What Is Wrongful Termination?

Definition & Examples of Wrongful Termination

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Wrongful termination is the act of firing an employee for illegal reasons or in a way that breaches a contract.

Learn what reasons for firing are illegal and what to do if you have been wrongfully terminated from employment.

What Is Wrongful Termination?

Wrongful termination takes place when an employee is let go from their job for illegal reasons or if firing the employee violates company policy or an employment contract. Wrongful termination laws vary from state to state.

In most states, unless there is a contract or bargaining agreement, at-will employment is the norm, meaning that neither the employer nor the employee needs a reason if they wish to terminate the relationship.

An employee can be considered to have been wrongfully terminated if discrimination is involved in the termination, if public policy is violated, or if company policy states guidelines for termination and those guidelines were not followed.

Other reasons that could be construed as wrongful termination include being fired for being a whistleblower, complaining about workplace issues or for not being willing to commit an illegal act when asked to by an employer.

Discrimination can be considered wrongful termination if an employee has been fired based on their color, race, nationality, religion, sex, sexual orientation, gender, or age.

  • Alternate names: Wrongful dismissal, wrongful discharge 

How Wrongful Termination Works

If an employee is fired for one of the following reasons, they may be able to claim wrongful termination:

  • Breach of contract
  • Constructive discharge
  • Discrimination
  • Employee asked to commit an illegal act
  • Company policy is violated
  • Public policy is violated
  • Whistleblowing

There are no specific laws that provide protection for employees who have been wrongfully terminated from their job.

Wrongful termination may be covered by federal or state laws that prohibit employment discrimination, by contract law if your employer breached an employment agreement, or if the company violated its own policy by terminating the employee.

In addition, if an employee feels he or she was forced to leave a job because the employer made the job unbearable, he or she can file a wrongful termination suit against the former employer for constructive discharge. Constructive discharge is when a work environment is so intolerable that a reasonable person would not be able to continue working there.

However, in most states (other than Montana), employees are presumed to be employed at will, which means that an employee can be fired without notice and without a reason. There are a few exceptions, such as if an employee is covered by an employment contract or collective bargaining agreement or the law has been violated. In such cases, an employer doesn't need a reason to fire you. They just have to make sure they follow the law in doing so.

So, for example, if you filed a worker's compensation claim for an injury sustained on the job, and your employer retaliated against you by firing you, you may have a case for wrongful termination.

How to Handle a Wrongful Termination

If you have been terminated from employment, it's important to know your rights. For example, you have the rights provided to you in an employment contract as well as rights protected by state and federal law.

The next step is to determine what remedies are available and what recourse you may have. That will help you decide on a course of action.

Check with the human resources department at your company. Even though your employment has been terminated, they will be able to answer questions for you about the termination process and what benefits you may be entitled to. Also, ask if you are able to appeal the decision.

If you believe that you have been discriminated against or haven't been treated according to the law or company policy, the U.S. Department of Labor has information on each law that regulates employment and advice on where and how to file a claim. If union activities are involved, the National Labor Relations Board may be able to help. Your state labor department may also be able to assist, depending on state law and the circumstances.

In some cases, you may be able to sue your former employer for wrongful termination. Local bar associations often have a referral service, and may even have a hotline you can call to find an employment lawyer. Keep in mind that you will need to pay for an attorney's services. Also, you may need to file a discrimination claim with the Equal Employment Opportunity Commission (EEOC) before filing a lawsuit.

Termination and Unemployment

When you are terminated you may not be eligible for unemployment compensation. If you are not sure whether you're eligible for unemployment, check with your state unemployment office to determine your eligibility for unemployment compensation. If your claim is denied, you will be able to appeal and explain the circumstances of your termination.

Key Takeaways

  • Wrongful termination refers to when an employee is fired for reasons that are illegal, or if the firing breaches a contract or public policy.
  • There are no laws that specifically protect against wrongful termination; rather, a breach of state or federal employment laws is cause for a wrongful termination claim.
  • If you believe you have been wrongfully terminated, it may be necessary to hire an attorney to help you.

Article Sources

  1. U.S. Equal Employment Opportunity Commission. "Prohibited Employment Policies/Practices." Accessed Aug. 9, 2020.

  2. HG.org. "Wrongful Termination Law." Accessed Aug. 9, 2020.