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wrongful termination

Wrongful termination is a terminated employee's claim that the firing breached an employment contract or public policy . 

Types of Employment

For-Cause

Where an employment contract requires termination only “for cause,” or a justification/reason for termination, and the employer fails to provide an adequate reason for the firing, a terminated employee can bring a legal action to court against the former employer for arbitrary discharge. For cause employment can also implicate permanent employment which further protects employees from wrongful termination. For example, in Nicosia v Wakefern , the court held that the provision in the employee handbook, which stated for cause termination established an implied contract for permanent employment which provided the grounds for a wrongful termination lawsuit .

At-Will

Most wrongful discharge claims arise under the default rule of at-will employment , in which both the employer and employee can end employment at any time and for any reason or no reason at all, excluding discriminatory purposes. 

Wrongful Discharge in Violation of Public Policy

Wrongful discharges violate public policy if the employee is terminated for:

• Refusing to commit illegal /unlawful acts

  • Example: employee refuses to commit fraud on behalf of the employer

• Exercising their statutory right

  • Example: employee fired for filing a worker’s compensation claim

• Fulfilling a public obligation 

  • Example: employee must miss work for jury duty

• Whistleblowing

If the case falls within one of these four pigeonholes, then the court will consider the third-party effects of the termination before determining whether the employment termination was a wrongful discharge for public policy reasons. 

Wrongful termination may also be called wrongful discharge, wrongful firing, wrongful dismissal, illegal discharge, illegal termination, or illegal dismissal.

[Last reviewed in November of 2024 by the Wex Definitions Team
]

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