Wrongful Termination: Meaning & Examples

Wrongful Termination

Occasionally, there are situations where managers or business owners might fire their employees. Although it is quite an unpleasant situation that most people face in life, it becomes more depressing when you are fired for the wrong reasons. Most business owners terminate their employees when there is substantial reason to back up their decision. Nevertheless, terminating an employee’s contract wrongly can open legal actions if the matter is not amicably solved. The legal consequences include expenses, punitive damages, and court-ordered payments. Furthermore, some cases might lead to statutory penalties such as fines, etc. Every business owner knows that job termination can be hard for both the owner and the employee. Therefore, understanding what wrongful termination is all about is paramount, especially if you think you are facing one. In this article, you will discover detailed information regarding wrongful termination. Besides this, you will also learn how to avoid and take advantage of wrongful termination if you think you are illegally fired. If you are ready, let’s get the ball rolling.

What is Wrongful Termination?

Anyone can have an idea of what wrongful termination entails. The term is self-descriptive since it involves our day-to-day words. However, most times, commonly used words tend to be confusing since they are generalized. 

Wrongful termination usually occurs when an employer violates a company’s law or policy by ending or terminating an employee’s contract. There are many words used interchangeably for wrongful termination; these include wrongful discharge or wrongful dismissal.

In the United States, laws guiding wrongful termination vary from one state to another. Most of the states recognize at-will employment. It means neither the employer nor employee needs a concrete reason to terminate their employment. At-will employment is a standard in the United States, but not all states allow it.

An employee can decide that their employment was wrongly terminated, especially when there is discrimination involved. This naturally happens when a public policy or a company policy in a state is not followed rightly.

Jeff Bezos Career Advice
Jeff Bezos Career Advice

Besides this, there are other reasons people get wrongful termination, including whistleblower, committing an illegal offense, or complaining about workplace issues. Furthermore, discrimination can also contribute to wrongful termination if such an employee was fired based on nationality, color, sex, race, sexual orientation, age, religion, or gender. 

Let’s take a look at these reasons why an employer might wrongfully terminate an employee’s contract.

Examples of Wrongful Termination

An employee’s termination is considered lawful if it violates federal laws, state laws, or written or unwritten laws of a company. Rules exist to protect workers from wrongful termination. A termination is considered unlawful if it meets any of the criteria below as stipulated by law.

  • Breach of Contract

When a company violates its written contracts or acts in a manner that conflicts with its employee handbook, a breach of agreement occurs. For instance, an employer terminates an employee’s contract after a verbal warning when the handbook stipulates a written notice after any verbal warning. 

  • Harassment

Another reason for wrongful termination is harassment, which creates a hostile working environment. Harassment includes insulting comments about sexual orientation, disability, religion, age, race, or gender. Additionally, unwelcomed advances, retaliation based on the response, offers from job-related benefits are also examples of harassment. 

Other forms of harassment include a coworker creating an unhealthy working environment either through their words or action. It doesn’t matter if their comments are discriminatory or not.

  • Discrimination

Discrimination is a targeted dismissal based on sexual preference, disability, race, gender, religion, or age. These discriminations include written and verbal discriminatory practices. For instance, discrimination can be in the form of correspondence from an employer, which contains derogatory mention of gender, race, or age.

  • Constructive Dismissal

Termination occurs when an employer manipulates an environment intentionally to influence the employee to quit their job. Constructive dismissal also involves changing the employment terms without any notice. There are many examples, but the common one is a demotion or pay cut without a concrete reason. It also includes changing an employee’s location without adequate notice to allow the individual to prepare beforehand. 

  • Office Retaliation

Retaliation usually occurs when an employee’s contract terminates for reporting any discrimination or illegal behavior or cooperating with legal authorities for what is right. Retaliation is considered a wrongful termination when an employee is fired for working with investigators who are uncovering unethical activity in a company. 

  • Public Policy Violation

Violation of public policy occurs when an employer terminates an employee’s contract ignoring or violating general laws. An example of such public laws is the Federal Families and Medical Leave Act. For instance, when an employee gets a letter of termination when they are on medical leave. 

  • Whistleblowing

It is illegal to fire whistleblowers, especially when they report illegal actions or violations of federal and state laws. Today, a lot of wrongful termination has taken place due to whistleblowing sticking their neck out. An example of wrongful termination based on whistleblowing is when an employee reports a discriminatory situation against his current company.

  • Committing Unlawful Acts

In a company or organization, certain individuals are sincere and transparent in their dealings. An employer doesn’t expect such an individual to participate or commit illegal acts, which can be a dent in their personality. For instance, an employer requesting its employee to provide forged documents to secure a project or contract.

Dealing with Wrongful Termination

Rather than relying on a specific wrongful termination law, works get protection from both sides and federal regulations. Besides this, employees get security through company policies. If an employee thinks they are wrongly terminated, they have several ways to seek recourse. If you find yourself in such a situation, you need to remember both state and federal laws prohibit discrimination.

Furthermore, contract laws might violate your employer breaches your agreement, or disregard your employment policies. To deal with wrongful termination, here are a few things to consider. 

  • Understand your state and federal laws on what triggers wrongful termination. Ensure you know the various process and steps to take.
  • Review your employment contract to ascertain that the terms of the agreement aren’t violated. Check if there is any violation of wages, commission disputes, or hour overtime to verify it meets what you are facing.
  • Seek clarification when things seem complicated. Union and labor departments can provide relevant advice when you suspect your termination was wrongful.
  • Consult the HR department for further clarification, even if you are not working in that company. You can ask how the termination process works and the benefits you are entitled to as an employee.

Tips for Dealing with a Wrongful Termination

If you believe you were wrongly terminated in your place of work, you can go to court. However, you need to get the right information to win your case. These tips come in handy when you want to deal with wrongful termination. 

Significantly, where necessary, you can seek the services of a professional lawyer to handle your wrongful termination. 

  • Gather all relevant information that might help your case. Document everything, including written and verbal claims that might help overturn your case.
  • Tread cautiously even with your evidence; it doesn’t matter if you still work in that place or not. Avoid talking about your next move to people or those in your workplace.
  • Endeavor to perform research to learn what might have caused the wrongful termination. Your decision can help you discover the various options available to you.
  • Finally, hire a professional attorney that understands wrongful termination. Today, most labor attorneys offer a free consultation to help pursue their case and take necessary actions.

Wrongful Termination vs. Unfair Termination

Most times, people tend to confuse unfair termination with wrongful terminations. These two terminations are quite different.

Wrongful termination is usually a breach of contract or policy. A typical example many will relate with is an employer dismissing someone outside their employment letter. However, there are situations where an employer might not notice and terminate their employment contract—for instance, issues regarding gross misconduct. Furthermore, for any violation of contract or obligations, the employee has every right to claim damages. 

An unfair termination is one that is a right, according to the Employment Rights Act. According to the act, termination is considered unfair if:

  • The employer doesn’t act reasonably in treating the situation as he or she ought to.
  • The employer doesn’t follow due process in the termination.
  • The reason for termination does not include in the scope of employment.

Peradventure, an employee finds a lawsuit, and the Employment Tribunal finds the employee was unfairly dismissed; the court may order re-engagement, reinstatement, or compensation. Nevertheless, to submit a claim of unfair dismissal, an employee needs to offer a minimum of two years’ service to that organization. 

However, if the matter hinges on pregnancy where the employee was dismissed, the Tribunal will automatically consider the dismissal unfair without considering its length of service.

How to File a Wrongful Termination Claim 

An employee can only file for a wrongful termination claim when their employer has served them a notice of termination. To begin your claim, you need to submit relevant documents to the Equal Employment Opportunity Commission (EEOC). You need an employment lawyer to help you through the process.

There are essential documents required to process a wrongful termination claim. You need to give your lawyer these documents to pursue your claim.

  • Company manuals and handbook
  • Employment contract letter
  • Company memoranda 
  • Documents of past job performance
  • Deposition statements of potential witnesses
  • Documentary of evidence related to your termination

Normally, the statute of limitation for filing a wrongful termination claim is 180 days from your termination date. However, if the violations are related to any state or federal right violation, then the claim takes 300 days from violations.

Wrongful termination claims are filed for two significant reasons:

  • To get punitive or compensatory damages for actions taken by the employer.
  • To be reinstated to the previous position without any retaliatory actions.

An employee can prove wrongful termination against their employer following existing state and federal laws in most situations. Nevertheless, a professional lawyer can help an employee recover their compensation after a wrongful termination.

Solution on Wrongful Termination Claims 

Employees can file for claims when their employers terminate their employment after a contentious dispute or under complicated terms. Naturally, employers would be nervous whether the claim is legitimate or not without considering the complaint’s consequences. 

When an employee pushes for a wrongful termination claim, employers also have the legal right to defend their actions. Employers can seek a solution through court or out of court settlement depending on the claims’ gravity. However, it is hard to find concrete solutions, but a reasonable attorney can determine what is best for an employer.

An attorney can provide various ways for a wrongful termination to be solved. Here are a few solutions to solve a wrongful termination.

  • Severance package – although it is not necessary, a severance package can be a way to resolve a wrongful termination claim. An employer might seek a solution if they want to avoid legal processes. 
  • Pay damages are the best solution in most cases; an employer’s actions might violate the employees’ rights. In such a case, the employer might consider paying punitive or statutory damages if the legal process would be more costly.
  • Negotiation – alternatively, an employer might seek negotiation when a wrongful termination claim is provided. Both parties can work together and develop a contingency place to avoid lengthy and costly litigations. 

It is never easy to find the best solution when dealing with a wrongful termination claim. The issues can be legally complex, costly, and overwhelming for both parties. However, it is essential to consult a professional attorney that understands both state and federal employment laws when dealing with wrongful termination. Resolving wrongful termination isn’t an easy task, but there are always options available to avoid costly penalties and negative consequences.

Cost of Wrongful Dismissal Claims

It is never easy trying to get a solution for wrongful dismissal. It can be a traumatic experience when you know you did nothing wrong. Besides this, such a wrongful termination claim can be costly, especially when you have a financial challenge. Before you consider a wrongful termination claim, you need to assess the costs.

Fixed Fees

Some lawyers will agree to a fixed fee, which comes with other conditions. Actually, there will be a timeframe when such an amount will expire if the case is not solved. This option gives employees filing for wrongful termination claims to work according to their budget before thinking of the next step.

Difficulty Evaluating Costs 

Besides using a fixed fee, an alternative option is to hire legal assistance. You can pay such a lawyer on an hourly basis. Nevertheless, it can be challenging when you calculate the costs because many things can last longer besides the hours needed to prepare for the case. 

It is hard to get an accurate cost here because:

  • Each lawyer has different hourly rates.
  • Will the claim be settled immediately, or will it go to court?
  • How fierce will your employer be during the case?
  • Your case might require numerous documentation and witnesses to prove your point.

No-Win-No-Fee Cost

Another option is the no win no fee package; when you agree to such a package, your lawyer gets up to 35% of your compensation as their legal fee. The fee will be deducted from your compensation once the lawyer wins the case. 

It doesn’t matter the amount of work involve in the claim. For instance, if you file a wrongful termination against your employer and sign a “no win no fee” package, the lawyer will take the percentage agreed on when you win the case. Assuming you were awarded $20,000 for wrongful termination, you would get $13,000, whereas your solicitor will get $7,000 if the agreement was 35%.

Employee Rights During Termination

As an employee, you are entitled to certain rights in the course of termination. It doesn’t matter if the termination is wrongful or not. Various state laws stipulate that employers are under obligation to pay an employee for any work performed. Here are some rights employees can expect if their employment is terminated.

Termination Notice

Each state in the United States has employment-at-will laws, which protect employees from unlawful termination. An employment-at-will law allows employers to terminate an employee for any reasons besides discrimination legally. Nevertheless, most employers have provisions in their company’s handbook that an employee will receive verbal and written warnings before any termination.

Final Pay

States laws vary regarding final pay distribution. However, some states require employers to provide the last paycheck to employees upon termination. In other others, employers are allowed to issue payment on the next payment date. 

Unemployment Benefits

Employees are entitled to unemployment benefits for any termination that isn’t their fault. It would help if you found out what the laws in your state say because each state has its own regulations regarding unemployment benefits.

Health Insurance

Another benefit that employees enjoy after termination is health insurance. According to the Consolidated Omnibus Budget Reconciliation Act (COBRA), states must provide health insurance for employees whose employment is terminated pending when they get a new job.

Discrimination 

Finally, the Equal Employment Opportunity laws mandate that an employee cannot be terminated based on sexual orientation, religion, race, or gender. Such termination is considered unlawful.

Conclusion

So far, in this article, you have learned everything worth knowing about as it relates to wrongful termination. Wrongful termination is a huge legal battle that usually involves an employee against his employer when they feel their employment was wrongly terminated. 

Wrongful termination is a situation where an employee claims a breach of their employment contract for actions they didn’t commit. It is quite different from unfair dismissal or termination since it only looks at breaches in an employment contract.

In a nutshell, it happens when an employer terminates the contract of his employer.

  • Without any justifiable reason.
  • Without any prior notice as indicated in the contract.
  • Without giving them any statutory notice.

For an employee to make such a claim, they must provide evidence of a breach of their contract or any state or federal laws in their termination. Besides this, they have to prove evidence of any loss due to the wrongful termination. These claims must be within 90 days of their termination.

Aside from breach of contract, issues such as discrimination, whistleblowing, public policy violation, committing unlawful acts, harassment, office retaliation, and constructive dismissal can lead to wrongful termination.

There are always legal challenges against wrongful terminations, especially when an employee strongly believes they were wrongly accused. These legal battles could talk from a day to months, depending on the severity of the termination. Furthermore, both parties have to consult and hire solicitors to help them out.

These solicitors charge a lot of money, which can pose a problem for most employees. However, an individual filing a claim on wrongful termination can negotiate with his legal team on their services’ cost. Some solicitor prefers to charge based on the percentage that their client will get. 

Nevertheless, filing a claim is costly as you have to submit various documents to support your claims. On the part of a business owner, it can damage the organization’s reputation if the claims are proven right. If the claims were right, the employer has to pay certain fines and penalties to its employee.

To avoid such lengthy legal costs and a dent in their reputation, most employers tend to seek an out-of-court settlement, especially when the case will go against them. Finally, every business owner understands how hectic wrongful termination can be for both parties – the owner and employee. Therefore, it will be beneficial if organizations can avoid anything that might warrant wrongful termination. 

Also read Can you collect unemployment if you quit job due to stress?

Wrongful Termination: Meaning & Examples

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