ARIZONA STATE SENATE
Forty-seventh Legislature, Second Regular Session
VETOED
FINAL AMENDED
FACT SHEET FOR S.B. 1370
civil rights; identity disclosure prohibited
(NOW: wrongful termination; cause of action)
Purpose
Designates when the cause of action for breach of an employment contract or damages for wrongful termination accrues.
Background
In 1996, the Legislature passed the Employment Protection Act, defining an employment relationship as contractual and severable at the pleasure of the employee or the employer, unless both have signed a written contract restricting the right to terminate the relationship (A.R.S. § 23-1501).
There are four general circumstances under which an employee has a claim against an employer for termination. For example, an employee has a claim against his or her employer if the employer terminates the employment in violation, or breach, of the contract (A.R.S. § 23-1501).
Lawsuits for breach of an oral or written employment contract, including contract actions based on handbooks or policy manuals without a specified time period to bring an action, must be commenced within one year after the cause of action accrues (A.R.S § 12-541). Lawsuits for damages for wrongful termination also must be commenced within one year after the cause of action accrues (A.R.S. § 12-541). Statute does not articulate when the cause of action accrues.
There is no anticipated fiscal impact associated with this legislation.
Provisions
1. Specifies that the cause of action for breach of an oral or written employment contract accrues at the time the employer communicates to the employee the employer’s decision to take the action that constituted the breach.
2. Specifies that the cause of action for damages for wrongful termination accrues at the time the employer communicates to the employee the employee’s termination.
3. Intends that justice is better served when employment claims begin promptly, and because the courts have not applied the statute of limitations uniformly, it is necessary to clarify the one-year time period for commencing an action for wrongful termination or breach of contract.
4. Makes technical changes.
5. Becomes effective on the general effective date.
Amendments Adopted by Committee
· Adopted the strike-everything amendment.
Amendments Adopted by Committee of the Whole
· Clarifies that the employer must communicate to the employee the employer’s decision.
Governor’s Veto Message
The Governor indicates in her veto message that employees who are wrongfully terminated often do not discover the wrongful nature of their termination until several weeks or months after their termination. The Governor also indicates that in Arizona, the general rule is that tort actions do not accrue until the plaintiff discovers the wrongful nature of the defendant’s action, and there is no reason for employment termination law to be different.
Senate Action House Action
JUD 2/13/06 DPA/SE 5-2-1-0 JUD 3/30/06 DP 7-0-0-2
3rd Read 3/14/06 19-10-0-0-1 3rd Read 4/17/06 34-21-5
Vetoed by the Governor 4/24/06
Prepared by Senate Research
May 3, 2006
JE/LB/ac