Losing your job can be a traumatic event. From one day to the next, your whole life can change. The sudden loss of income is devastating, especially in the face of monthly bills and other financial obligations. You may feel shocked, embarrassed, angry and helpless. Fortunately, most states have wrongful termination laws to protect employees.
While the issue of wrongful termination, also called wrongful discharge or wrongful dismissal, varies from state to state, there are some basics governing the rights of employees. Understanding how your state deals with wrongful termination cases is vital, especially if you’re considering an action for wrongful discharge against a former employer.
Virtually all 50 states follow the at-will doctrine of employment. The at-will doctrine states an employer can terminate you from your job at any time, for any reason, and without fear of legal consequences. There are five basic exceptions to at-will terminations.
Exceptions to the At-will Doctrine
1. Public policy
Terminating your employment because you filed a worker’s compensation claim, or because you refused to break a law, lie under oath, or refused to conspire to discriminate against a job applicant based on race, color, creed, age, or gender are all grounds for a wrongful termination suit. Sometimes, sexual preference is also a basis.
The public policy exception extends to whistleblowers but only when the whistle blowing concerns health and safety, state or federal law violations, illegal company activity, or unethical business practices concerning price gouging, anti-trust violations, and similarly heinous employer behavior.
Forty-three states have adopted the public policy exception. Those states that haven’t are Alabama, Florida, Georgia, Maine, Nebraska, New York, and Rhode Island.
2. Implied contract
Terminating your employment when there’s an implied contract between you and your employer is also grounds for a wrongful termination lawsuit. An implied contract of employment is an unwritten one.
You may have an implied contract with your employer if he or she made express representations about your job security, such as “If you leave your former job and come to work with us, you’ll have a job forever,” or “You’re doing a great job for us. If you move from your state to our corporate headquarters, we’ll make you our new district manager.”
A more common type of implied contract lies in the employee handbook. When employers tell employees their rights and duties of employment are in the company’s written handbook (also called employee guidelines, regulations, etc.), the employer has an implied legal duty not to terminate employment as long as the employee complies with his duties of employment as set out in the handbook. In these cases, the employee handbook serves as the implied contract of employment.
Implied contract representations are subject to interpretation by the courts. To decide if an implied contract of employment exists, the courts study the underlying circumstances of each case.
Thirty-seven states have adopted the implied contract exception. Those states that haven’t are Delaware, Florida, Georgia, Indiana, Louisiana, Massachusetts, Missouri, Montana, North Carolina, Pennsylvania, Rhode Island, Texas, and Virginia.
3. Covenant of good faith
Terminating employment when there’s a covenant (agreement) of good faith is also grounds for a wrongful termination suit. This is similar to the implied contract exception, but it goes further.
A covenant of good faith between an employee and employer exists when an employee performs his job duties properly, and in spite of the performance, the employer terminates his employment. The termination is usually sneaky, underhanded, or selfish and in violation of the good faith relationship between the employee and employer.
An excellent example of breach of covenant of good faith is an employee who has worked for his company for many years and is about to retire with full benefits. A few days before he is to retire, the company fires him. The underlying and underhanded reason is so the company won’t have to pay his full retirement benefits. This is clearly a breach (violation) of the covenant of good faith.
Eleven states have accepted the covenant in good faith doctrine. The rest have not. Those with the good faith covenant exception are Alabama, Alaska, Arizona, California, Delaware, Idaho, Massachusetts, Montana, Nevada, Utah, and Wyoming.
4. Written contract of employment
This exception normally applies to executives and upper management. When an employer offers a job to a prospect based on a written contract, the employer and the employee must abide by the employment contract’s terms. Only when an employer fires an employee in violation of the written terms does the discharged employee have a valid wrongful termination case. This exception applies in all 50 states.
5. Constructive discharge
This exception occurs when an employer purposely alters a specific employee’s working conditions and work environment to make it intolerable by any reasonable employee standard. As a result, the targeted employee has no choice but to resign.
Although the employer doesn’t expressly terminate the employee’s job, the employee’s resignation under the intolerable conditions is wrongful discharge, opening the employer up to a lawsuit. This exception won’t apply if the employee knew of the working conditions before beginning employment and then later complains about working conditions or work environment.
Equal Employment Opportunity Commission
If you believe your employer wrongfully discharged you from your employment, the lawsuit against your former employer is considered a breach of contract, whether written or implied.
If your discharge was due to discrimination based on race, color, creed, age, gender, or sexual preference, you may have two options. You may first proceed under a formal written complaint to the Equal Employment Opportunity Commission (EEOC), and then proceed by filing a separate lawsuit against the employer for breach of your employment contract.
Proving a Wrongful Termination Case
If you’re convinced your employer wrongfully fired you, you have to prove how and why. That requires evidence. Here’s where to begin:
1. Ask your employer to explain why he discharged you. Take notes, if you can. Ask your employer to put in writing the reasons he terminated your employment. If you live in any but the following states, you can also secretly record the conversation between you and your employer. You must make absolutely certain the recording is only between you and your employer and no other person. Otherwise, you’ve broken the law.
The 12 states that prohibit recording a conversation unless both parties consent are California, Connecticut, Delaware, Florida, Illinois, Maryland, Massachusetts, Michigan, Montana, New Hampshire, Pennsylvania, and Washington.
2. Ask to see your personnel file. Ask for copies of all documents, notes, and other information contained in it. While most employers don’t legally have to give you copies, it’s always good to try. If necessary, your lawyer can subpoena them later after your lawsuit is filed.
3. Create a journal. Write down the names and contact information of people involved in your termination. Include statements they made prior to your discharge regarding positive commendations for work you performed well.
Also, include references to other employees who your employer didn’t fire even though their job performances were similar to yours. This may determine whether there was a double standard in place. In addition, write down the names and contact information of fellow employees who might later serve as witnesses on your behalf.
4. Determine if your employer terminated you on illegal discriminatory grounds. If so, file an EEOC complaint and make copies of your application and any correspondence from the EEOC. Make sure you copy the “right to sue” letter you receive from the EEOC. The right to sue letter permits you to file a federal lawsuit based on discrimination and entitles you to go ahead with a separate state breach of contract case.
Be diligent because you only have 90 days after receipt of the right to sue letter to file your federal discrimination suit. You have much longer to file your breach of contract case. Check the statute of limitations for breach of contract in your state.
5. Review the exceptions to at-will employment policies. Each state will have slightly different policies, so determine whether your termination falls under one or more of the exceptions. If your company has an employee handbook, study the guidelines related to employee termination. Make copies of the pages dealing with employment termination policies.
Is there an appeals process? If so, did someone deny you access to it? Did your employer fire you because you filed a worker’s compensation case? Did your employer discharge you because you wouldn’t break a law, cheat, or otherwise commit unethical behavior?
6. Begin searching for another job. Although the law doesn’t require you to seek other employment before filing a breach of contract suit, wrongful termination suit, or EEOC claim, it’s very important to mitigate (lessen) your damages. In other words, it won’t impress a jury if you’re complaining about lost wages and blaming the loss on your former employer if you haven’t even tried to find a new job.
The Role of Attorneys
Although you can file an EEOC complaint and litigate it without legal representation, it’s always a good idea to hire an attorney. Because the EEOC is known for hesitating to accept discrimination wrongful termination cases without a history of a pattern of discrimination, you need to do a good deal of investigating. This is all but impossible without an attorney.
EEOC cases and separate breach of contract, wrongful discharge cases normally require a review of your employer’s records. If your employer is a chain or major corporation, your attorney will need to subpoena access to the corporation’s national records.
Whether your employer is a small company or a large multinational one, you should know they will fight hard. For an employer to admit to wrongful termination subjects them to thousands of dollars in damages. Furthermore, if you can show the termination was deliberate, malicious, or discriminatory, the employer will also be subject to a jury award of punitive damages. Punitive damages can reach into the hundreds of thousands of dollars.
Also, if an employer admits to wrongful termination of one employee, it opens the door to others who were recently terminated to file suit also, hoping to cash in on their cases, whether legitimate or not.
Attorneys can take court-ordered depositions (recorded, sworn statements) of employers, present and past employees, witnesses, and more. They can subpoena copies of intra-company emails, memoranda, letters, etc. In addition, your attorney can subpoena surveillance footage of the work area and discover complicity between and among your employer and others, whether employees, corporate heads, vendors, or others who may know of the circumstances surrounding your case.
Most importantly, your attorney can file a breach of contract, wrongful discharge lawsuit, and if necessary, proceed with a federal EEOC suit. If you’re serious and determined to pursue your wrongful discharge case, you must have an experienced attorney. Often, the mere filing of a lawsuit is enough to force a settlement. This probably won’t happen if you try to handle the case yourself.
Just as important is the issue of legal fees. Because EEOC violations and state breach of contract termination are forms of personal injury cases, attorneys can accept them on a contingency fee basis. This means you won’t have to pay your attorney a fee until and unless your case wins at trial or settles out of court.
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