of and end up being terminated). Is that legal?
Asked on June 18, 2011 under Employment Labor Law, Minnesota
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 12 years ago | Contributor
If there is no employment contract (including a union agreement, if applicable) and no discrimination against a protected category (e.g. against people on the basis of race, religion, age over 40, disability, or sex), then yes, this would be legal. That's because without some employment contract, the managers are "employees at will"; employees at will may be disciplined, demoted, or terminated at will--at any time, for any reason. So the employer could simply fire these managers outright if it wanted to, which means it could also take lesser steps--like putting them on that performance improvement plan while giving them the option of an early retirement. The exception, as noted above, would be if there was illegal discrimination against these particular managers; employers may not discriminate against protected categories.
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