Wrongful Termination & Related Employment Lawsuits

In all states except Montana, employment is “at will.” This is a default rule that means an employee can be terminated at any time without being given a reason, and an employee can leave at any time with no reason given. However, if an employee has a written contract or other documentation promising them job security or that they will only be fired for “good cause,” or similar language, they may be able to claim they are not an at-will employee and bring a breach of contract claim.

In some cases, courts will find an implied employment contract based on statements made by the employer, but this is a more difficult argument. Most employers do not make promises of continued employment. Where an employer puts forward a policy of progressive discipline or states employment will be for a specific period, however, it may be possible for an employee to sue for breach of implied contract after being fired.

There are major legal exceptions to the general rule of at-will employment, and in those cases, an employee may bring a wrongful termination lawsuit. Wrongful termination happens if:

• An employee is let go from a job for illegal reasons, such as discrimination on the basis of a protected category;
• An employee is let go in violation of public policy; or
• An employee is let go in violation of company policy.

For example, Title VII protects employees from being fired for complaining to Human Resources about sexual harassment.

Other appropriate reasons for an employee to bring a wrongful termination lawsuit include being fired for being a whistleblower or being fired because they refused to commit an illegal act. For example, an employee might work for a doctor’s office where they are asked to falsify documents to be submitted for Medicare reimbursement. It would be illegal to fire them if they refuse to commit fraud against the government and bring a qui tam whistleblower lawsuit.

What Does an Employee Need to Prove After Wrongful Termination In Violation of Public Policy?

What an employee needs to prove and the recourse available to them in a wrongful termination lawsuit depends on the reason they were fired. In most states, employers may not fire employees in violation of a public interest. One such public interest involves complaints of discrimination. Accordingly, it is against public policy for an employer to retaliate against an employee by firing them for filing a discrimination claim. Most states will only accept public policy that is expressed either in a state constitution or statute. However, some states allow employees to rely on public policies expressed in administrative rules, professional ethics codes, or social ideas of public good.

There are four general categories within the public policy exception to at-will employment: refusing to perform an act prohibited by state law, reporting a legal violation, engaging in acts that are in the public interest, or exercising a statutory right. Refusing to perform an illegal act would include the refusal to engage in Medicare fraud described above. Reporting a legal violation is also protected by public policy. For example, if an employee choses to report the Medicare fraud, they could not be fired for that. Engaging in acts in the public interest include such actions as performing jury duty. An example of exercising a statutory right is filing a worker’s compensation claim.

Can an Employee Collect Unemployment?

If an employee is wrongfully terminated, they may be eligible for unemployment benefits under state law. Litigation for wrongful termination can take a long time, during which time unemployment insurance benefits can help them get back on their feet. The requirements to file for unemployment compensation vary from state to state. However, in many states, employees may not be eligible for unemployment compensation if they were fired for “misconduct.” This may include stealing, lying, or failing a drug or alcohol test.

Last reviewed October 2024