Wrongful Termination or Rightful Firing? A Business Owner’s Perspective

by Guest Author on April 16, 2014

you're terminatedHiring employees can be fun and exciting.  You bring a great new person on board and you’e excited about showing them the ropes.  But, as we all know, not everyone who shines in an interview is quite as impressive on the job.  And the firing process isn’t usually so fun.

No matter what the situation is, letting someone go is never pleasant, and often results in a bit of anxiety for both parties.  You worry about your soon-to-be former employee’s reaction, and she worries about her future.  It’s an emotionally-fraught exchange, certainly, but the law shouldn’t necessarily come into play.

In most states, the legal term, “wrongful termination” only applies to a small set of circumstances.  Though it’s unlikely that you’re guilty of any of these mistakes, you should be well informed about what they are.

Employment at Will

Unless your employees are in a labor union or have signed a contract which specifies otherwise, their employment is probably “at will.”  This means that you can terminate employment at anytime, without necessarily providing a specific reason.  Basically, you’re within your rights to fire someone for something you can’t really put your finger on.

Be careful, however, about implied verbal contracts.  For example, if you’ve frequently implied that this employee has a long future at the company and have given them positive reviews, it can be shown that you’ve established an implied promise, which has been broken.

That said, I would still advise you to provide a reason for termination.  If you’ve ever been fired from any kind of job (most of us have at some point), you know how it feels to be let go suddenly, for no apparent reason.

Though it may not be your legal responsibility, it might be considered your human responsibility to handle the situation respectfully and try to make it a learning experience for the person – let them know what they could have done differently and express your appreciation for their time and effort.

Even if employment within your company is at will, termination can be considered wrongful under certain conditions.  Though these conditions vary slightly from state to state, these are the most common, nationwide:

1.     Discrimination

Probably the most well-known cause of a wrongful termination suit, discrimination involves firing someone solely for reasons related to their race, skin color, nationality, gender, sexual orientation, disability, religion, or age.  It can be tough for former employees to prove that termination was caused by discrimination – it’s fairly circumstantial.

For someone to prove that discrimination was the grounds for termination, it must be proven that all parts of their job performance were satisfactory and that someone in a similar position with the same performance level was treated differently based on the the aspect in question. 

2.     Workers’ Rights

Whether you’re a brand new startup operating on a shoestring or a Fortune 500 company, your employees have certain on-the-job rights.  There are wage, hour and time off minimums that must be met to be in compliance with state and federal laws.  An employee may not be fired for exercising these rights or speaking up about the fact that they’re not being met.  Each state has their own specifications about worker’s rights – get familiar with yours to make sure you’ve got nothing to worry about.

3.     Public Policy

In this case, the word, “policy” doesn’t actually refer to any written policies – it refers to social norms which most of society abides by.  Public policy could be cited as a reason for wrongful termination if someone was fired for exercising their legal rights (voting for example) or for refusing to do something illegal.

This one mostly comes down to common sense.  An employer cannot dictate actions that wouldn’t normally be his or her role to dictate.  So, though it might make logical sense to you, don’t start going around telling your team that they’re legally required to watch Game of Thrones.

4.     Constructive Discharge

This protects employees from the most passive aggressive of employers, those who essentially force someone to quit by making working conditions unbearable.  It’s a pretty roundabout way to get rid of someone, and is not just ethically reprehensible, it’s actually illegal.  Unbearable conditions can include the physical working environment or pay and/or benefits.  Regardless, it must be proven that the employee’s situation was intentionally made worse in the attempts to coerce them to leave. 

5.     Whistle Blowing

As long as your business is operating legally in every regard, this will never be an issue for you.  This protects employees who report illegal activities or unsafe working conditions within the company.  If someone reports such a problem to a superior within the company or to an outside agency, there can be no retaliation in the form of termination, demotion or any other unfavorable employment changes.

The law around job termination in most states benefits the employer – it’s actually a bit of a challenge for a plaintiff to win a wrongful termination case.  If your company employs people at will, just be careful in the way that you talk to employees about the future, and avoid making any kind of statement that implies definite job security.  But, most of all, make every effort to give all employees a fair shot at success by providing opportunities for improvement and communicating clearly at every turn.

About the Author

Robert Reda is a Chicago business attorney at Reda & Des Jardins, a law firm that specializes in business services for all types of companies, from startups to large corporations.  They also work in estate planning, real estate law and litigation.  For more information, visit Reda & Des Jardins or connect with Robert on Google+.

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