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What Is Considered Wrongful Termination?
Learn what wrongful termination is and what laws protect employees from illegal termination.
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As an employer, you may find yourself in the uncomfortable position of terminating an employee. Every state allows at-will employment — the ability to terminate an employee regardless of the cause. But, employers must be diligent about their process and reason for termination. Even at-will employers can’t fire employees in certain situations; some reasons for termination are illegal.
If an employee feels they have been a victim of wrongful termination, they may attempt to file a lawsuit against you. To prevent this from happening, employers should understand the illegal reasons to fire someone.
What is wrongful termination?
Wrongful termination happens when an employer fires an employee for an illegal reason. Although most terminated employees probably feel as though they were wrongfully let go, federal and state laws determine which reasons are unlawful. For example, it may be legal to terminate an employee for poor performance in a state that allows at-will termination. However, anti-discrimination laws make it illegal to terminate an employee based on their disability.
To reduce the potential for wrongful termination, always follow your organization’s internal procedures and policies for termination. Adhering to established protocols can help ensure consistency and fairness in the termination process.
In this interview, labor and employment attorney Bryn Goodman explains what every business owner needs to know about wrongful termination.
What are 10 illegal reasons to fire an employee?
Several actions can lead to wrongful termination. Most of them involve violating the employment laws and regulations set forth by federal and state governments. If you are considering terminating an employee, ensure it is not for any of the following reasons:
1. Discrimination
Many wrongful-discharge claims happen when an employee is (or believes they have been) fired for an illegal, discriminatory reason. Several federal and state laws make it illegal to discriminate against and terminate an employee based on a protected category. This can include race, religion, color, sexual orientation, gender or gender identity, national origin, age, disability, or pregnancy.
2. Retaliation
Andrew Russell, partner at McGuireWoods, said another common basis for wrongful-termination claims occurs when an employer illegally retaliates against an employee for a protected activity that an employee might take.
“For example, an employee may report a potential safety violation, file a complaint about an underpayment of wages or report that they have been illegally harassed by a supervisor,” Russell told business.com. “This is all protected activity, and an employer may not fire an employee in retaliation for engaging in such activity.”
Some of the most common reasons for retaliation are when an employee:
- Opposes or reports discrimination or harassment
- Inquires about pay discrepancies
- Requests reasonable accommodations
- Files a complaint or grievance
- Reports illegal activities
- Participates in an investigation
3. Whistleblowing
Another illegal reason to terminate an employee is for whistleblowing. If your workplace is responsible for violating a health or safety regulation as mandated by the Occupational Safety and Health Administration (OSHA), you can’t terminate an employee for reporting you. Employees have the right to a safe work environment and can’t be fired for reporting hazardous workspaces.
4. Law violations
In most states, it is illegal to fire an employee because of your criminal activity. For example, it would be unlawful to terminate an employee for refusing to be complicit in breaking a law or reporting you for breaking a law.
5. Employment contract violations
It is illegal to fire an employee for any reason contrary to what is dictated in their contract. For example, written contracts may list why or how the employee may be terminated. Employees with implied contracts may be fired only for “good cause.” That’s why it’s essential to review employment contracts with a lawyer before terminating an employee.
6. Requests for protected employment leave
You may be entitled to terminate an employee for requesting employment leave. But, it’s illegal to terminate an employee for requesting any employment leave protected by laws such as the Family and Medical Leave Act (FMLA). Many states have additional paid and unpaid leave laws for things like sick, parental and military leave. So, it’s important to check your state leave laws as well.
7. Requests for reasonable accommodations
It is illegal to terminate an employee for requesting reasonable accommodations for a protected disability. For example, if an employee’s disability status changes, they are within their legal right to request reasonable accommodations — and you are legally required to provide them. The key word here being “reasonable.”
8. Public policy violations
It is illegal to terminate an employee for fulfilling their civic duty, such as attending jury duty. This right is federally protected by the Jury Systems Improvement Act (JSIA). It prohibits employers from terminating or committing other disciplinary actions against workers who are called for jury duty.
Another civic duty that may be protected is voting. Employers are not federally responsible for allowing employees to take time off to vote. However, many states and local ordinances mandate voting leave time, which you may not terminate employees from using.
9. Refusal to take a lie detector test
You cannot require an employee to take a lie detector test as a condition of keeping their job. The exceptions to this rule pertain to specific roles and scenarios. Government employers are allowed to use polygraph tests to screen hires. Similarly, pharmaceutical manufacturing and security service employers can get exceptions that allow them to require polygraph tests. The final exception applies to circumstances that result in “specific economic loss or injury to the employer,” according to the Employee Polygraph Protection Act.
10. Citizenship
It is illegal to fire a person based on their citizenship or place of birth. This is classified as a form of discrimination barred by federal law. Plus, it’s a violation of several anti-discrimination statutes.
What laws apply to firing an employee?
Federal agencies — like the U.S. Department of Labor (DOL) and EEOC — create and enforce laws to improve workplace conditions and protect employees. You and your HR department should be familiar with all of the laws that govern your business and employees. But, here are the primary federal laws you should pay special attention to when handling an employee termination:
- Title VII of the Civil Rights Act of 1964 (Title VII): This act prohibits employment discrimination based on “race, color, religion, sex or national origin.” It is illegal to terminate an employee based on any of these characteristics.
- The Americans with Disabilities Act (ADA): The ADA protects individuals with disabilities against discrimination in all areas of public life, including employment and termination. It is illegal to terminate an employee due to a disability rather than provide reasonable accommodation.
- The Age Discrimination in Employment Act of 1967 (ADEA): This act protects individuals 40 years and older from age discrimination in the workplace. It is illegal to terminate an employee because of their age.
- The Family and Medical Leave Act (FMLA): This act allows certain employees to take up to 12 weeks of unpaid leave for medical or family reasons — given that both the employer and the employee meet certain requirements. Although this act doesn’t apply to everyone, it is illegal to terminate a qualified employee for taking qualified medical leave.
- The Pregnant Workers Fairness Act (PWFA): This act protects employees within private and public sectors (with 15 or more employees), Congress, federal agencies, employment agencies, and labor organizations. It is illegal to terminate or discriminate against an employee on the basis of pregnancy, childbirth or other related medical conditions.
- The Occupational Safety and Health Act of 1970: This act protects private-sector and federal government employees from health and safety risks resulting from business activities. For example, it is illegal to retaliate against an employee for reporting a workplace health hazard to the OSHA.
“Should an employer’s decision to fire an employee be motivated by the protected class of that employee as set forth in any of the above-referenced statutes or others, a court would likely find the termination to be discriminatory and illegal,” said Andrew Zelmanowitz, partner and employment law expert at Berger Singerman.
In addition to abiding by federal laws, employers must pay special attention to local and state laws; these laws are often stricter than federal law. For example, Zelmanowitz said, the Florida Civil Rights Act expands upon Title VII to include additional protected classes, including prohibiting discrimination based on a disability or marital status.
What is the WARN Act?
Many of the federal laws listed above dictate why you can or cannot terminate an employee, but some laws dictate how you must terminate certain employees. For example, the Worker Adjustment and Retraining Notification Act of 1988 (WARN Act) requires businesses with 100 or more employees to provide a 60-day written notice to employees prior to a mass layoff or plant closure.
“When an employer institutes a mass layoff or closes a division of its operations, it may be required to provide advance notice to employees of the impending layoff in compliance with the WARN Act,” Zelmanowitz said. “In jurisdictions where employees have additional rights by statute, compliance is required by the employer, including notice periods.”
What happens if an employer illegally terminates someone?
If an employee believes they have been wrongfully terminated, they may be able to file a lawsuit against you. If this is the case, the first thing to do is to seek legal guidance from your attorney.
According to Zelmanowitz, an employer that terminates an employee in violation of federal, state or local laws — or in breach of an agreement with the employee — exposes itself to liability. This can be in the form of civil lawsuits, statutory penalties, and potentially equitable or injunctive relief that enjoins the employer from continuing to violate the laws.
- Administrative claims: According to Russell, an employee will often file an administrative claim. In this case, the employer may be subject to an administrative investigation or potential administrative hearing.
- Litigation: Litigation is another potential consequence. Russell advised that an employee “may be able to pursue his or her claims by filing a lawsuit against their employer in court.”
- Financial obligations: If the wrongfully terminated employee seeks litigation, it can cost you legal fees, back-pay damages, future wages, liquidated damages, emotional distress and/or punitive damages.
- Federal and state enforcement: “Federal and state-level agencies may seek to enforce the respective workplace laws, including criminal penalties and possibly imprisonment,” Zelmanowitz said.
To reduce the possibility of unlawful termination, seek guidance from your employment attorney before you fire an employee. Additionally, if you have made the error of wrongfully terminating an employee and are facing a wrongful-termination lawsuit, contact your attorney as soon as possible.
Source interviews were conducted for a previous version of this article.
