HR managers understand that they need to thoughtfully consider workplace terminations and execute them with caution to prevent costly legal cases. Ending an employee’s contract is hard on its own, and it becomes even more difficult when faced with a potential wrongful termination lawsuit claiming wrongful dismissal, discrimination, revenge, or other violations of federal and state labor laws.

Frequently, HR managers expose themselves to unnecessary blame by rushing decisions, lacking thorough investigations, or having common misunderstandings about the legal rights of employees. However, this can be prevented by understanding wrongful termination.

What is Wrongful Termination?

Simply put, ‘wrongful termination’ refers to the illegal firing of an employee. Frequently, the employer has the authority to hire and fire a team member; nevertheless, there are certain circumstances in which a termination is deemed unlawful according to the law. An example in California is when an employer is assumed to hire a team member at will according to the labor code. Therefore, either the employer or the worker could terminate the contract without justification or advance notice.

In some cases, a legally justified termination can be deemed illegal. For instance, a human resources manager could choose to terminate an employee three days following a report of workplace discrimination. This situation could be viewed as a form of revenge towards the team member who raised the complaint. The team member’s lack of performance may lead to termination, making it difficult to defend against a claim unless the HR manager can prove it.

Hence, HR managers must comprehend the reasons for wrongful termination. Otherwise, showing that their actions were just in the firing of each team member would be difficult. Fortunately, they can minimize the legal liabilities that may arise from ending the contract.

4 types of wrongful termination

Unfair dismissals can lead to increased financial risks for your company, as they contribute to higher employee turnover rates. By steering clear of these four main forms of violations, you can steer clear of accusations of wrongful termination toward an employee.

1. Contract violations

Terminations must adhere to all terms stated in the written contracts you have with employees. For instance, businesses may occasionally provide job opportunities for a set period.

If you employ a salesperson with a five-year contract based on certain sales targets, you are obligated by law to keep the employee for the duration of the contract if they achieve the goals. Despite having valid financial motives for ending the employee’s tenure before the five-year mark, it is illegal to do so.

Another instance is a contract that employs with the condition of being terminated for a “justifiable reason.” This essentially establishes an ongoing employment contract that can only be terminated for poor performance or violation of company policy.

All agreements mandate that the involved parties must behave in a trustworthy manner. Thus, breaches of contract can be regarded as those terminations showing bad faith or malice.

2. Breaches of implied contracts

Certain states acknowledge implicit contracts, which are promises that have the legal force of a contract, as a special case in at-will employment. An implicit agreement may form through corporate guidelines, staff manuals, spoken guarantees, and additional organizational declarations.

For instance, if your attendance policy requires a system of progressive discipline for unexcused absences. Workers will get a verbal caution for missing work once, a written warning for the second absence, and will be fired for the third. You have an employee who consistently has a negative attitude and frequently doesn’t show up for work, so you choose to terminate their employment. The employee might argue that their termination was illegal because your disciplinary policy promises three chances before dismissal.

Verbal promises of continued job security can also give rise to implicit agreements for ongoing employment. Saying to an employee, “You have a position for as long as you want it,” or, “If your performance remains consistent, you could be leading the department next year,” might suggest a commitment to ongoing job opportunities.

3. Federal and state employment law violations

Numerous regulations safeguarding the rights of employees contain clauses prohibiting wrongful termination. It is prohibited to dismiss staff as a form of revenge for reporting grievances, cooperating in inquiries, or engaging in their entitled actions according to these legislations, which comprise:

The Fair Labor Standards Act (FLSA) – Prohibits firing an employee for asking for correct or timely compensation or bringing up other issues related to wages and hours.

The National Labor Relations Act (NLRA) – The NLRA guarantees employees the right to engage in union activities and talk about workplace conditions both during and after work hours. These safeguards also apply to comments on social media concerning your company, so be cautious when addressing employee statements.

Title VII of the Civil Rights Act (Title VII) and ADA – Ensures that employees are entitled to a discrimination and harassment-free workplace related to disability, gender, race, national origin, religion, age, and other protected categories. You are not allowed to dismiss an employee for speaking up, filing official complaints, or engaging in those actions.

The Equal Pay Act (EPA) – Prohibits terminating employees for seeking equal pay for equal work or reporting pay discrimination.

The Family and Medical Leave Act (FMLA), Pregnancy Discrimination Act, and Uniformed Services Employment and Reemployment Rights Act (USERRA) – Employees have the right to protected leave for specific conditions and events. It is not permissible to terminate employees for asking for or using leave that they have a legal right to.

The Occupational Safety and Health Act (OSHA) – Protects employees from being terminated for reporting unsafe working conditions or concerns. They cannot be terminated for utilizing workers’ compensation benefits or taking leave due to injury.

State employment laws – Each state has numerous regulations offering comparable safeguards to take into account before firing a worker.

4. Conflicts with public policy

In addition to safeguarding workers, the government also enforces policies to protect society and uphold basic human rights. This includes comprehensive protection from discrimination and also safeguards employees from being coerced into engaging in illegal or unethical behaviors or facing retaliation for reporting them.

An instance is the Whistleblower Protection Act, which safeguards federal workers from being fired for reporting federal mismanagement or corruption. Workers in the private sector are also protected as whistleblowers through laws overseen by OSHA, and the U.S. Occupational Safety and Health Administration.

Guest post.

Editor’s note: Labour legislation differs from country to country so readers are advised to check with legal practitioners in their country for legal advice that is relevant to their circumstances.