Definition
An illegal firing that violates federal or state laws, public policy, or an employment contract, occurring when an employer terminates an employee for discriminatory reasons, in retaliation for protected activity, or in breach of an implied or express agreement.
US Context
Wrongful termination law involves a complex interplay of federal statutes (Title VII, ADA, ADEA, FMLA), state statutes, common law theories, and contractual protections. Each state recognises different exceptions to at-will employment — some recognise implied contract and public policy exceptions, while others are more restrictive. California, for example, recognises broad public policy protections, while other states may limit claims to specific statutory violations. Jury verdicts in wrongful termination cases can reach millions of dollars, making prevention and documentation essential.
Best Practices
- Document all performance issues, disciplinary actions, and the business reasons for termination decisions
- Apply progressive discipline consistently across all employees to avoid claims of disparate treatment
- Conduct a legal review before terminating employees who are in protected classes or have recently engaged in protected activity
- Investigate all employee complaints thoroughly before making termination decisions
- Avoid terminating employees during or shortly after FMLA leave, workers' compensation claims, or discrimination complaints without strong documentation
Frequently Asked Questions
What makes a termination wrongful?
A termination is wrongful if it violates a specific law (such as anti-discrimination statutes), breaches an employment contract, retaliates against protected activity (such as whistleblowing or filing a complaint), or violates public policy. The at-will doctrine does not protect illegal firings.
What damages can an employee recover in a wrongful termination case?
Depending on the legal theory, employees may recover back pay, front pay, compensatory damages for emotional distress, punitive damages, and attorneys' fees. Federal anti-discrimination statutes cap compensatory and punitive damages based on employer size, but state law claims and contract claims may not be capped.
How can employers protect themselves from wrongful termination claims?
Maintain thorough documentation of performance issues, apply policies consistently, follow progressive discipline, investigate complaints before acting, have termination decisions reviewed by HR and legal counsel, and ensure the stated reason for termination is the actual reason.