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Wrongful Termination

Definition, resources, and FAQs.
By Garth Coulson, Updated Dec 15, 2023
A woman carrying a box of office supplies.

A wrongful termination occurs when an employee is fired for illegal reasons. Wrongful termination is also known as unlawful termination, wrongful dismissal, or wrongful discharge. An employee can be reinstated or sue if there is a case of wrongful termination.

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At-Will Employment and Wrongful Termination:

Most employees in the U.S. work at-will, which means an employer can fire them at any time, for any legal reason. This can protect employers from wrongful termination. However, there are several common situations when an employee may not be considered at-will.

Final Thoughts:

Obviously, you should never fire someone for illegal reasons, such as their race or gender. But to avoid being sued, it’s also important to document your reasons for terminating an employee so that you can prove it was not done for illegal reasons.

FAQs:

Is it hard to prove wrongful termination?

You must be able to prove that the employee acted inappropriately or did not adhere to their contract. Employment discrimination and wrongful termination cases are difficult to win because as the employee, you will be responsible for proving that the employer acted with a specific illegal motivation.

What is classified as wrongful termination?

  • It is based on religion.
  • It is based on race or ethnicity.
  • It is based on disability.
  • It is based on gender.
  • It is in retaliation for a legal complaint.
  • It is in retaliation against a whistleblower.
  • It does not follow the employer’s own guidelines for termination.
  • It is because an employee refused to commit an illegal act.

How can companies avoid being sued for wrongful termination?

  • Document performance issues and behavioral issues.
  • Make employees aware of issues when they happen.
  • If possible, give employees opportunities to correct problems.
  • Do not imply a promise of job security.
  • State in your employee handbook that employment is at-will.
  • Follow established company procedures for termination.

What are the five fair reasons for dismissal?

Fair reasons for dismissal include misconduct, capability, redundancy, illegality, and any other substantial reason. Your substantial reason has to be legitimate and adhere to company policies.

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