When Firing Becomes Unlawful

Though the at-will employment doctrine may seem like blanket protection for employers when it comes to terminating a worker, there are exceptions under state and federal law. 

“The two main categories of wrongful termination are protected status and anti-retaliation,” says Deborah Brouwer, labor and employment law partner at Nemeth Bonnette Brouwer in Detroit. “Michigan’s classic at-will employment default position is limited based on the employee’s protected status. If [an employer] acts based on a protected status, there may be an accusation of wrongful termination.”

Retaliatory conduct can be triggered by terminating an employee after something as notable as whistleblowing or as minor as an inquiry about wages. “Employers cannot terminate employees for retaliation as it relates to antidiscrimination statutes and cannot retaliate against an employee for exercising rights under other statutes,” says Jason Shinn, employment law managing attorney at Shinn Legal in Keego Harbor. 

First Things First: Is There a Contract?

When approached by an employer about a wrongful termination claim, Shinn immediately asks, “Is there an employment contract?” Though they are rare, Shinn says any such contract will generally dictate the terms of the claim.

An employment contract that “discusses things like salary or contains a non-compete clause does not necessarily negate at-will status,” Brouwer says.

On the other hand, employers may add limiting termination terms for high-level or specialized employees. “It can be beneficial to create contracts that give these employees job assurances,” Brouwer adds. The employees will likely feel more comfortable working for an employer who cannot fire them on a whim. 

The Basis for Discrimination

“When a termination is motivated by or involves protected categories such as race, sex, religion, gender, age, national origin or disability, an employer could be held liable for discrimination,” says Shinn. 

In addition to these federally protected classes, state antidiscrimination law recently extended to protect gender identity and sexual orientation. “In Michigan, protections also extend to height and weight,” Shinn adds. “Employers may be surprised by that.”

The burden of proof in these cases is threefold. “Since direct evidence of discrimination is rarely available, courts often rely on the McDonnell Douglas burden-shifting test,” says Shinn. Under this test, the employee establishes the occurrence of discrimination; then the employer shows a non-discriminatory reason for the firing; and the burden shifts back to the employee to demonstrate the employer’s non-discriminatory reason was pretextual. Finally, some cases call for a mixed-motives test. 

Resist Retaliation

Employees often accuse employers of treating them differently after they’ve lodged a complaint, says Shinn. “The two most obvious retaliatory provisions are a MIOSHA [Michigan Occupational Safety and Health Administration] complaint and a workers’ compensation claim.” 

Naturally, an employer will be upset if accused of improper behavior, but hurt feelings must be kept in check because an employee cannot lawfully be fired for exercising a right. “That is the time to be very careful,” Brouwer says. “Let the investigation play out.” 

Fair Reasons for Termination

Of course, poor or failed performance is a legitimate reason to terminate employment. “Violation of a specific work rule, such as ‘Don’t sleep on the job,’ is pretty straightforward,” Brouwer says. “But simply saying, ‘You’re not doing your job the way we want you to’ is harder to establish.”

Economic reasons and business necessity also provide lawful bases for termination, Shinn says. But cuts must always be made in a “consistent, non-discriminatory way,” he adds.

Employees who engage in violent misconduct, criminal behavior or who discriminate against a co-worker may all be legally terminated. “An employer needs to limit the risk [that individual] poses to other employees,” says Shinn. 

But before you fire an employee, Brouwer says, take necessary steps to address their conduct and/or performance. “When you discharge an employee, that employee should not be surprised. That should not be the first time they hear about the issue,” she says. 

Employers should conduct formal and informal performance reviews alerting the employee to what is expected. Known deficiencies can be fixed and performance can be improved. “It costs a lot of money to hire and train employees. If they fail because of performance issues, you need to go through all that expense again,” Brouwer says.

Defense Can Be the Best Offense

A company’s supervisors and human resources department must act professionally: “A point person who knows enough to ask the right questions, identify potential red flags and manage those risks,” Shinn says.

Employers must “apply the same standards evenly to all employees, or risk entering a minefield,” says Brouwer. “Regular company training sessions that cover bullying, civility and non-harassment can help avoid problems from coming up in the first place.” 

Employment law training seminars can help companies avoid the wrongful termination danger zone, Shinn says. “But not every termination is going to be risk free,” he adds. 

“Counseling, training and warnings put the employer in the best position to defeat a claim of wrongful termination,” says Brouwer.