Most states employ a system of at-will employment, meaning an employee can be fired at any time for most any reason. However, that does not mean that any employee may be terminated for any reason the employer chooses. That is because hiring and firing decisions take place within the context of a web of other laws and public policy considerations that may prohibit the termination.
Wrongful termination claims may arise as the result of violation of a federal statute, such as those prohibiting discrimination on the basis of race, sex, religion, age, disability or national origin. Generally, though, wrongful termination is a question of state law. Thus, the best way to ensure that your company’s termination policies are compliant with both state and federal laws is to consult with an attorney familiar with wrongful termination laws in your state.
Some most common exceptions to the at-will employment doctrine that may give rise to wrongful termination claims are discussed below. Note that there is overlap among some of these categories. For example, constructive discharge may arise as the result of discriminatory behavior in the workplace.
Wrongful Termination as a Result of Discrimination
Wrongful termination is just one of the ways in which an employer can be liable for discrimination. In these cases, the employee or applicant is generally required to pursue the same process that he or she would have with regard to another type of discrimination claim, meaning that the case may begin with an administrative remedy such as an EEOC charge.
Employment Contracts
The fact that a state recognizes the at will doctrine does not relieve an employer of the obligation to fulfill contracts. Most employment relationships do not involve contractual relationships. However, contracts are routinely used in some fields, such as the employment of medical professionals. An employer that terminates an employee in violation of the terms of the contract may be liable in any state.
Implied Contracts in Wrongful Discharge Cases
A majority of states also recognize the concept of implied contract with regard to wrongful termination. A wrongful termination case based on implied contract arises when the company violates its own policies with regard to termination.
Imagine, for example, that the employee handbook provided to the complainant on hiring and remaining in effect specifies that a particular action will result in a write-up, and that three such write-ups will result in termination. However, the employer decides to terminate a particular employee as a result of the second write-up for this infraction. In many states, that employee may file a wrongful termination suit based on the employer’s deviation from its own policies.
Thus, avoiding wrongful termination claims begins with careful construction of company policies formulated in consultation with an experienced employment attorney.
Discharge in Violation of Public Policy
With a few exceptions, states recognize an exception to the right to fire anyone at any time where the termination conflicts with public policy considerations. Many of these protections are classified as “whistleblower” statutes. Whistleblower laws are intended to protect the jobs of those who step forward to report certain types of wrongdoing. These generally include health and safety issues, violation of state and federal law, and certain types of unethical business practices.
Some statutes outside the whistleblower category also protect employees from termination as a result of particular actions. Some most common include prohibitions on discharging an employee as the result of filing a worker’s compensation claim, or because the employee’s wages have been garnished.
Employer’s Obligation to Act in Good Faith
A minority of states support a cause of action for wrongful termination if the employer acts in bad faith in terminating the employee. One example would be a company that routinely fired and replaced employees nearing the end of their 90-day probationary period so as to remain fully staffed while avoiding the obligation to provide medical insurance to low-level employees.
Protecting Your Business from Wrongful Termination Claims
Since the basis of a cause of action for wrongful termination may vary from state to state, and the process of such a claim may differ depending upon the statute it arises under, there is no one-size-fits-all guide to avoiding wrongful termination claims.
Protecting your business from this type of claim begins with the creation of your offer letters, handbooks, contracts and other employment policies and procedures, and then relies on making educated decisions about termination based on the current state of all relevant laws. When our firm represents you with regard to employment matters, we will provide clear guidance and update you on developments that could impact your liability.
Whether you are creating a foundation to avoid employee claims, making a decision regarding the discharge of an employee under delicate circumstances or responding to a claim from an employee who has been terminated, we can help.
