Wrongful Termination

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Wrongful termination describes a situation in which an employee has been terminated from his job, and the termination breaches terms of his employment contract, or is otherwise not in accordance with state or federal employment laws. This legal term was born with the National Labor Relations Act of 1935, which made firing an employee based on race or creed illegal. To explore this concept, consider the following wrongful termination definition.

Definition of Wrongful Termination

Noun  

  1. Termination of an employee for a purpose that is not in accordance with federal or state employment laws.

Origin

National Labor Relations Act of 1935

What is Wrongful Termination

Wrongful termination, also referred to as “wrongful dismissal,” or “wrongful discharge,” involves the termination of an employee without just cause. While most people who have been fired from their jobs feel the dismissal was without just cause, wrongful termination actually refers to dismissals for a narrow set of reasons. In fact, wrongful termination refers to termination involving some type of discrimination, which violates the employees’ civil rights.

Wrongful Termination Laws

Wrongful termination laws primarily address issues of firing an employee improperly, whether in violation of terms of his employment contract, or for a discriminatory purpose. In the United States, employment has migrated to an “at-will” basis, releasing many employers from the terms of an employment contract. Wrongful termination laws seek to protect employees from being taken advantage by employers. For instance, John’s employer fires him the day before he is set to get a substantial raise, so as to avoid paying the higher wage. It is this type of dismissal that may be considered “wrongful.”

At-Will Employment

In the United States, employment is “at-will,” unless there is a specific employment contract entered into between employer and employee. At-will employment means that the employer does not need a specific reason to dismiss an employee. If an employer dismisses an employee for a specified reason that is improper, the at-will doctrine does not apply.

Improper terminations include dismissals without good cause after a written or implied contract for employment has been entered into, and terminations that violate the implied covenant of good faith and fair dealing.

Employers’ Right to Dismiss Employees

Many people are unaware that, in most situations, employers have a right to dismiss employees without giving any reason at all. This is referred to as “at-will” employment. The laws of most states protect employers’ right to dismiss employees. This means that an employer is not required to have good cause to dismiss an employee, unless there is an employment contract, or the dismissal violates the law.

Employers who tell employees, whether during the hiring process, or through an employment manual, that they are at-will employees, can rely on this statement in the event a wrongful termination lawsuit arises. Some employers actually have their new employees sign an “at-will” contract before employment begins in order to protect themselves. Employers also have the right to fire employees for “just cause,” which refers to misconduct by the employee.

Constructive Termination

In order to avoid certain consequences of firing an employee, some employers simply make working conditions difficult or miserable in an attempt to force the employee to quit. This might involve a change in work schedule, decreased work hours to a level, and otherwise making the job intolerable. This practice is called “constructive termination,” or “constructive discharge,” and it is against the law.

If an employee quits his job under such conditions, he will be denied certain benefits, such as unemployment benefits, and the ability to file a lawsuit against the employer, unless he makes a claim of constructive termination. In order to successfully prove a constructive termination claim, however, the employee must prove certain elements, including:

  • The work environment was so adverse that any other reasonable employee would have also felt the need to resign
  • The employer either acted with the intent to cause the employee to resign, or the employer had knowledge of the bad working conditions, and made no attempt to remedy the situation

Example of Constructive Termination

Maya has been working at Speedy Dogs, a fast food establishment, for about two years when she had a serious disagreement with her supervisor. The supervisor wants to fire Maya, but the corporation has a policy of avoiding unemployment claims, so she cannot fire her without just cause. Instead, the supervisor begins cutting Maya’s hours down, from her usual 40 hours per week to 30 hours for a couple of weeks, then to 15 hours or less after that, in the hope that Maya will quit. During that time, the supervisor berates Maya constantly, and tries to write her up for things she didn’t do.

When Maya finally quits the job, her claim for unemployment is denied (because people who voluntarily quit their jobs are not eligible for unemployment benefits). She appeals the decision, claiming that she was constructively terminated. Maya would need to submit proof, which may be in the form of schedule changes or other paperwork showing how she was mistreated, and she can submit witness statements about the fact that she did her job well, and that the supervisor intentionally made Maya’s job miserable. In this example of wrongful termination, the employer has engaged in constructive termination to purposely cause the employee to quit.

Retaliatory Termination

Retaliatory termination refers to firing an employee as revenge for an employee’s protected activity. Protected activities include such acts as refusing to participate in something illegal, reporting sexual harassment or other illegal act, or seeking to join or form a labor union. If an employer fires an employee for taking part in any of these activities, it is considered retaliatory termination, which is a form of wrongful termination.

There are other acts for which an employer cannot generally fire or demote an employee. These include:

  • Taking a qualified medical leave of absence
  • Serving in the reservist military
  • Taking time to vote
  • Taking part in an investigation into the unlawful practices of the employer
  • Attending jury duty

Example of Retaliatory Termination

Rob reports to the EPA that his employer is illegally disposing of toxic chemicals. When the company is notified of a pending investigation, Rob is fired, ostensibly because his work is sub-par. Rob can show that his job performance reviews were consistently excellent prior to his termination. In this example of wrongful termination, Rob was clearly fired in retaliation for his report to the EPA, which is illegal.

Wrongful Termination Examples

Wrongful termination lawsuits abound when employees are fired for reporting such things as violations of federal and state regulations, and for taking qualified medical leave. The following real cases are examples of wrongful termination.

Employee Fired for Reporting EPA Violation

Paul Blakeslee worked for Shaw Environment and Infrastructure, supervising more than 40 employees on a $100 million contract to maintain U.S. Army facilities at Fort Richardson and Fort Wainwright in Alaska. When Blakeslee learned that one of the project managers owned part of a private company that was leasing equipment to Shaw without going through the required competitive bidding process, he decided to report what he believed to be fraudulent activity to the CEO of Shaw.

The project manager learned of Blakeslee’s plan to write a letter to the CEO, and threatened to lay him off. Blakeslee was fired after he sent the planned letter, being told the company was eliminating his position to save money. Shaw investigated Blakeslee’s claims, finding that the project manager had indeed committed fraud, and acted in conflict of interest with his job, and fired the manager, but refused to reinstate Blakeslee.

Blakeslee filed a civil wrongful termination lawsuit against Shaw, claiming he was the victim of wrongful termination, having been fired in retaliation for his report, and claiming age discrimination. Following the four-year lawsuit, a jury ruled in favor of Blakeslee, and awarded him over $45,000 in lost wages, and over $400,000 in damages for emotional distress. In addition, Blakeslee was awarded $2.5 million in punitive damages.

Employee Fired for Reporting Safety Violation

Matthew Niswonger worked for PG&E for nearly 8 years when his supervisor ordered him and his crew to replace a broken electrical pole without first shutting down the power. While the crew did as they were told, they were placed in grave danger, as a cross-arm broke and live, high-voltage wires nearly electrocuted them. Fortunately, none of the crew members were injured during the completion of the job. Once the job was completed, Matthew made a safety complaint, as he felt unsafe to perform some of the jobs as directed by the supervisors.

Matthew began experiencing anxiety, panic attacks, and depression, for which he was granted medical leave. When he was asked to return to work a month later, Matthew refused, and he was fired in September, 2011. Matthew filed a wrongful termination lawsuit against the company for wrongful termination, asking for lost wages, loss of benefits, and emotional distress.

Following a trial that lasted over three weeks, the jury determined that PG&E had indeed fired Matthew in retaliation for his safety complaint, which was made in good faith. He was awarded nearly $600,000 in lost wages and lost benefits, and $500,000 for emotional distress.

Related Legal Terms and Issues

  • Civil Lawsuit – A lawsuit brought about in court when one person claims to have suffered a loss due to the actions of another person.
  • Covenant of Good Faith and Fair Dealing – A general presumption that the parties to a contract will deal with each other honestly, fairly, and in good faith.
  • Damages — A monetary award in compensation for a financial loss, loss of or damage to personal or real property, or an injury.
  • Discrimination – The practice of unfairly treating different categories of people, especially on the grounds of ethnicity, national origin, gender, race, religion, and sexual orientation.
  • Emotional Distress – A negative emotional reaction, such as anguish, humiliation, or grief, resulting from the conduct of another individual. Also referred to as “mental anguish.”
  • Punitive Damages – Money awarded to the injured party above and beyond their actual damages, usually for the purpose of punishing the wrongdoer for outrageous misconduct in a civil matter.
  • Qualified Medical Leave – An entitlement of eligible employees of covered employers to take unpaid, job-protected leave for specified family and medical reasons.
  • Trial – A formal presentation of evidence before a judge and jury for the purpose of determining guilt or innocence in a criminal case, or to make a determination in a civil matter.