When Can You Sue an Employer for Wrongful Termination of Employment?

State and federal laws protect workers from wrongful termination. See if you may have been illegally fired and what you can do about it.

Losing your job is a traumatic, life-changing event. The sudden loss of income can be terrifying in the face of monthly bills and other financial obligations. The impact can be compounded if you believe you were wrongfully terminated.

Compensation for wrongful termination can range from job reinstatement with back pay, to additional compensation for other damages arising from the employer’s actions.

Occasionally, an employer who fires a worker for illegal reasons is forced to pay substantial punitive damages for violating the employee’s rights.

It’s important to know your rights under state employment laws and employment discrimination laws, what counts as wrongful termination, and how you can build a strong employment case.

Top 5 Violations of State Employment Laws

Practically all 50 states recognize employment at will, meaning an employer can terminate you from your job at any time, for any reason, without fear of legal consequences. However, there are certain exceptions.

Fortunately, state laws include exceptions to at-will employment that allow employees to fight wrongful terminations. Depending on the state where you work, your employer may be liable if you were fired under certain circumstances.

1. Violation 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 a protected activity like taking time to vote or participating in jury duty. You may not be fired for taking time off under the Family Medical Leave Act (FMLA) so long as you meet the requirements.

Similarly, it’s illegal to terminate your employment because you filed a worker’s compensation claim, or because you refuse 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.

States without public policy exceptions:

Alabama
Florida
Georgia
Maine

Nebraska
New York
Rhode Island

Case Example: 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.

2. Violation of Written Employment Contract

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.

When an employer fires an employee in violation of the written contract terms, the discharged employee has a valid wrongful termination case. The written contract exception to at-will employment applies in all 50 states.

3. Violation of 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 Example: 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 Nicosia after some merchandise was stolen from a warehouse. Nicosia was not accused of stealing. He was fired for failing to maintain safe storage and not following proper procedures for reporting the thefts. Nicosia claimed he did follow proper procedures.

Nicosia filed a wrongful termination suit. His attorney argued that Wakefern violated an implied contract with Nicosia because they did not follow the progressive-discipline steps outlined in the “Wakefern Disciplinary Procedures” section of the company’s employee manual.

Wakefern argued that Nicosia 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 Nicosia 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.

States that do not allow the implied contract exception:

Delaware
Florida
Georgia
Indiana
Louisiana
Massachusetts
Missouri

Montana
North Carolina
Pennsylvania
Rhode Island
Texas
Virginia

4. Violation of 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 violates 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 the employee’s full retirement benefits. Such tactics are a breach of the covenant of good faith.

Eleven states accept the covenant of good faith doctrine:

Alabama
Alaska
Arizona
California
Delaware
Idaho

Massachusetts
Montana
Nebraska
Utah
Wyoming

5. Constructive Discharge

Constructive discharge, also called constructive termination, means the employee quit, but only because they were forced out by the employer’s behavior. For example, an employee may quit to get away from ongoing sexual harassment. 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 employment lawyer 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 the work environment.

Employment Discrimination and Wrongful Termination

Federal laws, and many state laws, make it illegal to discriminate against or fire an employee because of certain protected characteristics. The Equal Employment Opportunity Commission (EEOC) is responsible for enforcing federal employment laws.

It’s illegal to discriminate against an employee because of their:

  • Race
  • Color
  • Religion
  • Sex (including pregnancy, gender identity, or sexual orientation)
  • National origin
  • Age (over 40)
  • Disability
  • Genetic information (such as family medical history)

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 protected class lawsuit.

Case Example: Jury Awards California Couple $7.6 Million for Wrongful Termination

Albert and Stephanie Garcia were resident property managers for an apartment building owned by Seltzer-Doren Management, doing business as Sierra Management.

The Garcias lived rent-free in the apartment building as part of their employment compensation. The couple was fired after Albert Garcia was diagnosed with thyroid cancer and requested accommodations and medical leave for his cancer treatment.

The Garcias, who lost their jobs and were forced to leave their apartment, sued for employment discrimination and wrongful termination based upon a physical disability, specifically Albert Garcia’s medical condition.

A Los Angeles jury found in favor of the couple, awarding Albert Garcia $2.35 million in compensatory damages for lost wages and emotional distress and $4 million in punitive damages, and Stephanie Garcia $1.25 million in punitive damages, for a total verdict of $7.6 million.

How to Prove a Wrongful Termination Case

You will need compelling evidence to prove your employer wrongfully fired you. Here’s where to begin:

1. 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 state other than those listed below, 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.

States that require the consent of all parties to record a conversation:

California
Connecticut
Delaware
Florida
Illinois
Maryland
Massachusetts
Michigan

Montana
Nevada
New Hampshire
Oregon
Pennsylvania
Vermont
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 attorney can subpoena them after your lawsuit is filed.

3. 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 co-workers who might later serve as witnesses on your behalf.

4. File a discrimination complaint

File a discrimination complaint with the EEOC. Make copies of your application and any correspondence from the EEOC. Employment discrimination is always illegal and can happen anywhere in the employment process.

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. If you’re in this window, you should hire an attorney immediately.

The deadline for filing a wrongful termination lawsuit (usually as a breach of contract suit) depends on the statute of limitations for the state where you were employed.

5. Review the exceptions to at-will employment policies

Each state has slightly different wrongful termination laws determining whether your firing falls under one of the exceptions. Search your state’s laws in this comprehensive directory of state and local labor laws and services.

If your company has an employee handbook, study the guidelines related to employee termination. Make copies of the pages dealing with employment termination policies.

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.

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. Employment law attorneys have the expertise to prove wrongful termination by uncovering evidence you wouldn’t be able to get on your own.

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 may find other violations that give you cause to sue your employer.

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, prior complaints of a hostile work environment, 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 more.

Whether your employer is a small company or a multinational corporation, 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 without specialized legal advice.

If you have a strong claim, 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. Most wrongful termination lawyers offer a free consultation to fired employees.

Suing for Wrongful Termination Questions

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 >>