What Is Wrongful Termination? (With Examples + Common Mistakes)

By Chris Kolmar - Sep. 14, 2021

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Wrongful termination is dismissal from a position that violates either legal statutes, public policy, or an employer’s contractual obligation. Policies around wrongful termination exist to protect workers’ rights not to be discriminated against, wrongfully targeted, or defrauded.

However, the term wrongful termination (or wrongful dismissal) is very specific in a legal sense. It only includes certain circumstances and does not mean that you are entitled to a “good reason” for being fired.

Learn what constitutes wrongful termination, how to deal with it, and what most people get wrong about wrongful dismissals.

What Is Wrongful Termination?

Wrongful termination is when an employee’s contract has been terminated by his or her employer, but the termination involves a violation of the terms of the contract of employment or a violation of state provision or employment laws.

Thus, a wrongful termination suit is dependent on the terms laid out in the employment contract and the laws and public policies in place where you live. This includes laws and policies such as anti-discrimination laws, whistle-blower laws, and non-retaliation policies.

Various anti-discrimination laws and policies ensure that it is considered wrongful termination if you are fired on the basis of sex, race, religion, nationality, disability status, medical condition, or age.

Non-retaliation and whistleblower policies protect you from being fired for raising a concern or complaint about illegal and unethical behavior. For instance, these laws protect you from being let go due to speaking up on harassment in your workplace.

Related to wrongful termination is “constructive dismissal.” This occurs when an employee – due to a hostile work environment or other concerns – has no choice but to quit their job. If an employer has violated your legal rights and forced you to resign, this is considered a constructive dismissal and is regarded similarly to wrongful termination.

How Wrongful Termination Works

A wrongful termination claim can be filed if an employee has been unlawfully fired from their job. An employee can be considered to have been wrongfully terminated if any of the following circumstances occurred:

  • Employment contract breached by the employer

  • Violation of company policy

  • Discrimination of protected class

  • The employee was fired for refusing to commit an illegal act

  • Violation of public policy

  • The employee was fired for whistleblowing or raising concern

An employee may also file a wrongful termination suit if they were forced to resign due to an unbearable work environment or violation of rights. The fact that you were forced to quit rather than wrongfully discharged does not change the responsibility your employer holds in this case.

Nearly every state in the United States (except Montana) is considered an at-will employment state. Essentially, this means employers can terminate employees, change their job duties, lower their salary, or change their benefits “at-will” without a just cause or reason. There are some notable issues with at-will employment policies, but that is a subject for another day.

However, at-will employment does mean that your employer does not need a reason to fire you. If you are a contract employee, this does not apply as your employer must follow your contract. But if you are an at-will employee, your employer is allowed to fire you at any time so long as they are following the law.

How to Handle a Wrongful Termination

If you believe you’ve been wrongfully terminated, you have options for recourse, but think through them carefully.

  • Gather information. Your first step is to inquire about your termination. See what the reasoning is and who was in charge of the decision. Ask if you can appeal the decision or if you are entitled to benefits such as severance pay.

    Be sure to know what contracts you have signed and what agreements you have made. You may have signed or been asked to sign a separation agreement during your dismissal. If you signed a separation agreement, your options for legal recourse might be limited, but you still have rights and options.

    You may have also signed a non-compete agreement. If this is the case, your ability to work within the same industry will be limited, but you may have the opportunity to push back on some terms if they are seen as unreasonable.

  • Learn your rights. Next, you’ll want to know your rights. Read carefully over your employment contract and highlight areas of interest of agreements you believe have been breached. Become very familiar with the laws and policies of your jurisdiction.

    A great place to start in researching employment laws is through the U.S. Department of Labor. Their website has information on all laws that govern employment and advice on filing a wrongful termination claim.

  • Consider your case. If your research and your understanding of the situation amounts to wrongful termination, you may be able to sue your former employer for compensation for things such as lost wages and benefits, emotional distress damages, and punitive damages.

  • Hire legal counsel. If you are considering suing your former employer, talk to an attorney who specializes in employees’ rights. They will be able to tell you what options you have and help you navigate this process.

7 Things Employees Get Wrong About Wrongful Termination

  1. Being fired without a sufficient reason is always wrongful termination. It may seem unfair, but most states in the U.S. operate under the assumption that your employment is “at-will.” Therefore, you can be fired for any non-protected reason without notice.

    However, this doesn’t mean you can be fired for any reason at all (which we will discuss further below). There are still federal and state laws in place regarding employment that must be followed.

    At-will employment, though (which is observed in all 50 states excluding Montana), means that your employer is legally allowed to fire you for the reason of simply not wanting to work with you any longer. Unless, of course, this is a false “cover-up” explanation.

    So long as your employer is abiding by the laws in place as well as their own contracts and policies, it isn’t wrongful termination. Your best option is to apply for unemployment and begin searching for new jobs.

  2. At-will employment means I can be fired for any reason. While at-will employment may mean that your employer is free to fire you without a “justified” reason, it doesn’t mean they can fire you for any reason. It is never lawful for your employer to fire you because of discrimination.

    It is also likely wrongful termination if you were fired due to reporting on illegal activity in your workplace. There are many other such cases where you may have a valid wrongful termination suit on your hands.

    If dishonest, discriminatory, or illegal behavior occurred in any way during your firing, it could have very well been a wrongful termination, regardless of at-will employment status.

  3. Discrimination laws only apply to minorities. There are many federal and state laws offering protection against discrimination to many different groups of people. It is illegal for your employer to fire you on the basis of sex, race, religion, nationality, disability status, medical condition, or age.

    In some states, being terminated due to your sexual orientation or gender identity also constitutes wrongful dismissal. We all have unique identities and circumstances that could be illegally targeted for discrimination.

    If you believe you have been discriminated against at work, your concern is valid and worth looking into.

  4. Being fired in retaliation isn’t wrongful termination. If you are fired in retaliation for making a complaint or claim against your employer, or if you are fired as a form of sexual harassment (e.g., fired for refusing quid pro quo harassment), you have been wrongfully terminated in the eyes of the law.

    Though there are no laws specifically governing wrongful termination, employment laws protect you from being punished for speaking up on behalf of your rights and the rights of others.

  5. I can’t file a wrongful termination claim if I quit. If you were forced to quit due to a hostile work environment or because of illegal activity or a violation of your rights, you can still file a claim.

    The fact that you were forced to quit due to the toxic circumstances isn’t much different than being illegally fired. In both instances, your rights as a worker were violated.

  6. Internal firing-policy and contract violations don’t amount to wrongful termination. Signed contracts between an employee and employer are legally binding. Thus, if your employer violates your employment contract in any way, you have a valid wrongful termination case.

    If your employer fired you without reason before the stated end of your employment in your contract, or if the company firing policy was not followed during your termination process, you may have been wrongfully dismissed.

  7. Wrongful termination is a form of defamation. While wrongful termination does not in and of itself amount to defamation, defamation may have been involved in your firing.

    Defamation is an attempt to wrongfully call your character into question or ruin your reputation, and possibly hurt your chances of finding future employment.

    Gossip and other small-time defamation claims may not hold much water, but if your employer maliciously made a false statement about you, you have a valid defamation claim.

Wrongful Termination FAQ

  • What qualifies as wrongful termination? To qualify as wrongful termination, you must be fired or induced to quit for illegal reasons that violate federal anti-discrimination laws, state employment laws, or the employment contract you signed. Common examples of wrongful termination include being dismissed based on gender, disability, or race.

    Quitting can also qualify as wrongful termination if you were working in a hostile work environment and made repeated written complaints to management and/or regulatory agencies.

  • Is it hard to prove wrongful termination? Yes, it is hard to prove wrongful termination in most cases. When bringing a lawsuit against your former employer, you’ll need as much evidence as possible. This means documenting the illegal and discriminatory nature of your work experience and dismissal.

    Text messages, emails, performance evaluations — these are the types of documents that courts will pore over when determining whether your dismissal rises to the level of wrongful termination.

    Compounding the difficulty of winning a wrongful termination case is the fact that corporations typically have powerful legal teams on retainer. It’s advisable for you yourself to also lawyer up, which will be expensive. Even with an attorney, the case will require a great deal of your time and attention.

    All this said, if your case looks solid, many companies will be willing to settle out of court in response to you waiving your right to sue.

  • What can I do if I got fired unfairly? If you got fired unfairly, you can turn to your company’s human resources department for more information. Discuss why you feel your firing was unfair and try to understand their motivation for the decision. If you feel that your firing was discriminatory, make sure to collect any supporting evidence from your company computer before you leave.

    However, if you were fired simply because your boss doesn’t like you, even though you do better work than your peers, you don’t have much recourse. While unfair firings certainly sting, they are not illegal and do not rise to the level of wrongful termination.

    You can make an official complaint about your boss to the company’s HR department, write a review of the company detailing your negative experience, and receive a free consultation with a lawyer to explore your options. But the best thing to do after an unfair firing is to start looking for a new job that’ll treat you better.

  • Can I sue my employer for firing me for no reason? No, you cannot sue your employer for firing you for no reason, unless you live in Montana. The other 49 states have “at-will” employment, guaranteeing that employers can fire employees and employees can quit their jobs whenever they like.

    The only time you can sue your employer for firing you is when they fire you for a discriminatory reason, fire you for failing to perform illegal acts, violate your employment contract, or fire you as retaliation for whistleblowing.

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Author

Chris Kolmar

Chris Kolmar is a co-founder of Zippia and the editor-in-chief of the Zippia career advice blog. He has hired over 50 people in his career, been hired five times, and wants to help you land your next job. His research has been featured on the New York Times, Thrillist, VOX, The Atlantic, and a host of local news. More recently, he's been quoted on USA Today, BusinessInsider, and CNBC.

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