What Is Wrongful Termination Law?

Losing your job is always difficult, but when it happens for an illegal reason, the stakes are even higher. When a termination crosses the line from legal to unlawful, the consequences extend far beyond losing a paycheck.

Even in an at-will employment setting, an employer cannot fire someone for an illegal reason. That includes discrimination, retaliation, a breach of contract, or a public policy violation. Each of these scenarios can form the basis of a legal claim under federal and state laws.

For employees, this may mean pursuing compensation for damages such as lost income, benefits, or emotional distress. For companies, it means facing severe employer liability. Knowing where the line is drawn and when it has been crossed is essential for protecting your future.

For personalized legal advice on wrongful termination claims, speak with an experienced wrongful termination lawyer.

What Is Considered Wrongful Termination?

An unlawful termination occurs when it violates federal or state law.

Though there are often feelings of unfairness or resentment after being terminated from employment, these are not enough for a wrongful termination claim. For an employee to have a wrongful termination claim, the employer’s actions must violate the law.

Actions that are considered illegal and qualify as a wrongful termination claim include:

• Discrimination
• Retaliation
• Breach of contract
• Public policy violations

Understanding At-Will Employment

Employees are generally presumed to be employed at will, which means your employer does not need good cause to fire you. They can terminate you at any time, and you can leave at any time.

At some point in your career, you’ve probably signed a document indicating that you understood it was at-will employment. Or you might have been given an employment handbook that lays out, in detail, that you can be let go for any reason. The at-will standard gives employers and employees the freedom to leave whenever the current employment arrangement no longer works for them.

Montana is the only state that requires “good cause” after a probation period. Another exception is unionized employees. There is a collective bargaining agreement that outlines the process for terminating an employee.

Are There Limits to At-Will Employment?

Yes. Even if you are an at-will employee, your termination can still violate the law or public policy. “At-will has limitations,” explains Twila S. White, an employment litigation attorney in Hermosa Beach, California, who represents employees in a wide range of employment law actions. “An employer cannot use an at-will employment provision to engage in unlawful conduct.”

What is unlawful conduct? “It means that the employer cannot subject the employee to discrimination, harassment, or retaliation based on a protected class,” says White.

“For example, if you engage in a protected activity as an employee, such as filing a complaint about discriminatory conduct in the workplace regarding race, age, gender, sexual harassment, pregnancy, or any of the other protected classes enumerated under anti-discrimination statutes, those activities are protected. An employer can’t point to an at-will provision to justify their discrimination or retaliation.”

Additionally, your employer may have promised or implied that your employment would continue indefinitely or for a set period of time unless there was good cause to end your relationship. If they terminate you in violation of an employment contract, you may have a breach of contract claim.

Discrimination and Wrongful Termination

While employers are generally free to end the employment relationship for any reason, they are not allowed to end it for illegal reasons, including discrimination.

Federal laws such as Title VII of the Civil Rights Act, the Americans with Disabilities Act (ADA), and the Age Discrimination in Employment Act (ADEA) together protect employees from being fired because of their membership in a protected class, including race, color, religion, sex (including pregnancy, sexual orientation, gender, and gender identity), national origin, age, disability, and genetic information.

Many states have anti-discrimination laws that often provide more robust legal protections for employees than their federal counterparts.

Breach of Contract in Wrongful Termination

If you have some kind of promise of continued employment for a specific term or a promise that you can only be fired for good cause, then you might not be considered an at-will employee.

These promises may be found explicitly in employment contracts or implied by your employer’s words or actions.

Written Promises

Written promises can take the form of an offer letter that promises continued employment or an employment contract that states you can only be fired for good cause.

If you have a written contract or similar document that makes these kinds of references, you might not actually be an at-will employee, and you may be able to enforce these promises in court through a breach of contract claim or other legal action.

Implied Promises

If your employer has said or done things that imply an employment agreement of continued employment, you might have an implied employment contract. These implied contracts can be found in promises of “permanent employment” or employee handbooks describing a disciplinary procedure that must be followed prior to termination.

However, these claims are rarely successful since they go against the basic statutory framework of at-will employment. The court analyzes the employer’s actions and statements to determine if they are enforceable promises or aspirational statements. Factors such as terminology used, enforceability, and clarity are considered. For example, statements like “will strive” or “believes in” are more likely to be considered aspirational than contractual.

Retaliation for Exercising Legal Rights

Employers cannot fire employees in retaliation for engaging in legally protected activities, such as:

• Filing a complaint with the human resources department about workplace sexual harassment or a hostile work environment
• Whistleblowing on the company’s illegal conduct or unsafe working conditions
• Union organizing or collective bargaining activity (NLRA)
• Reporting financial misconduct (Sarbanes-Oxley, Dodd-Frank)
• Requesting reasonable accommodations for a disability or religious practice
• Filing a workers’ compensation claim
• Filing a complaint about wage-and-hour violations

To succeed, you must prove that you engaged in a protected activity, that your employer knew about it, and that they fired you because of it.

Once an employee shows the causal link, the burden of proof shifts to the employer, who must show there was a legitimate reason for its actions. The employee then has an opportunity to rebut the employer’s claims.

Violations of Public Policy

Several employee actions are protected as a matter of public policy. It wouldn’t be good for society if people lost their jobs when facing events like the birth or adoption of a child, treatment for a serious medical condition, or caring for a family member with a serious illness.

It’s unlawful for an employer to terminate you for taking protected medical leave under the provisions of the FMLA or comparable state laws. Under the federal Family and Medical Leave Act (FMLA), employers with 50 or more employees must provide up to 12 weeks of unpaid, job-protected leave to eligible employees.

Broader protections as a matter of public policy include situations outside of family matters. Employees are protected when refusing to engage in an illegal activity or reporting employer misconduct (whistleblower protection). Their role is also to protect when they are performing a public duty, such as jury duty or military service.

These protections can have multiple layers. Federal statutes provide a base level of protection. States have their own protections that can increase the federal standard. However, some states do not recognize public policy as a wrongful discharge tort.

Possible Wrongful Termination Remedies

Employees who have a successful wrongful termination claim have several possible remedies.

One option is reinstatement of their position. However, many employees don’t want this option following litigation or disputes. Additional remedies include back pay, lost wages, and lost benefits.

Depending on the state, non-economic damages may be available. This involves determining a monetary value for the employee experiencing anxiety, depression, and other mental health issues. In some situations of severe and intentional actions, punitive damages may be available. These aren’t about the employee’s loss. Instead, they are meant to punish the employer.

Do I Need a Wrongful Termination Lawyer?

“Wrongful termination cases are really hard to litigate,” says White. “Usually, the employers, these big companies, get the largest law firms around to defend them, use scorched-earth litigation tactics, and run up the costs.”

Because of this, you don’t want to litigate these issues without help. A lawyer experienced with wrongful termination claims will know the applicable filing deadlines and legal process. Missing a deadline could prevent you from seeking recovery, making them vital to meet. Also, an employee may be required to follow a legal process depending on the type of claim. This could include filing a claim with the Equal Employment Opportunity Commission (EEOC) before filing a lawsuit.

Wrongful termination lawsuits tend to be complex legal matters. Legal representation can help gather the necessary evidence to make persuasive legal arguments. This could include gathering documents, interviewing witnesses, or arranging expert testimony.

How Are Legal Fees Covered in Wrongful Termination Cases?

How attorneys charge for their services can vary. It’s common for employment attorneys to charge a contingency fee in a wrongful termination case. In this fee structure, the lawyer gets paid a percentage of the client’s award amount.

States place statutory limits on the amount a lawyer can charge. This type of fee structure is helpful because many people do not have the financial resources to pay for a lawyer up front. However, it can place a strain on the law office.

“A lot of clients, particularly ones who have been terminated, don’t have the financial resources to pay for the costs along the way,” says White. “So, the lawyer ends up having to advance those costs. However, the advancement of costs carries a significant risk. That lawyer often has to turn away other cases and put their practice on hold.”

Some states, such as California, have enacted a fee-shifting arrangement to address this issue. “This incentivizes the employer to reach a settlement agreement in which they don’t necessarily admit wrongdoing but compensate the employee. It’s a way for both parties to resolve the issue and move on.”

However, sometimes employers won’t settle. “Instead, they decide to go to trial,” says White. “And if they lose at trial, they have to pay the attorney’s fees in addition to whatever the jury awards the plaintiff.”

Find the Right Attorney for Your Needs

Visit the Super Lawyers directory to find an employment lawyer with experience handling wrongful termination cases.