Job Termination and Wrongful Discharge

Protecting Your Legal Rights

Your work is your lifeblood. It helps you provide for your loved ones, keep a roof over your head, and put food on your table. In almost all states, though, the vast majority of employment is “at will,” which means either party can terminate the employment relationship at any time and for any reason, with a few exceptions. (Common exceptions to “at will” employment are public sector and unionized jobs.) There are circumstances where the loss of a job can constitute “wrongful termination,” giving you the right to file a legal claim for damages.

Employee Termination for Cause

Your employer can almost always terminate the employment relationship for cause. That may include:

• Engaging in illegal or wrongful acts, or in conduct that violates the terms of an employment contract
• Poor performance
• Excessive absenteeism or tardiness

As a general rule, when you’re fired for some type of wrongful act in the workplace, or any violation of company policy, you won’t be able to collect unemployment. You will have a right to your final paycheck, and you may be able to retain some benefits, though you may have to pay for them yourself. If you’re employed under the terms of a valid employment agreement, the terms of that contract will dictate your rights.

What Is Wrongful Termination?

Under the legal concept of “at will” employment, your employer can fire you or lay you off at any time and for any reason not specifically prohibited by law. State and federal law makes certain terminations “wrongful”, meaning that the terminated employee has the right to bring a legal claim against the employer. A termination is “wrongful” if it is:

• in violation of the terms of a valid and enforceable employment contract;
• contrary to law, such as state or federal anti-discrimination statutes or laws banning retaliatory conduct, such as whistleblower statutes; or
• contrary to public policy, such as termination for serving on jury duty, requesting leave under the Family and Medical Leave Act (FMLA), serving in the armed forces, refusing to disregard safety procedures, or refusing to participate in other unethical or illegal acts.

As a general rule, an employer is not required to provide a reason for termination of employment—no state or federal law mandates this. However, if you have a valid employment contract, its terms may require a stated reason for discontinuation of employment.

Laws That Protect Employees from Wrongful Termination

Federal law prohibits certain types of firings, including terminations based on factors such as race, gender, age, color, national origin, religion, gender identity, and sexual orientation. Laws that protect workers from wrongful discharge include the following:

• Title VII of the Civil Rights Act of 1964 prevents firings based on gender, race, color, religion, or national origin.
• The Americans With Disabilities Act (ADA) bans termination because of certain handicaps.
• The Age Discrimination in Employment Act (ADEA) protects the rights of workers aged 40 and over.

Whistleblower protection provisions in a range of federal statutes also prevent termination of employees who report illegal activity by their employers or who participate in investigation of such activity. Such protection is contained in The Clean Air Act, The Safe Drinking Water Act, the Water Pollution Control Act, the Toxic Substance Control Act, and the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA).

Express vs. Constructive Termination

Termination of employment may be either express or constructive. With express termination, the employer notifies the employer, either verbally or in writing, of the end of the 1employment relationship.

When an employer engages in or allows activities or behavior that make the work environment intolerable, thereby causing a worker to choose to end their employment, such termination is referred to as “constructive termination.” In that situation, the employee may have a claim for wrongful termination and might be able to recover compensation for losses.

How Voluntary Termination Works

A worker who quits generally is not eligible for unemployment benefits, unless they can prove constructive termination, i.e., that the employer engaged in actions, such as harassment or discrimination, that made work intolerable. An employee who quits has a right to a final paycheck, and may have access to benefits as well, but may have to pay for them.

How Involuntary Termination Works

When you are fired from a job, and there are no allegations of wrongful conduct on your part, you have a right to seek benefits through your state’s unemployment compensation program. You can also keep your employer-provided healthcare plan for up to 18 months under a federal law known as COBRA, though you will have to pay the costs of the insurance.

If you believe you were involuntarily terminated in violation of a valid employment contract, you may be able to file a lawsuit in court alleging breach of contract.

If you are wrongfully terminated in violation of state or federal law, or in contravention of public policy, you must first notify the Equal Employment Opportunity Commission (EEOC). The EEOC will initially encourage you to try to mediate your dispute, though you are not required to do so. If you choose not to mediate, the EEOC will investigate your claim. Based on that investigation, the EEOC may either find that your employer acted wrongfully and impose sanctions or conclude that there is insufficient evidence of such conduct. If the EEOC chooses not to take action against your employer, you will receive a “right to sue” letter and can bring legal action in court.

Myths about Wrongful Termination

Wrongful termination can often be a muddy and confusing area of the law, causing many misunderstandings. Some common myths include:

• Any unreasonable termination will be deemed wrongful—A termination is only wrongful if it violates an employment contract or is contrary to law or public policy. If you are employed “at will,” any other reason is permissible. Your employer can terminate you because you spend too much time looking at your phone, or even because of the color of your shirt.
• To have a claim for breach of an employment contract, there must be an express written agreement—Employment contracts can be express or implied. An employment agreement may be implied by the terms of an employee policy manual, by the actual words of an employer, or by evidence that others in a similar position were considered to be under contract.
• It’s only wrongful termination if your employer fires you—As noted above, you may have a right to bring legal action for constructive termination if your employer allowed, encouraged, condoned, or engaged in actions that created a hostile or intolerable environment, causing you to leave voluntarily.
• All workers over a certain age are protected from termination—The ADEA applies only if you work a certain amount of time per year, and it only applies to employers with more than 20 employees. In addition, you can be terminated for cause, regardless of your age.

How to File a Claim for Wrongful Discharge

If you are wrongfully terminated in violation of an employment contract, you can file a lawsuit in court, alleging breach of contract. If you are fired in violation of law or public policy, you must first notify the EEOC. You will only be allowed to file a lawsuit if the EEOC chooses not to impose sanctions and issues you a “right to sue” letter.

Information to Save When You Have Been Fired

Regardless of whether you are seeking a new job voluntarily or because your employment was terminated, copies of the following documents will help you protect your future interests and employment potential:

• Termination Contract. If applicable, keep a copy of the termination or employment severance contract you signed. Try to refrain from signing one if you have questions that might be answered best by an attorney. You want to avoid unintentionally jeopardizing any of your future rights.
• Documentation of the circumstances under which you were fired. This includes who you spoke to, what they said, and any accompanying conduct by both parties. It is helpful to write emails to preserve a record; be sure to make copies of any relevant emails as well.
• Job Description. Keep a written copy of your starting job description and an updated copy if it was modified before your departure.
• Departure Statement. Keep any written and signed statement describing the reasons for your departure. This is important because it allows you to determine:
  • whether you will be granted unemployment benefits;
  • what future employers will be told about the reason for your departure; and
  • which employee benefits you may be entitled to upon leaving, including healthcare coverage, accrued employee leave, and funds deposited in a 401(k), pension, or other program.
• Employee Handbook. Keep a copy of the employee handbook and any relevant materials such as memos, brochures, orientation materials, or any written evaluations of your work. However, it is important to be extremely careful when taking documents from your employer, especially with regard to anything that is designated as confidential or for internal use only.
• Employment Contract. Keep a copy of your employment contract, if applicable, previously signed and dated by both you and your employer. If you were given an employment contract upon accepting the job, the terms often will define the kind of reasons your employer can use to fire you. Some employment contracts leave the reasoning section open-ended and simply say that the employee can be fired “for cause,” while others mimic the relevant state law of firing. Typically, such a clause will be construed to mean that the employer needs a legitimate business reason to fire the employee; however, this varies from state to state.
• Noncompete Covenant. Keep copies of any covenants not to compete. These include documents or contracts stating that you will not seek similar employment for a stated time period and will not compete in a specific manner for a set time period.
• Personnel Material. Make copies of all materials in your personnel file that your employer will release to you. If allowed, and it’s not confidential or for internal use only, be sure to obtain documentation concerning:
  • your paid wages,
  • employee benefits,
  • promotions,
  • job evaluations,
  • any signed statements made by your supervisors or coworkers, and
  • bonuses paid or promised.
• Memos and Emails. Make copies of any memos or emails sent to you or by you during your employment that your employer has not forbidden you to take under a claim of confidentiality. You may need an attorney to help you determine what documents you can and cannot take with you in this regard. Your goal is to protect yourself and have ample evidence to back up any of your future legal claims should your former employer try to deal unfairly with you.
• Work Journal. If you sense that something has gone awry in your relationship with your employer, it can also be helpful to keep a journal that records significant employment events. For example, document performance reviews, commendations, reprimands, salary changes, or even less formal comments of approval or disapproval. In any event, always record the date, time, and location as well as who was present at each event. Even if you do not wish to challenge the legality of the firing, you may need to show that you were fired for reasons that did not involve your misconduct, in which case, detailed documentation can be helpful.