Ultimate Guide to Wrongful Termination
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What Is Wrongful Termination?
Wrongful termination occurs when an employee was improperly fired or terminated from their job. The rules regarding wrongful termination vary from state to state. The majority of states follow the rules for at-will employment, which may hinder an employee’s claim for wrongful termination.
What Is At-Will Employment?
At-will employment is employment wherein the employer may fire an employee for any reason the employer sees fit, as long as the firing is not done for an improper purpose. If an employee is at-will, any reason, including no reason, is a proper basis for termination. Therefore, as long as the firing was not done for an improper purpose, an employee may not have a claim for wrongful termination if they were classified as an at-will employee at the time that they were fired.
Exceptions to an At-Will Employment Termination
There are many exceptions to at-will employment terminations that protect an at-will employee, or any employee, against termination for an improper purpose. These exceptions include the following:
- Discrimination: Employers may not fire any employee on the basis of discrimination. If you believe that you were fired because of your race, color, national origin, gender, religion, age, disability, pregnancy, or genetic information, you may have a claim for wrongful termination based on discrimination. There are strict timelines for filing a wrongful termination claim based on discrimination, therefore, it is important to act quickly once you have been terminated. Typically, you must file a complaint of discrimination with a state or federal agency before you are allowed to sue your former employer in court.
- Retaliation: Employers are forbidden from terminating their employees who have engaged in legally protected activities. These include whether the employee filed a claim of discrimination or is participating in an investigation for discrimination. If you are terminated based on retaliation, you must prove all of the following:
- You were engaged in a legally protected activity, such a filing a complaint with the Equal Employment Opportunity Commission or formally complaining to your employer about harassment or discrimination;
- The activity prompted your employer to act against you; and,
- You were subsequently terminated as a result.
- Contractual Employees: If an employee is employed under an employment contract, the employee may only be terminated for grounds stated in the contract. If the employee is terminated for reasons outside of that contract, they may have a claim for wrongful termination.
- Illegal Acts: An employer is not permitted to fire an employee because the employee committed an illegal act.
- Family or Medical Leave: Federal law permits employees to take a leave of absence for a specific family or medical problem. An employer may not terminate an employee who takes family or medical leave under the Family and Medical Leave Act.
- Not Following the Company’s Own Termination Procedure: If an employee handbook or company policy provides a procedure for termination of employees and the employer fails to follow this procedure while firing you, then you may have a claim for wrongful termination.
- Breaches of Good Faith and Fair Dealing Covenants
Filing a Lawsuit for Wrongful Termination
If you believe you have been terminated wrongfully, the first step in filing a lawsuit against your employer is to determine your “cause of action.” If your termination was based on any of the following exceptions to termination as an at-will employment listed above, then you may have a basis for filing a wrongful termination lawsuit.
The second step is to file a claim with the Equal Employment Opportunity Commission (EEOC), either by mail or in person. In nearly all cases, you must first file a complaint with the EEOC before filing a lawsuit. The complaint must be filed within 180 days. This deadline will be extended to 300 days if the cause of action is also covered by a state or local anti-discrimination law. A complaint filed with the EEOC must include:
- Your name, address, and telephone number;
- The name, address, and telephone number of the alleged discriminatory employer, employment agency, or union, and number of employees or union members; and,
- A short description of the event that caused you to believe your rights were violated, including the date or dates of the alleged violation or violations.
Additional steps that you should take in addition to filing a complaint with the EEOC include:
- Research and understand the wrongful termination laws in your state
- Examine the employment contract and the company employee manual to figure out the violations
- Gather all evidence including the copy of the termination from that was given by the employer at the time of termination
Damages in a Wrongful Termination Case
Typically if an employee wins a wrongful termination case, the damages sought in the case will be equivalent to lost pay, lost benefits, emotional distress, punitive damages, and attorney fees.
Lost pay damages amount to the pay that you would have received if your employer had not fired you, including any earned and unpaid wages, overtime, or other compensation the employer has withheld. This amount is reduced by any amount you have earned after you were terminated. For example, if you acquired other employment after being terminated, your damages will be subtracted from the amount earned by this new employment.
Lost benefits equate to the cost of benefits you lost as a result of your termination. This can often be difficult to quantify, but amounts to medical and dental insurance, health insurance, retirement, pension and 401k plans, stock options, and profit sharing, among other benefits.
Emotional distress damages can be sought, but they are difficult to obtain in a wrongful termination case. Emotional distress is also called pain and suffering and is awarded only in instances where an employer has acted egregiously and the employee has suffered in a way that can be verified by a psychiatrist.
Punitive damages are damages awarded in situations where an employer’s conduct is especially heinous, cruel, and/or egregious. Punitive damages are not available in all states and are often difficult to recover. They serve as a punishment and to deter future conduct by the employer. The amount awarded, once punitive damages have been proven, is entirely up to the jury.
Most employees seek to recoup the amount expended on an attorney to aid in the defense of their wrongful termination claim. If you prevail, you will seek an award of attorney’s fees to be reimbursed for the amount of legal fees you expended in your lawsuit.
Do I Need An Attorney?
If you believe you have been wrongfully terminated, an employment attorney can offer the guidance you need to defend your claim. The process for filing a claim in state court, and with the EEOC, can be complex and may be subject to multiple deadlines. An employment attorney will be an invaluable resource as you fight against your prior employer.
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Last Modified: 01-20-2017 11:00 AM PST
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