Wrongful termination

What is wrongful termination?

Wrongful termination refers to the unlawful dismissal of an employee in violation of legal protections, contractual obligations, or public policy. It typically occurs when an employee is fired for discriminatory reasons, retaliation, or without proper notice as outlined in company policy or employment law. While not every firing is illegal, how and why it’s done can make all the difference.

At its core, wrongful termination means an employer has overstepped legal or ethical boundaries in the termination process, which is why many seek guidance from a wrongful termination lawyer.

This can range from firing someone based on race, gender, religion, disability, or age to retaliating against an employee for reporting harassment or safety violations. Even letting someone go after they’ve filed a complaint with HR could fall into this territory.

Employers must also be cautious if a written or implied contract is in place. Violating those terms—like firing without notice or cause—could lead to claims of being wrongfully terminated. And while “at-will” employment offers flexibility, it doesn’t override federal or state labor protections.

Key takeaways from the blog
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• Wrongful termination occurs when an employee is fired for unlawful reasons like discrimination or retaliation.
• Understanding wrongful termination helps businesses handle terminations ethically and avoid legal consequences.
• Implementing DEI practices and manager training can prevent discriminatory terminations and reduce legal risks.

Wrongful termination vs. At-will employment: Key differences

Many employers assume that "at-will employment" gives them a free pass to fire anyone, anytime, even for an illegal reason. But here's the catch: even at-will employees are protected by law. Understanding the difference between wrongful termination and at-will employment can help you stay compliant and avoid legal risks.
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Examples of wrongful termination in the workplace

Wrongful termination doesn’t always make headlines, but that doesn’t make it any less serious. It can happen quietly, under vague justifications, but if the firing violates employee rights or breaks federal or state laws, it opens the door to legal action. Understanding what crosses the line can help both employers and employees recognize when something is off. 

Here are some common examples of wrongful termination in the workplace:

Termination after reporting harassment

An employee reports sexual harassment to HR, and shortly after, they're terminated under the guise of “performance issues.” If there’s no documented evidence of declining performance, this can be seen as retaliation. Many wrongful termination lawsuits begin when someone speaks up and is punished for it, especially in cases involving harassment or discrimination.

Firing based on pregnancy

A pregnant employee is let go because her maternity leave is deemed inconvenient for business operations. This violates the Pregnancy Discrimination Act and is one of the more common causes of wrongful discharge claims. Wrongful termination case based on pregnancy are not just unlawful—they’re often highly visible and damaging to an employer’s public reputation.

Let go after requesting disability accommodation

An employee requests reasonable accommodations for a disability, such as flexible hours or assistive tools, and is fired days later. This is a direct violation of the Americans with Disabilities Act (ADA). Employers are legally required to engage in the interactive process and provide reasonable accommodations. Firing someone in response to such a request is a textbook case of unlawful termination.

Dismissal based on race or ethnicity

An employee of color is consistently overlooked for promotions, receives vague criticism about their “attitude,” and is eventually terminated. If these patterns reveal racial or ethnic bias, the dismissal may qualify as workplace discrimination. Cases like this often point to systemic cultural issues within the organization and can lead to significant legal and reputational consequences.

Firing for whistleblowing

An employee flags unethical or illegal practices, such as fraud, safety violations, or financial misconduct, and is suddenly terminated. This is a clear case of retaliation and is protected under various whistleblower laws. Wrongful termination in these situations is taken seriously by courts, as whistleblower protections are in place specifically to prevent this kind of employer retaliation.

Common legal grounds for wrongful termination claims

Not every firing is illegal, but some clearly cross the line and may constitute wrongful termination. When employees are wrongfully terminated for reasons protected by law, they have legal standing to fight back. Below are common legal grounds that often lead to wrongful termination claims.
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• Discrimination based on protected characteristics: If an employee is fired due to race, gender, age, religion, disability, or sexual orientation, that’s unlawful. Federal and state laws prohibit such actions. These wrongful termination reasons often trigger lawsuits, especially when no clear performance issue is documented.
• Retaliation for reporting misconduct: Employees who report harassment, unsafe conditions, or illegal activity are legally protected from retaliation. Firing someone after they speak up is one of the clearest wrongful termination examples. Courts often side with whistleblowers in these situations.
• Breach of employment contract: If you fire employees in violation of an implied or written contract, it's a legal issue. These cases fall under the wrongful termination checklist when an employer fires an employee by ignoring terms like notice periods or cause-based dismissal clauses.
• Denial of protected leave: Firing someone for taking approved family, medical, or military leave under laws like FMLA is illegal. These terminations often go unnoticed until legal claims arise, making them risky and reputationally damaging for employers.
• Termination after requesting accommodations: Employees with disabilities or religious needs are entitled to reasonable accommodations. Firing them instead of making adjustments breaches the law. It’s an unlawful termination that shows poor DEI practices and often sparks avoidable legal trouble.

Wrongful termination due to discrimination

Wrongful termination due to discrimination doesn’t just lead to legal trouble—it can severely damage an organization’s credibility and employee trust. When someone is fired based on their race, gender, religion, age, disability, or sexual orientation, the dismissal crosses from poor management into illegal territory. 

These cases are among the most common forms of wrongful termination seen in workplace lawsuits, and often, they could have been prevented with proper oversight, documentation, and a strong anti-discrimination policy outlined in the employee handbook.

What makes discrimination-based termination particularly concerning is that it often starts quietly. A pregnant employee may be excluded from key meetings. A manager might make age-related comments that go unchecked. A team member from a minority background could be routinely overlooked for advancement. 

These small but consistent patterns of bias set the stage for what can become an unlawful dismissal. By the time the termination occurs, the damage has already been done—both to the employee and the legal standing of the employer.

Firing someone on discriminatory grounds violates federal protections such as Title VII of the Civil Rights Act, the Americans with Disabilities Act (ADA), and the Age Discrimination in Employment Act (ADEA). These laws apply regardless of whether the company operates in an at-will employment state. 

That means employers cannot fall back on “at-will” status to justify a firing if there’s evidence that discrimination played a role. The legal, financial, and cultural consequences of such a misstep are often long-lasting, making it critical for organizations to train managers, enforce policies, and take claims of bias seriously at every level.

How to handle terminations ethically and transparently?

Handling terminations can be one of the most challenging aspects of management. Ensuring transparency and ethics not only reduces the risk of wrongful termination claims but also helps preserve workplace morale and trust. Here are key strategies for executing terminations with fairness and clarity:
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• Have clear documentation: Ensure that all performance issues, warnings, and corrective actions are well-documented. Having a paper trail can prevent misunderstandings and show that the termination was based on valid reasons.
• Follow company policies and procedures: Always adhere to established guidelines for disciplinary actions and terminations. Consistency ensures fair treatment of all employees and mitigates legal risks, showing that the process is impartial.
• Give employees a chance to improve: Before termination, offer employees clear feedback and opportunities for improvement. This gives them a fair chance to address performance issues and aligns with ethical management practices.
• Offer a fair severance package: Provide reasonable severance pay or benefits to those being let go. This gesture can alleviate negative feelings and show respect for the employee's time with the company.
• Communicate with empathy: Acknowledge the emotional impact of the situation. Approach the conversation with empathy, understanding that losing a job is stressful and emotional for the individual involved.
• Keep the conversation private: Hold termination discussions in a private setting to respect the employee’s dignity and confidentiality. Publicly firing someone can lead to unnecessary embarrassment and legal consequences.
• Prepare for an exit interview: Use the termination as an opportunity for an exit interview. This helps you gain insight into potential company improvements and lets employees leave with a sense of closure.

How DEI practices can prevent discriminatory terminations?

​Implementing Diversity, Equity, and Inclusion (DEI) practices plays a crucial role in preventing discriminatory terminations within the workplace. By fostering an environment of fairness and respect, DEI initiatives help mitigate biases that could lead to unlawful dismissals. Here are several ways DEI practices contribute to ethical and nondiscriminatory employment decisions:​
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• Establishing clear anti-discrimination policies: DEI programs define and communicate policies that prohibit discrimination based on race, gender, age, religion, national origin, or disability. These policies set clear expectations for behavior, making it less likely for terminations to occur based on biased motives.
• Providing comprehensive bias training: Regular training sessions educate employees and management about recognizing and mitigating unconscious biases. This education reduces the risk of discriminatory actions influencing termination decisions, promoting a more equitable workplace.
• Implementing fair recruitment and evaluation processes: DEI initiatives ensure that hiring and performance evaluation procedures are standardized and transparent. By focusing on objective criteria, these processes minimize the potential for discriminatory terminations.
• Monitoring and analyzing employment data: Regular analysis of hiring, promotion, and termination data helps identify patterns that may indicate discrimination. Addressing these patterns proactively prevents potential legal issues and fosters a more inclusive environment.
• Ensuring accessible grievance mechanisms: DEI programs establish clear channels for employees to report concerns about discrimination or unfair dismissal. Accessible grievance mechanisms allow issues to be addressed before they escalate to terminations or legal action.
• Committing to ongoing legal compliance reviews: Regular reviews of company policies and practices ensure alignment with current anti-discrimination laws. Staying informed about legal standards helps prevent policies that could inadvertently lead to discriminatory terminations.
• Promoting an inclusive company culture: Cultivating a culture that values diversity and inclusion encourages respect and understanding among employees. An inclusive environment reduces the likelihood of discriminatory behaviors influencing employment decisions, including terminations.

Using exit interviews to spot red flags before they become legal risks

Exit interviews are more than just a formality—they’re a strategic tool for identifying potential legal risks before they escalate. When conducted thoughtfully, they provide honest insights into why employees are leaving and highlight areas where your organization may be vulnerable. Here’s how exit interviews can help spot red flags early:
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• Identify patterns of discrimination or bias: Exit interviews can surface instances where employees felt they were treated unfairly due to race, gender, age, or other protected characteristics. Spotting these patterns early allows employers to investigate and correct issues before they lead to formal discrimination claims.
• Evaluate the effectiveness of management: Feedback often includes comments about supervisors or leadership styles. If multiple employees cite poor management, micromanagement, or unethical conduct, it could signal a broader issue. Addressing it proactively helps reduce the risk of wrongful termination or hostile work environment claims.
• Understand workplace culture issues: Exit interviews give employees a final opportunity to speak freely about the work environment. Complaints about toxicity, lack of inclusion, or poor communication shouldn’t be brushed off—unaddressed cultural problems can eventually turn into compliance concerns or employee lawsuits.
• Gauge job satisfaction and unmet expectations: Departing employees can reveal whether they felt misled about their role, pay, or growth opportunities. If consistent feedback points to unmet promises, it could indicate risks related to breach of contract or unfair employment practices.
• Spot early warning signs of retaliation: Employees may resign due to perceived retaliation after reporting issues like harassment or safety violations. Asking the right questions during exit interviews can uncover these patterns and give the company a chance to intervene before a retaliation claim is filed.

The importance of manager training in avoiding wrongful termination

Manager training is critical in reducing wrongful discharge risks. It helps equip managers with the knowledge to make informed, fair decisions while adhering to company policies and legal guidelines. Well-trained managers ensure compliance and create a transparent, supportive workplace environment.
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• Understanding legal implications: Training helps managers understand the laws surrounding wrongful termination, such as discrimination and retaliation. This reduces the likelihood of illegal terminations and protects the company’s legal standing.
• Promoting consistency in decision-making: By applying consistent policies, managers avoid bias or favoritism. Consistency in decision-making ensures fairness and minimizes the chance of employees feeling unjustly treated.
• Recognizing early signs of potential issues: Trained managers can identify performance or behavior issues early, allowing them to address concerns before termination becomes necessary. This proactive approach helps prevent wrongful dismissal claims.
• Enhancing communication skills: Manager training focuses on effective communication, helping leaders navigate tough conversations with empathy. Clear communication ensures employees understand the reasons behind their termination, reducing misunderstandings and legal risks.
• Documenting performance issues: Training emphasizes the importance of thorough documentation. Proper records of performance issues help defend against wrongful termination claims by providing clear, evidence-based reasoning for decisions.

7 Steps HR should take before terminating an employee

Before terminating an employee, HR plays a crucial role in ensuring the decision is fair, transparent, and legally sound. Proper steps help minimize legal risks and ensure the employee’s dignity is respected throughout the process.
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1. Review company policies and procedures: HR should review the company’s termination policies to ensure that the process is consistent with internal guidelines. This helps avoid bias and maintains fairness.
2. Conduct a thorough performance evaluation: Before termination, HR should assess the employee’s performance records, ensuring they have been given fair opportunities to improve. Clear documentation of performance issues is key to supporting the decision.
3. Consult with legal counsel: HR should consult with legal counsel to verify that the termination is compliant with employment laws. This step reduces the risk of potential wrongful termination claims.
4. Ensure proper documentation: HR must ensure that all performance issues, warnings, and discussions are well documented. Detailed records provide a legal defense if the termination decision is challenged.
5. Explore alternative solutions: Before proceeding with termination, HR should consider alternative actions such as reassignment, coaching, or a performance improvement plan (PIP). These options may help resolve the issue without resorting to termination.
6. Prepare a termination meeting plan: HR should carefully plan the termination meeting, ensuring a respectful and professional environment. Preparing for the conversation ensures clarity and reduces emotional stress for both parties.
7. Offer support and resources: HR should offer outplacement services or resources for transitioning to new employment. Providing support shows empathy and maintains a positive company reputation.

FAQs

1. What is an example of wrongful termination?

An example of wrongful firing of an employee based on their race, gender, or disability, which violates anti-discrimination laws. Another example is terminating employees for whistleblowing or taking family leave, both of which are protected actions. Such terminations are considered unlawful and can lead to legal claims for damages, reinstatement and monetary compensation.

2. What are the most common reasons employees sue for wrongful termination?

Employees commonly sue for wrongful termination due to discrimination based on race, gender, or age, leading to a wrongful discharge lawsuit that often requires a thorough investigation. Other common reasons include retaliation for reporting illegal acts, violations of employment contracts, or firing an employee after they’ve taken protected leave like FMLA. In some cases, employees claim their termination violated company policies or public policy protections.

3. What evidence is needed to prove wrongful termination?

To prove wrongful termination, employees need to provide evidence such as performance reviews, emails, or documented communications showing the reason for firing. Other helpful evidence includes witnesses, company policies, or records of any complaints made. Evidence proving discrimination, retaliation, or violation of legal rights (e.g., family leave) can also strengthen the claim.