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Wrongful Termination Law



What is wrongful termination law? (also known as Wrongful Discharge or Wrongful Dismissal) refers to the various state and federal laws which protect employees from being illegally and wrongfully dismissed from employment. It is a part of the practice of Employment Law and is often closely related to Employment Discrimination law.

Almost all states operate under the “employment at will” doctrine, which is most simply described as the right of an employer to fire an employee for no reason and the right of an employee to quit for no reason. Despite the fact that most U.S. states operate under this “at will” employment doctrine, there are circumstances in which employees have legal recourse for being terminated by showing that the termination was wrongful due to a violation of their legal rights. Though, a common misconception is that an employee can sue for wrongful termination simply because he/she was treated unfairly, this alone, is not sufficient cause.

Sufficient legal cause to file suit for Wrongful Termination may include the following situations.

- Discrimination: basing termination solely on a class trait that is legally protected, such as age, race or nationality, gender, sexual orientation, disability, religion, etc.;

- Retaliation: termination as a way of “getting back” at the employee for reporting the employer for dishonest, illegal or wrongful activity, for filing a legal claim, or for refusing to act or behave in manner inconsistent with public policy (i.e. whistle blowing, filing a workers’ compensation claim or refusing sexual advances);

- Character Defamation: termination for a non-existent reason alleged by the employer, which defamedthe employee, by use of false and malicious statements that prohibited or lessened the employee’s chances of securing other employement;

- Breach of Explicit Contract: termination without good cause when there is a written employment contract which contradicts the default at will status and there is no “escape clause” or if one exists, the termination does not meet the conditions of the clause;

- Breach of Implied Contract: termination without good cause when an implied contract or “implied-in-fact” contract exists, as determined by law on a case-by-case basis;

- Breach of Covenant of Good Faith and Fair Dealing: termination of an employee to avoid dealing with the worker in good faith and/or in a fair and equitable, honest and ethical manner;

- Constructive Discharge: “effective” termination, which occurs when the employee quits due to action or inaction by the employer which made working conditions intolerable, as recognized by any reasonable employee; and

- Fraud: termination based on intentional fraud, when the employer sought to purposefully deceive the employee and based on this deception, the employee was in some way harmed.

Public policy violations are viewed by most states as cause for wrongful termination, which overrides the at will doctrine. The idea that an act is against public policy may be sustained when the reasons for the terminations are viewed by society to be illegitimate or morally and ethically abhorrent. These violations include retaliation for filing a workers’ compensation claim or for a whistle blowing act; as well as discharging an employee who refused to do something illegal, or exercised a legal right against the employer’s wishes; taking time off work to serve on a jury or to vote, and even for serving in the National Guard. To allege a public policy violation in a wrongful termination claim, it is usually required that there be a statute addressing this in the applicable jurisdiction.

With regards to implied employment contracts, this can occur when an employer has made promises of employment for a set period of time, or even permanent employment. The use of an employee handbook which details specific steps for progressive disciplinary action is often called into play when trying to prove an implied employment contract. However, many employers who make use of these types of employment manuals have their employees sign a statement that disavows any formal contract. This will make any alleged implied contract ineffective.

The good faith and fair dealing covenant is not recognized by all states. In the states that do recognize this covenant, it is generally not acceptable for an employer to fire an employee without good cause, simply to avoid fulfilling guarantees of promotions, raises, commissions and/or bonuses owed to the employee. Constructive discharge and defamation of character are also viewed as breaches of the covenant of good faith and fair dealings. Claims based on this, however, are hard to prove and must show strong cause to persevere in a wrongful termination claim.

The penalties incurred by an employer when an employee has a successful wrongful termination claim, vary, dependent upon the jurisdiction. In some states they face a legal penalty prescribed by statute and in others the employer may be ordered to reinstate the dismissed employee and can be held liable for the worker’s lost wages, expenses and even punitive damages. Jurisdiction also determines how these claims must be filed, either with a government agency tasked with enforcing labor laws or by way of a civil lawsuit. With regards to discrimination violations, the employee generally must file the charge first with the Equal Employment Opportunity Commission (state and/or federal level) before being allowed to pursue his/her claim in court.

Because of the prevalence of at will employment and the fact that laws addressing wrongful termination can vary greatly from state to state, when an employee believes he/she has been terminated illegally, it is advisable to speak to an Employment Law attorney knowledgeable in Wrongful Termination law, to determine if the claim has merit in his/her jurisdiction.

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