Illegally fired from your job? You have the right to compensation for wrongful termination. Here’s what you need to know to make your claim.
The EEOC handles roughly 700,000 calls and inquiries about employment discrimination each year. Nearly half of the employment charges filed are based on employer retaliation, a common reason for wrongful terminations. ¹
Losing your job can be a traumatic, life-changing event. The sudden loss of income is devastating and can be terrifying in the face of monthly bills and other financial obligations.
You may feel shocked, embarrassed, and angry about being fired from your job, especially if your boss was unfair.
It’s important to know you have the right to seek compensation for wrongful termination, and how to build a strong employment case.
State Employment Laws and Exceptions
Practically all 50 states recognize at-will employment, meaning an employer can terminate you from your job at any time, for any reason, and without fear of legal consequences. However, there are certain exceptions.
Fortunately, the exceptions to at-will employment laws allow employees to fight wrongful terminations.
Depending on the state where you work, your employer may be liable if you were fired under the following circumstances:
Violations of Public Policy
“Public policy” is the doctrine on which social laws are based, for the benefit of everyone in our society.
It’s a violation of public policy for your boss to fire you for taking time to vote, or participating in jury duty.
Similarly, it’s illegal to terminate your employment because you filed a worker’s compensation claim; or refused to break the law, lie under oath, or conspire to discriminate against a job applicant.
The public policy exception extends to whistleblowers, but only when the whistleblowing 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 public policy exceptions. Those states that haven’t are:
Case Summary: Employee Fired for Refusing to Break the Law
Robert Adams was a delivery truck driver employed by George W. Cochran & Co. in Washington. D.C.
Adams was fired for refusing to drive a truck that lacked a required inspection sticker.
Adams’ attorney filed a wrongful termination lawsuit against Cochran, alleging he was fired for refusing to violate Washington D.C. laws by driving a truck without an inspection sticker on the windshield.
Cochran contended that Adams was an at-will employee and not entitled to compensation for wrongful discharge or emotional distress.
At trial, Cochran’s team argued that Adams was fired for being a difficult employee and had refused to take prior delivery runs without good reason.
The jury found that Adams was wrongfully terminated in violation of public policy for refusing to break the local law. Adams was awarded the full amount of his back pay.
Written Employment Contracts
Typically, written employment contracts are only offered to executives and upper management. Just like any other legally binding agreement, when an employer offers a job to a candidate 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 contract terms does the discharged employee have a valid wrongful termination case. The written contract exception to at-will employment applies in all 50 states.
Implied Contract of Employment
An “implied contract” is a non-written agreement between you and your employer based on your employer’s words and behavior.
You might have an implied contract with your employer if your boss said things 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 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 or guidelines, the employer has an implied legal duty not to terminate employment so long as the worker is doing their job in compliance with the handbook.
In these cases, the employee handbook serves as the implied contract of employment.
Case Summary: Employee Handbook Becomes Implied Contract
Anthony Nicosia worked in New Jersey at the Wakefern Food Corporation for more than 18 years. Nicosia had been promoted several times over the years and was a Warehouse Shift Supervisor when he was fired.
Wakefern fired Nicolas after some merchandise was stolen from a warehouse. Nicolas was not accused of stealing. He was fired for failing to maintain safe storage and not following proper procedure for reporting the thefts. Nicolas claims he did follow proper procedures.
Nicolas filed a wrongful termination suit. His attorney argued that Wakefern violated an implied contract with Nicolas because they did not follow the progressive-discipline steps outlined in the “Wakefern Disciplinary Procedures” section of the company’s employee procedure manual.
Wakefern argued that Nicolas was an at-will employee and the procedure manual did not give rise to an employment contract.
At trial, the jury found that the manual section received by Nicosia created an implied contract of employment that was subsequently breached by Wakefern.
On appeal, the New Jersey Supreme Court agreed that Nicolas was wrongfully terminated.
The circumstances for an implied contract are as unique as the people involved. Wrongful termination lawsuits based on an implied contract are evaluated on a case-by-case basis.
Thirty-seven states allow wrongful termination lawsuits based on an implied contract exception. Those states that have not are:
Covenant of Good Faith
A “covenant” is a promise or an agreement. At work, a covenant of good faith is an agreement between the employer and the employee to always deal honestly and fairly with one another.
A covenant of good faith is like an implied contract. Generally, the unspoken agreement is that the worker will keep their job so long as they do a good job and follow all the rules.
A “breached” (broken) covenant of good faith happens when the employee performs their job duties properly, and despite good performance, is abruptly terminated.
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 a breach of the covenant of good faith is an employee who has worked for the 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. Such tactics are a breach of the covenant of good faith.
Eleven states have accepted the covenant in good faith doctrine:
Constructive discharge, also called constructive termination, means the employee quit, but only because they were forced out by the employer’s behavior. Since the worker didn’t voluntarily resign, in effect, they were terminated.
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.
Employees who resign are usually not eligible for unemployment benefits. If you were forced out, talk to an experienced attorney about constructive discharge and your right to compensation.
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.
Constructive discharge won’t apply if the employee knew of the working conditions before beginning employment and then later complains about working conditions or work environment.
Federal Laws and Wrongful Termination
The Equal Employment Opportunity Commission (EEOC) is responsible for enforcing federal laws that make it illegal to discriminate against an employee because of:
- Sex (including pregnancy, gender identity, or sexual orientation)
- National origin
- Age (over 40)
- Genetic information (such as family medical history)
Firing an employee due to discrimination is illegal.
It is also illegal to terminate an employee because the employee complained about discrimination, filed a charge of discrimination, or participated in an employment discrimination investigation or lawsuit.
Employment discrimination is always illegal and can happen anywhere in the employment process. Protect your rights with our Guide to Proving Employment Discrimination.
Proving a Wrongful Termination Case
You will need compelling evidence to prove your employer wrongfully fired you. Here’s where to begin:
Ask your employer to explain why you were fired: Take notes, if you can. Ask your employer to put in writing the reasons for terminating your employment.
If you live in any but the following states, you can secretly record the conversation between you and your employer. You must make certain the recording is only between you and your employer and no other person. Otherwise, you’ve broken the law.
These states require the consent of all parties to record a conversation:
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 attorney can subpoena them after your lawsuit is filed.
Create a journal: Write detailed and dated notes. Write down the names and contact information of people involved in your termination. Include statements they made before your discharge regarding positive commendations for work you performed well.
Also, include references to other employees whom your employer didn’t fire even though their job performance was like yours. The comparison may determine whether there was a double standard in place.
Write down the names and contact information of fellow employees who might later serve as witnesses on your behalf.
If your termination was discriminatory: File a discrimination complaint with the EEOC. 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. This letter permits you to file a federal discrimination lawsuit and entitles you to file a separate lawsuit in state court.
Be diligent. You only have 90 days after receipt of the “right to sue” letter to file your federal discrimination suit.
The deadline for filing a wrongful death lawsuit (usually as a breach of contract suit) depends on the Statute of Limitations for the state where you were employed.
Review the exceptions to at-will employment policies: Each state has slightly different policies determining 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.
Take advantage of this comprehensive Guide to State and Local Labor Laws and Services.
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.
Keep track of all your efforts to find a new job, including copies of all cover letters and online applications you’ve filed.
Attorneys Win Larger Employment Verdicts
Although you can file an EEOC complaint and litigate it without legal representation, it’s always a good idea to hire an attorney. Attorneys have the legal expertise needed to uncover proof of the nature and scope of your former employer’s discriminatory practices.
Even if your firing wasn’t based on discrimination, it was still wrong, and you’ll need a skilled attorney to win the compensation you deserve.
Your attorney can force the employer to hand over copies of internal records you might not even know about, including personal records, company financial records, employment policies, private emails and memos, and security camera footage. That’s just the tip of the iceberg.
During the discovery phase of your lawsuit, your attorney can legally question your boss, other employees, and corporate executives under oath; arrange for expert witness testimony; sift through company computer files; and much, much more.
Whether your employer is a small company or a multinational corporation, you should know they will fight hard. They know what it will cost them if you win.
On top of your compensatory damages, if your attorney can show that the wrongful termination was deliberate, malicious, or discriminatory, your employer could be on the hook for hundreds of thousands of dollars in punitive damages.
There’s too much at stake to try fighting a wrongful termination on your own.
If you have a strong case for wrongful termination, most attorneys will represent you on a contingency fee basis, meaning they don’t get paid unless you win a financial settlement or court verdict.
There’s usually no charge for an initial consultation. Find out what an experienced attorney can do for you.
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Wrongful Termination Questions & Answers
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