Most employees are hired according to what is called an “at-will” basis. This means that the employer may terminate the employment for nearly any reason so long as it is not illegal. Conversely, this also means that the employee may quit their job at their own discretion for any legitimate reason.
At will employment provides both the employer and the employee a great deal of freedom and mobility to adapt to the ever-changing job market. The majority of states assume that employment is on an at-will basis if a valid employment contract does not exist between employer and employee.
Given the very few restrictions involved in an at-will employment arrangement, it may seem difficult for a wrongful termination to occur. So, under what circumstances is it unlawful for a person to terminate an at will employment?
There are several reasons that termination of at will employment may constitute wrongful termination, which will be discussed below. They mainly deal with termination by the employer, although employees may also be held liable as well.
At will employment is subject to various federal and state laws which make termination illegal under certain circumstances. The following are some situations where terminations of an at will employee are wrongful because they constitute a violation of law:
These are the most common situations dealing with at-will terminations that violate the law. They have a good chance of success in a court of law because they are backed by major Federal laws passed by the legislature to ensure fair and just employment practices.
In addition to violations of the law, termination of at will employment may be wrongful if it is contrary to public policy. Public policy refers to the body of principles that reflect the collective moral and ethical stance of a community.
An example of a public policy is when the government grants tax credits for people who donate to a non-profit organization. The public policy which motivates the tax credit is that people should be encouraged to contribute to humanitarian organizations.
Public policy is not law in itself, and courts are not required to base their decisions on public policy, but they can weigh heavily in wrongful termination suits. Here are some examples of wrongful terminations and corresponding public policy justifications:
Most judges would prefer to base their decisions on statutes or case law rather than public policy. This is because public policy is not law, and it often varies from region to region within the U.S. However, some states do permit recovery for terminations based on public policy violations.
Another reason that termination of at will employment may be considered wrongful is if it constitutes a breach of an implied covenant. An implied covenant is an agreement that is not necessarily stated but rather is assumed as a condition to the employment.
An example of this is an implied covenant of good faith. This implied covenant assumes that the employer and employee will act in good faith (i.e., use their best efforts) in providing their services to one another. Another is the implied covenant of fair dealings, that is, that the parties will act in a manner that is fair and will not put the other at a disadvantage.
An employer who has fired their employee because they wish to withhold benefits such as end of the year bonuses or sales commissions would be in violation of the implied covenant of good faith. Employers are expected to make good on the promises they make in hiring a person, and failure to act in good faith during a termination would be considered wrongful. Employees can also violate the good faith covenant, for example, by not providing enough notice before resigning.
At will employees who have been wrongfully terminated are entitled to various remedies under law. These may include: reinstatement to their former position, recovery of lost wages, entitlement to back pay, and establishment of further measures for preventing future violations.
In most cases, a wrongful termination lawsuit cannot be filed unless the victim first files a claim with a Federal and/or state regulatory agency such as the Equal Employment Opportunity Commission (EEOC). After filing with the EEOC, the agency will conduct an investigation and order that the proper remedy be applied, such as recovering back pay. Only after the EEOC is unable to determine a proper remedy may a legal claim be filed in a court of law.
At will employment is the norm in the majority of all states. Since there is usually no contract involved, termination must follow procedures dictated by employment laws. In the event that you suspect a wrongful termination claim, an attorney who is well-versed in wrongful termination laws can help you greatly. You may even wish to hire a lawyer at the EEOC reporting stage to help you file your claim. Here are some points to go over with an attorney: