10 Lawful Reasons to Sue Your Employer: Grounds for a Successful Lawsuit

Wondering what are the legal reasons to sue your employer? We’ll explain when you have grounds to file a lawsuit against your employer for a workplace injury.

Employers are often protected from employee lawsuits due to a complicated web of workers’ compensation laws in each state. However, exceptions to the state laws exist that allow injured and mistreated workers to take negligent and abusive employers to court.

If you’ve been injured, mistreated, or wrongfully fired from your job, you may be well within your rights under state or federal laws to file a lawsuit against your employer.

Here’s where we unpack the most common reasons you can take legal action against your employer outside of workers’ compensation.

Top 10 Reasons to Sue Your Employer:

    1. Failure to Carry Workers’ Comp Insurance
    2. Wrongful Termination of Your Employment
    3. Employer Retaliation Against Employees
    4. Employment Discrimination Practices
    5. Liability for Injuries Caused by a Coworker
    6. Exposing Employees to Toxic Substances
    7. Providing Defective Work Products and Tools
    8. Employer’s Intentional or Egregious Conduct
    9. Sexual Harassment in the Workplace
    10. Deducting or Withholding Fair Pay

1. Failure to Carry Workers’ Compensation Insurance

Every state requires employers to carry workers’ comp insurance or an equivalent form of self-insurance protection for workers.

Under the no-fault workers’ comp system, an injured employee doesn’t have to prove the employer was negligent. The injury alone is enough for workers’ comp to pay the employee’s medical bills, out-of-pocket expenses, and partial lost wages. In return, injured employees give up the right to sue their employers.

An employer’s failure to carry workers’ comp insurance subjects the company to substantial fines and penalties and gives an injured employee the right to sue.

Unlike a workers’ compensation claim, a personal injury lawsuit allows the employee to pursue a wider range of damages, including total lost wages, and pain and suffering.

Punitive damages, meaning an additional amount of money intended to “punish” the employer, may also be awarded in extreme cases of an employer’s reckless disregard for safety or gross negligence.

Example: Back Injury with No Workers’ Comp

Andrew worked on the loading dock for a small delivery company. He assumed the company carried state-mandated workers’ compensation insurance.

Andrew was loading one of the delivery trucks when his back gave out. An MRI showed he had a herniated disk. When Andrew asked for the workers’ comp insurance information, his supervisor told him the company wasn’t insured.

Andrew retained an attorney and successfully sued his employer for damages, including compensation for his medical bills, medications, transportation to and from therapy, all his lost wages, and his pain and suffering.

2. Wrongful Termination of Your Employment

Almost all states follow “at-will” employment laws. At-will employment is a legal doctrine meaning both the employer and employee are free to end their working relationship at any time, for just about any reason.

There are several wrongful termination exceptions to the at-will doctrine. The most common reasons for wrongful termination cases are a breach of an implied or written contract, breach of an employer’s covenant of good faith, and violation of public policy.

Breach of an Implied or Written Employment Contract

An implied contract means that you and your employer have established a relationship that creates a reasonable expectation of continued employment.

A written contract describing your employment rules, even one with “at-will” language, can be used as strong evidence that you can’t be legally fired without good reason by your employer.

Example: Implied Employment Contract

Susan worked in California as a successful sales representative. She was moving steadily up the corporate ladder. An out-of-state employment firm contacted her with an opportunity to work for a rapidly expanding New York company.

Susan interviewed with the company and was offered a position at a higher salary and the inside track to a supervisory position. She accepted the job and moved across the country to New York.

Two months later she was fired. The company told her the termination was due to her lack of sales. Susan retained an attorney and successfully sued the New York company based on an implied contract of employment.

Susan proved she would not have moved from California, “but for” the implied contract of employment made by the New York company.

She testified the company never told her she would be terminated within a two-month period because of poor sales. If they had, Susan stated, she never would have left her former job and moved across the country. The court agreed.

Breach of an Employer’s Covenant of Good Faith

Breach of an employer’s covenant of good faith and fair dealing is like breaking a promise to do the right thing.

It means that you’ve been terminated without cause after your employer has given you a reason to believe that your employment will continue, and you’ll be treated fairly so long as your job performance is satisfactory.

Violation of Public Policy

Public policy is the system of laws and values that guide our society. If you’ve been fired in violation of public policy, it is frequently in retaliation against you for:

  • Exercising a legal right, like the right to vote
  • Filing a compensation claim, such as workers’ compensation
  • Reporting the employer for wrong-doing, sometimes called “whistle-blowing”
  • Refusing to do something illegal, like lying to a government inspector

Visit the National Conference of State Legislators website for a chart of each state’s wrongful termination policies.

When these exceptions can be proved, a wrongfully terminated employee may be able to sue the employer. In these cases, your lawsuit against an employer can include compensatory damages for past and future lost wages, related out-of-pocket costs (such as legal fees), mental anguish, and punitive damages.

3. Employer Retaliation Against Employees

State and federal laws prohibit employers from engaging in retaliatory behaviors. An employee who suffers retaliation has grounds to sue the employer.

Retaliation can include:

  • Termination
  • Demotion
  • Unfair disciplinary actions
  • Isolation from other employees
  • Interference with a workers’ compensation claim
  • Threatening statements or actions

Retaliation can occur when an employee files a workers’ compensation claim or civil rights claim, when an employee ignores an employer’s instruction to commit an unlawful or dangerous act, or when an employee is a whistle-blower.

The Equal Opportunity Employment Commission (EEOC) provides support and information for employees subjected to employer retaliation.

Example: Employer Abuse

Martha worked for several years as a secretary at an accounting firm. Her primary duties included entering data and typing out lengthy financial disclosures.

Martha began to experience pain in her left wrist, and her doctor determined she suffered from Carpal Tunnel Syndrome from the repetitive motion of typing. Martha filed a workers’ comp claim.

After she filed the claim, her employer berated her in front of other employees, threatened to fire her, and otherwise made her workday unbearable. Martha retained an attorney and successfully sued her employer based on his retaliatory actions.

4. Employment Discrimination Practices

Employees who suffer discrimination based on national origin, religion, gender, disability, or age, are entitled to sue their employers under state and federal statutes (Title VII of the Civil Rights Act).

Employer discriminatory practices include failure to hire, retaliation, harassment, promotion denials, isolation, and demotion to inferior duties.

Example: Racial Employment Discrimination

Sarah is a black female who applied for a job as a paralegal at a well-known civil litigation firm.

Although the firm employed over fifty people, there were no black employees. Sara was fully qualified for the position, yet the job went to a lesser-qualified white applicant. When Sarah asked why she didn’t get the job, she was told the other applicant was more qualified.

Sarah filed a lawsuit under Title VII of the U.S. Civil Rights Act. The court found Sarah’s qualifications clearly warranted her employment by the law firm and awarded Sara damages.

5. Employer Liability for Injuries Caused by a Coworker

An employee injured by a coworker may have grounds to sue the employer.

The injured employee must prove the employer was aware of the third party’s history or predisposition to violence and took no action to remove the employee or otherwise protect workers from the third party’s reckless behavior.

Example: School Employee Hit by Bus Driver

Ellie worked for the local school district as a crossing guard. She was assigned to a street corner where school buses passed on the way to and from the school.

On several occasions, the same bus driver swerved and almost hit Ellie. She reported the driver.

An investigation revealed the bus driver was taking prescribed medications which sometimes caused him to briefly fall asleep at the wheel. Because bus drivers were in demand, the school district took no action to prohibit him from driving.

After several more close calls, the bus driver fell asleep at the wheel and crashed into Ellie.

Ellie declined workers’ compensation benefits. She instead retained a personal injury attorney and filed a lawsuit against the school district.

Ellies’ attorney argued that the school district was responsible for Ellie’s damages because they were aware the bus driver was repeatedly falling asleep at the wheel and didn’t remove him from the job. Allowing a person under the influence of medication known to cause drowsiness to continue as a school bus driver was egregious conduct by the school district.

The court sided with Ellie, stating the school district had a legal duty to remove an employee who exhibited dangerous behavior, and the school breached that duty.

Ellie declined to file a workers’ compensation claim after her workplace injury. In many states, when a worker accepts workers’ compensation benefits, they are waiving their right to sue the employer. 

6. Exposing Employees to Dangerous and Toxic Substances

Employers have a legal duty to protect employees from undue harm and injury. They breach that duty when they negligently expose their workers to toxic chemicals, including asbestos, benzene, chromium compounds, silica, radium, and other extremely harmful substances.

In most cases, employees harmed by exposure to toxic substances can bypass the workers’ compensation system and sue their employers directly.

When the courts find an employer has purposely, or with gross negligence, exposed an employee to toxic substances, the injured employee may also be awarded punitive damages.

Example: Occupational Disease Caused by Asbestos Inhalation

Frank worked for a building restoration company. One of his duties was tearing down old drywall. Frank didn’t know that a building where he worked was built over fifty years ago and was insulated with asbestos.

Frank’s employer wasn’t sure if the building contained asbestos because he didn’t want to pay for the test to check for it.

A year and a half later Frank began having problems breathing. A medical diagnosis revealed he suffered from asbestos poisoning related to his on-the-job exposure.

Frank’s attorney successfully avoided the workers’ compensation system and sued his employer for damages. Because of the employer’s gross negligence in deliberately putting his employees at risk, the court also awarded Frank punitive damages.

7. Providing Defective Work Products and Tools

The courts hold that suing an employer for a defective product or tool used on the job may be justified in certain circumstances.

The injured employee has grounds for a lawsuit by proving the employer was aware the product or tool was defective and failed to repair or eliminate it.

Example: Defect in Protective Clothing

While Amy worked as a firefighter, the manufacturer of the protective clothing she wore recalled the product because part of it was susceptible to fire. The city council was aware of the recall but took no action to inform the firefighters or remove the clothing from use.

Amy was fighting an apartment fire when her protective clothing ignited, seriously burning Amy. Amy sued both the city and the manufacturer.

In her lawsuit, Amy proved the city knew the clothing was defective, yet did nothing to withdraw it from use. Amy also successfully sued the manufacturer in a separate product liability lawsuit.

8. Employer’s Intentional or Egregious Conduct

Workers’ compensation laws almost always prohibit injured workers from suing an employer, even in cases of employer negligence. An exception is made when the employer engages in intentional or egregious (deliberate or exceptionally bad) conduct.

An employee must prove the employer’s actions were deliberate and certain to result in the employee’s injuries. While most states allow an employee to sue for egregious or intentional conduct, ten states do not.

States that don’t allow an employee to sue for egregious conduct:

  • Alabama
  • Georgia
  • Indiana
  • Maine
  • Nebraska

  • New Hampshire
  • Pennsylvania
  • Rhode Island
  • Virginia
  • Wyoming

Federal employees are also prohibited from suing the government for claims of employer intentional or egregious conduct.

Example: Exploding Grease Fryer Injures Worker

Jack worked for a New Jersey-based fast food franchise. Jack’s normal duties included preparing fried food for customers.

Several employees had complained to the manager that the food fryer was malfunctioning and sometimes spewed hot grease into the air. The manager ignored the complaints.

Jack was about to drop French fries into the fryer when it exploded, covering Jack with hot grease, causing third-degree burns. Jack’s injuries were horrifically painful and left him permanently scarred.

His employer told Jack that workers’ compensation would take care of his medical bills and partial lost wages while he was recovering.

Instead, Jack retained an attorney who successfully sued Jack’s employer based on intentional and egregious conduct (ignoring the malfunctioning fryer, which was certain to result in injury).

9. Sexual Harassment in the Workplace

According to the Equal Employment Opportunity Commission (EEOC) it is unlawful to harass a person in the workplace because of their sex.  You may have grounds for a lawsuit if you are subjected to sexual harassment in the form of unwelcome sexual advances, requests for sexual favors, or unwelcome touching or comments of a sexual nature.

The harasser may be a man or a woman who is harassing a victim of the opposite or same sex.

Unwelcome remarks about a person’s sex don’t have to be sexually explicit to count as harassment. For example, a female supervisor who makes derogatory remarks about men in general is a form of sexual harassment, especially when it creates a hostile work environment for the men who have to work with her.

You may be able to sue your employer for sexual harassment even if the harasser is a co-worker, someone from a different department, a customer, or even a vendor so long as your employer is aware of the offensive behavior and fails to put a stop to it.

Most states, like California, provide a statutory cause of action for victims of workplace sexual harassment.

10. Deducting or Withholding Fair Pay

Employers can be legally sued for inappropriately deducting pay from covered, nonexempt workers.

The federal Fair Labor Standards Act (FLSA) required employers to pay a minimum wage, and overtime pay for working more than 40 hours in a week.

Many states have their own robust labor laws to protect workers from being cheated by their employers.

Contact the State Labor Office in your location to learn more about the workplace laws protecting you.

When you’ve been injured or discriminated against in the workplace, you owe it to yourself to contact an employment law attorney to discuss your case. Most attorneys offer a free consultation to injury victims – even if your injuries aren’t physical. It costs nothing to find out how you can successfully sue your employer.

Suing Your Employer Questions and Answers

Charles R. Gueli, Esq. is a personal injury attorney with over 20 years of legal experience. He’s admitted to the NY State Bar, and been named a Super Lawyer for the NY Metro area, an exclusive honor awarded to the top five percent of attorneys. Charles has worked extensively in the areas of auto accidents,... Read More >>