Human Resources News & Insights

7 Facts every HR manager should know about wrongful discharge


A down economy is an up time for wrongful-discharge lawsuits by employees who have been let go — and are angry about it.

That’s why every employer should know and understand the seven relevant legal facts about wrongful discharge:

  1. Although many employment relationships are “at-will,” meaning that either the employer or the employee may terminate the relationship at any time with or without reason, that doesn’t give employers a blank check. If an employer terminates an employee, even one who is at-will, in violation of federal, state, or local anti-discrimination laws, that’s illegal.
  2. Federal anti-discrimination laws protect employees from being discharged or otherwise penalized with respect to the terms and conditions of employment on the bases of race, color, national origin, sex, religion, disability, pregnancy, and age. State laws may mirror these categories of protections and, in some instances, be tougher than the federal laws.
  3. Not all wrongful-termination claims are discrimination-based. An employee who given a contract of employment, either written or implied, and is terminated before the expiration of, or in violation of, the contract, may be able to bring a claim for wrongful discharge and breach of employment contract.
  4. Wrongful discharge suits may also be brought in situations where the employer has retaliated against an employee for exercising a right that is supported by the law. For example, if an employee is terminated because he or she reported the employer to a governmental body for violation of workplace safety laws, the employee may be able to successfully bring a wrongful discharge lawsuit.
  5. If an employee refuses an employer’s order to perform an illegal act and is subsequently terminated, there may be a wrongful discharge cause of action. For example, if a supervisor orders an employee to perform a duty in violation of safety laws, the employee may refuse and cannot be fired for refusing.
  6. An employee who’s terminated for taking time off under a law which gives him or her a legal right to have that time off — such for voting or military service — may also have a wrongful discharge cause of action.
  7. An employer who has not followed specific disciplinary and termination policies that are in place can also face a wrongful-discharge suit. For example, if an employer has a handbook that states that employees are entitled to receive two written warnings for misconduct or poor performance before they are terminated, and an employee is terminated after receiving only one verbal warning, that employee may be able to successfully bring a wrongful discharge action.
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  • rukidding

    Does anyone know a good resource to research furloughs or general salary cuts? We need to reduce our payroll. I have found lots of articles on SHRM, but I was looking for actual sample policies and letters regarding implementing the reduction in salary.

  • MH

    R U Kidding–check your state Chamber of Commerce. CalChamber had some good resources but I don’t have access to those any more to know if they had anything on salary cuts or furloughs. One thing to remember is that you still may want to have an attorney look all of that stuff over before it goes out. In this case it would pay to be safe than pay more and be sorry.

  • HRinIA

    rukidding: has some excellent resources, including sample policies and general information on legal implications and best practices for that kind of stuff. Also, DOL (on potential wage and hour issues) and IRS (on tax issues) have issued guidance documents that are helpful, too.