Wrongful Termination

Nick Staley
Firing anyone is difficult. When you add in the potential for wrongful termination, it can be even more complicated and scary. As an HR professional, you are tasked with ensuring that the company isn’t breaking any laws in general, and that includes termination. We will discuss what wrongful termination is and how to make sure you are compliant with all federal and state regulations.

Watch the world’s largest HR encyclopedia be built in real-time

Subscribe to get a weekly roundup email of all our new entries

What Is Wrongful Termination?

In the United States, we have laws that protect employees from being fired unfairly, which is called wrongful termination.  In most cases, wrongful termination occurs when an employee brings a complaint against someone in the company and then gets fired. The employee claims this is in retaliation for the complaint, and that they were therefore wrongfully terminated. Wrongful termination can also occur if a company has a written disciplinary procedure that it is to follow leading up to termination, but elects to terminate the employee without adhering to that procedure.

Most US states operate under at-will employment, meaning that either an employee or the employer may end the employment at any time. However, there are still situations in at-will employment that can result in wrongful termination.

Wrongful termination cases can be sticky, and it’s important to ensure that you follow your company’s established procedures and document thoroughly to mitigate the possibility of a lawsuit.

Why Is It Important to Know What Qualifies as Wrongful Termination?

Here are three reasons why it’s worth your while to learn the ins and outs of wrongful termination.

  • If you don’t know, you can’t avoid it. How can you prevent something if you don’t know what you are trying to prevent?  Do your research—starting with the next section—to see some of the most common examples of wrongful termination.
  • Protect the company. As an HR professional, it is expected that you will play an important role in protecting the company from many types of employment issues. Learning about wrongful termination is part of that.
  • Wrongful termination is low-hanging fruit for employment attorneys. A good employment attorney knows that companies often get nervous and decide to settle outside of court when a wrongful termination case gets brought. You can overcome this by ensuring that you have done everything by the book and have the necessary documentation to back up the company’s decision to terminate employment.

Examples of Wrongful Termination

Here are some of the most common examples of wrongful termination. This list is just an overview, and there are many more pieces that may potentially play into wrongful termination. A simple tip to make sure that you are covering your bases is: if a termination feels rushed or unnecessary, it probably is.

Example 1: Retaliation

This is without a doubt the most common type of wrongful termination. In most cases, wrongful termination occurs when an employee brings a complaint against someone in the company and then gets fired. The employee claims this is in retaliation for the complaint, and that they were therefore wrongfully terminated. The complaint could be related to anything that posing physical, emotional, or mental risk to the employee (think sexual harassment or hostile work environment). This also encompasses whistleblower complaints.

You cannot terminate an employee for bringing one of these issues up. If you choose to terminate an employee after they bring forward a claim, you need to ensure that you have documentation showing that you were going to let them go prior to the claim being made. If you choose to exercise your at-will statute without such documentation, know that you could end up on the wrong side of a wrongful termination lawsuit.

Example 2: Violation of Leave

If an employee is on protected leave (FMLA, military, etc.) you can only terminate their employment based on very specific factors. Here is a brief article that outlines the exact reasons you can terminate someone while they are on FMLA.  Basically, the only reason you can terminate someone while they are on leave is if their position would have been eliminated regardless of whether or not they were on leave. Remember that most leaves are protected by federal and state law, and terminating someone for taking leave may result in a wrongful termination lawsuit.

Example 3: Discrimination

Legally, you can’t terminate someone’s employment based on discriminating factors, such as age, race, gender, sexual orientation, etc. If you don’t have other good reasons to terminate their employment, don’t.

How to Ensure You Don’t Wrongfully Terminate an Employee

Step 1: Document, Document, Document

Make sure you thoroughly record everything related to the termination. This might include performance issues, disciplinary plans and results, coworker statements, or the employee’s own statements, if they are threatening others or creating a hostile work environment. Your documentation should paint a clear picture of what the problem was and the steps you took to resolve the situation before termination.

Step 2: Audit for Compliance

This may be the most important step. You want to make sure that you have all the necessary documentation and anticipate other issues that may arise. Make sure you are aware of any potential discrimination issues that may arise and that your termination reason can’t be linked back to that. For example, if an employee claims that their supervisor is harassing them, and you start your investigation only to have the supervisor request to terminate this employee, you may have reason to believe that the supervisor is only wanting to terminate this employee due to a complaint being filed, which could lead to a retaliation claim. Make sure you have all of the context surrounding a termination.

Step 3: Have the Conversation

This is the most difficult part. No one likes having to let someone go. Be succinct but clear in your conversation and stick to the facts. Have an idea in your head of how the conversation will go, and role play it if necessary.

Step 4: Include a Severance Agreement (Optional)

A severance agreement is a document that states the employee agrees with the reason for termination, and usually includes a small sum of money. This isn’t always necessary, but is a great way to mitigate a lawsuit. Severance agreements are legally binding, so if they accept the severance agreement and money that comes with it, they can’t argue the details in court.

Watch the world’s largest HR encyclopedia be built in real-time

Subscribe to get a weekly roundup email of all our new entries

Questions You’ve Asked Us About Wrongful Termination

Does an employer have to tell an employee why they were fired?
Not necessarily. Assuming you are working in an “at-will” employment state, an employee can be terminated with or without cause at any time. In our opinion, it is best to give a reason if you have one. If you are letting them go due to reasons that haven’t been documented yet, you can “at-will” the employee.
Is it hard to prove that an employee was wrongfully terminated?
It depends. If an employee has brought some sort of complaint against the company or their manager, and then is terminated relatively quickly after that (generally within 90 days), that’s a red flag to any employment attorney. To mitigate the risk of wrongful termination, make sure you document everything, from performance to attitude to the complaint they brought. This protects both the company and the employee (by ensuring that their rights aren’t being violated) in the long run.
Nick Staley

Nick is a certified HR professional holding an SPHR and SHRM-CP. Nick has built HR teams from the ground up as well as worked for big corporations. Nick enjoys consulting and training those who are just getting started in HR. When not working, he enjoys spending time with his family.

Want to contribute to our HR Encyclopedia?

Posts You Might Like

What is People Management Software?

What is People Management Software?

People management software sounds important, but what exactly does that mean? Does your business need it? What businesses benefit most? All these questions and more are answered as we dive into the fascinating world of people management software and determine what’s best for your company.

Read More »
The Ultimate Guide on How to Manage Employees in a Small Business

The Ultimate Guide on How to Manage Employees in a Small Business

When it comes to running a small business, we know that managing employees is often one of the most difficult tasks. People are complicated, and finding a way to keep your employees happy and productive can be challenging. This article shares specific advice for what you can do in the three phases of the employee lifecycle to get the most out of each employee.

Read More »

Want to join our network of contributing HR professionals?

Scroll to Top

Submit a Question