When You Can Sue an Employer for Wrongful Termination

Disappointed Businesswoman Standing With Cardboard Box in Office
••• RUNSTUDIO / Getty Images

If you’ve recently been terminated for cause, you may be wondering whether your employer was within their rights to fire you—or whether your dismissal constitutes wrongful termination. And, if it turns out you were fired illegally, your next question will probably be whether you can—and should—sue.

What Doesn’t Count as Wrongful Termination

The majority of workers in the United States are employed at will, which means that their employers can fire them for any reason, or no reason at all, provided that the reason isn’t discriminatory. (More on that in a minute.)

This means that it's usually legal for your employer to terminate your employment unexpectedly, without advanced warning, and to decline to provide a reason for your termination.

In fact, many employers choose to offer as little notice or explanation as possible, even going so far as to characterize the termination as a layoff, rather than take the risk of violating the law by providing a reason that later turns out to be discriminatory.

Bottom line: Unless you have an employment contract or collective bargaining agreement that mandates a certain amount of notice, it’s legal for your employer to fire you without notice.

They are also not obligated to provide you with an opportunity to correct issues pertaining to your work performance before terminating your employment. (Although again, as a matter of company policy, many employers will create a standard process for termination that includes a performance improvement plan, both to minimize the chances of legal hassles and to maintain good morale among the staff.)

Examples of Wrongful Termination

Per federal law, it’s illegal for employers to discriminate in hiring, firing or promotion on the basis of:

  • Sex or Gender
  • Race or Color
  • Religion
  • National Origin
  • Disability
  • Pregnancy
  • Age (over 40, per federal law, although some states offer protections for workers younger than age 40)
  • Genetic Information

Workers can also sue or file a complaint with the Equal Employment Opportunity Commission if they are sexually harassed at work, fired for being a whistleblower, subject to constructive discharge (aka forced to resign), or made to endure a hostile work environment.

Questions to Ask Yourself Before Suing

1. Do you feel that the termination was based on discrimination? If so, you will likely have to file a charge of discrimination with the EEOC before filing a job discrimination lawsuit against your former employer. (The exception: violations of the Equal Pay Act do not require you to file a charge, provided that you file your suit within two years of the pay discrimination.) Keep in mind that you have a limited amount of time in which to file—generally, 180 days from the time of the incident, although local laws may extend this deadline to 300 days.

2. What’s your goal in suing (and is it realistic?) Do you want money, a change in behavior, or just the satisfaction of knowing that they didn’t get away with it, scot-free? It’s important to know what your goals are before you get embroiled in a long legal process. Consult with an employment attorney early on, to figure out whether your goals are reasonable. 

3. Are you willing to invest time and money in pursuing your case? Unless you’re able to find an employment attorney to take your case pro bono, suing is expensive. It can cost thousands of dollars to take a suit to trial. To make matters worse, employers typically have in-house lawyers at the ready to wear you down with delays and postponements. On the other hand, many lawful termination lawsuits never reach trial, often because employers choose to settle. Think about how much time, money, and effort you can afford to put into the process before you proceed.

How to Move on After Being Fired

Regardless of whether you choose to sue for wrongful termination, you’ll need a plan for moving forward after being fired. That means knowing your rights as a (former) employee, including when and where to pick up your final paycheck, whether you’re entitled to pay for accrued vacation and sick time, what will happen with your health care benefits, retirement plan, any stock options and more.

HR will be able to assist you with these questions, as well as inform you about how the company plans to characterize the dismissal. It’s in your best interests to find out now before future employers call asking to verify your employment history.

Don’t assume that they’ll say the worst: many organizations have a policy of confirming no more than job title and dates of employment. You may even be entitled to unemployment benefits, depending. You won’t know until you ask.

Looking toward the future, practice answering interview questions about the termination, and gather references from contacts to bolster your candidacy for jobs. Don’t let this reversal stand in the way of your success. Many famous and influential people were fired before making their mark on the world, including Steve Jobs, Oprah Winfrey, and Thomas Edison.