Can You File a Suit Against Your Employer for Wrongful Termination and Breach of Contract?

A recently terminated employee needs to maintain a level head to determine if his termination was illegal and whether he wants to pursue legal action against his former employer.

Some employee terminations may violate federal or state law. The legality of the termination depends on whether the employee was an at-will employee at the time of his termination. An employee can sue his employer under a wrongful termination claim if the employee can prove that he was not at-will pursuant to his employment contract. If an employee is terminated without cause, despite a contract that states that he can only be terminated for cause, the employee may have a viable wrongful termination claim based on a breach of contract theory. Also, the employee has a claim for wrongful termination if the court with jurisdiction over the action finds that the employer’s actions are either a common law or statutory law exception to the presumption that all employees are at-will.

Common Law Exceptions to the At-Will Employment Presumption

The National Conference of State Legislatures defines at-will employment as follows: “At-will means that an employer can terminate an employee at any time for any reason, except an illegal one, or for no reason without incurring legal liability.” Every state except Montana presumes that all employees are at-will employees. If an employee has an employment contract that specifies that his employment is for a specific period or that he can only be fired for cause, the employee is no longer considered an at-will employee. Also, there are three common law exceptions to the presumption of at-will employment: implied contract, implied covenant of good faith and dealing and public policy. Forty-one states and the District of Columbia recognize an implied contract when an employer makes a written or oral assurance that the employee will work for the employer for a specific period or indefinitely. An implied covenant may also exist when an employer makes a written or oral assurance to the employee that he can only be terminated for cause. Only a minority of states recognize the implied covenant of good faith and dealing exception that prohibits an employer from firing his employee for an unfair or malicious reason such as firing a sales associate to avoid paying him a major commission. The most widely recognized exception to the at-will employment presumption is the violation of public policy as set forth by both federal and state laws and jurisprudence. For example, an employer cannot terminate an employee for joining the National Guard because this is against public policy that encourages a person to provide services that benefit the public interest.

Statutory Exceptions to At-Will Employment Presumption

The two main statutory exceptions to the presumption of at-will employment are discrimination or retaliation in violation of state or federal law. There is variance among the states as to what types of employer behavior constitute discrimination. The majority of states generally agree that it is discrimination in violation of the law to fire an employee based on race, nationality, sex, age, disability, religion and pregnancy. Some states extend protection to termination based on an employee’s sexual orientation. It is also illegal for an employer to fire an employee based on his whistle-blowing actions under the Sarbanes-Oxley Act or for reporting safety and health hazards in the workplace under the Occupational Safety & Health Act.

Initiating a Wrongful Termination Suit

Wrongful termination claims are complicated, high-stake types of suits since some prevailing claimants stand to receive a significant amount of damages. As such, an employee who believes he was wrongfully terminated should retain an experienced attorney who specializes in employment law. Depending on the nature of the employee’s claim, the employee must either file a claim in a court of appropriate jurisdiction or file the claim with an appropriate administrative agency. Typically, an employee who believes that his wrongful termination was based on discrimination must present his claim to the Equal Employment Opportunity Commission before filing a private action in state or federal court.

Legal Remedies

The main legal remedies available to a prevailing claimant in a wrongful termination action are reinstatement of the claimant’s former job and a monetary award. The monetary award issued to the prevailing claimant can consist of compensatory damages such as compensation for emotional distress, actual damages such as reinstatement for the value of lost employee benefits and punitive damages for particularly egregious violations.

References

• National Conference of State Legislatures: The At-Will Presumption and Exceptions to the Rule
• Nolo: Wrongful Termination: Was Your Firing Illegal?
• FindLaw: Ten Things to Think About: Wrongful Discharge
• WhoCanISue.com: Wrongful Termination Summary
• Justia.com: Firing & Wrongful Termination
• WrongfulTerminationLaws.com: Remedies Available for a Wrongful Termination Claim

Resources

• Southwestern Legal Studies in Business Academic Series: Employment Law for Human Resources – Part 6: Terminating Employment