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A step down in the rank or job title of an employee is called demotion. Demotion generally is followed by a pay cut, lesser benefits and company privileges. Many employers use demotion as a tool to retain employees during times where there is a production cut, profitability is down, etc. so that they do not have to terminate them. However, employees may feel that it is unfair, which in turn demoralizes them. Employees would want to understand their rights and the laws governing demotion during such situations. Below are a few questions that have been answered regarding demotion: Q. Legally, what options do at-will employees have if they have to choose between demotion and termination?
Unless and until the employer does not discriminate based on race, gender, age, religion, or disability, an employer may terminate, demote, reduce the benefits provided, etc. without giving a reason to an at-will employee. Legally, an at-will employee would not be able to do anything unless one has evidence to prove that the employer showed discrimination while taking a decision. However, one may speak to the employer and verify the reason as to why a specific person was chosen for a demotion. One may also try to come to an agreement that may be suitable to both the employee and the employer. If nothing can be worked out, then one may take the demotion or look for another job. Q. If an employee convinces the company to terminate him/her instead of a demotion; can that employee claim unemployment benefits?
One is not eligible for unemployment benefits just because he/she was terminated. The State Unemployment Commission may review the situation and come to a conclusion. They would analyze considering factors such as the profession, industry, terms of pay, etc. and if the demotion that was offered was in accordance with the local economic standards. If they feel that the demotion was justified; then one would not be eligible for unemployment benefits (be it voluntary or involuntary termination). On the contrary, if the employee is able to prove that the demotion was not justified and had to quit for a good reason; then one may be eligible for unemployment benefits. In the event that the employer terminates the employment, the employer would need to prove that the demotion that was offered was justified. Q. Can the following be considered as agreeable disciplinary action: verbal abuse, public humiliation, demotion and loss of pay?
In the event that an employee has a written contract that states that the employer, without a valid reason, cannot take any kind of action; then the employee may be able to sue the employer for violating the terms of the contract. If one is able to prove that the employer discriminated based on race, gender, age, religion or disability, then a complaint may be filed with the EEOC. EEOC would investigate the complaint and refer the case to the court if it is found valid. However, if one is an at-will employee, then the employee may not have any legal stand to file a complaint. Q. In the state of Maryland, if an employee is demoted and that employee files an appeal against the demotion, can the employer terminate him/her?
In the absence of a written employment agreement, in the state of Maryland, the employer can decide the terms of employment. The decisions may be with regards to promotion, termination or an appeal process (if any). If one is an at-will employee, then one can be terminated with any notice or reason and it allows both the employer and the employee to end the work relationship. However, if the employee is discriminated based on race, age, gender, religion, or disability, then the employer would have violated the workplace discrimination laws. Q. If a previous employee is threatening to file a case, can the employer demote an at-will employee to evade litigation?
Absence of an employee contract would mean that the employee is an at-will employee whom the employer may terminate, demote or promote without providing a reason or notice. However, this decision should not be based on the employee’s race, age, gender, religion or disability. Some exceptions to at-will employment are: employment contract, public or company policy. Violation of any of these exceptions can be reason enough to file a lawsuit. One could hire the services of an employment lawyer to discuss the options that one may have with regards to the situation mentioned above. An employee’s morale would be hurt and the employee would be de-motivated if he/she were to be demoted. This may lead to employees wanting to know their legal rights to contest this. One may consult an employment lawyer in times and get more information about demotion.
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