How is Wrongful Termination Defined?
“Wrongful termination” is a clearly defined act according to the law. One of two conditions must have been met for a wrongful termination to have occurred. First, an employer must have discharged an employee in a manner that breaches at least one of the terms of the contract. For example, if an employee’s contract stipulates that he or she cannot be terminated for failing to show up to work on time, but is later terminated for this very reason, the termination would legally be a breach of contract and classified as a wrongful termination.
The second condition involves federal and state employment laws. These laws may vary from state to state, but in general, there are three main reasons why it may be illegal to terminate an employee:
- The employee is a whistleblower, i.e., that employee has reported your company or someone in your company for illegal practices such as harassment, illegal software sharing (copyright infringement), health and safety violations or other illegal business practices.
- The employee has exercised his or her legal workplace rights, such as taking contracted medical leave, taking maternity leave or serving time in the military.
- Your firing decision was discriminatory, meaning it was based on an employee's race, gender, age, disability status or religion.
At times, a business owner may leave the decision up to lower-level managers. It is not always possible to control when these managers fire employees, and some may not be properly trained on the legal consequences of firing. Even if an employee who was wrongfully terminated is hired back, your business may still be liable for a wrongful termination suit.
What factors go into a wrongful termination claim?
While several factors are considered, wrongful termination lawsuits often take into account:
- Wage loss, which considers how much the employee lost in wages, starting from the day he or she was let go
- Lost benefits, which consider the value of the benefits that employee lost. This can include such things as health care, vacation time and even retirement accounts
- Emotional distress, an area with a degree of subjectivity, is often taken into account when claims of harassment or discrimination are made
When taken together, these three areas can result in settlements that can cost a company hundreds of thousands of dollars.