Wrongful Termination Claims: What Paralegals Should Know

Wrongful Termination Claims Overview

Wrongful termination occurs when an employee is fired in violation of the law, public policy, or the terms of an employment agreement. While most employment in the United States is "at-will," meaning either the employer or employee can end the relationship at any time for any legal reason, there are important exceptions. Paralegals who understand wrongful termination law can contribute significantly to employment law practices and strengthen their preparation for the CP exam.

At-Will Employment and Its Limits

The default employment relationship in most states is at-will, meaning the employer can terminate the employee for any reason, no reason, or even a bad reason, as long as it is not an illegal reason. Similarly, the employee can quit at any time without notice. However, several important exceptions limit the at-will doctrine and give rise to wrongful termination claims.

Statutory Exceptions

Federal and state statutes prohibit termination based on certain protected characteristics and activities. Title VII of the Civil Rights Act prohibits termination based on race, color, religion, sex, or national origin. The Age Discrimination in Employment Act (ADEA) protects employees age 40 and older. The Americans with Disabilities Act (ADA) prohibits termination based on disability when the employee can perform essential job functions with or without reasonable accommodation. The Family and Medical Leave Act (FMLA) prohibits termination for taking protected medical or family leave.

Retaliation Protections

Numerous federal and state laws protect employees from termination in retaliation for engaging in protected activities. Whistleblower protections shield employees who report illegal activity, safety violations, or fraud. Workers' compensation laws prohibit termination for filing a work injury claim. Anti-discrimination laws protect employees who file discrimination complaints or participate in investigations. The Sarbanes-Oxley Act protects employees of publicly traded companies who report securities fraud.

Common Law Exceptions

In addition to statutory protections, courts in many states have developed common law exceptions to at-will employment.

Public Policy Exception

The public policy exception, recognized in most states, prohibits termination that violates a clear mandate of public policy. Common examples include firing an employee for refusing to commit an illegal act (such as falsifying records or violating safety regulations), firing an employee for exercising a legal right (such as filing a workers' compensation claim or voting), firing an employee for performing a public duty (such as serving on a jury), and firing an employee for reporting illegal conduct by the employer.

Implied Contract Exception

An implied contract of employment can arise from employer statements, policies, or practices that create a reasonable expectation of job security. Employee handbooks that outline progressive discipline procedures, promises of continued employment made during hiring, and long tenure combined with regular promotions and positive performance reviews have all been cited as evidence of an implied contract. When an implied contract exists, the employer may be required to show good cause for termination.

Implied Covenant of Good Faith and Fair Dealing

A minority of states recognize an implied covenant of good faith and fair dealing in the employment relationship. Under this exception, termination motivated by bad faith or malice, such as firing a long-term employee just before their pension vests, may constitute wrongful termination. This is the least commonly recognized exception and varies significantly in scope among the states that apply it.

Investigating Wrongful Termination Claims

Paralegals play a crucial role in the early stages of wrongful termination cases. Key investigation tasks include reviewing the employee's personnel file, performance evaluations, and disciplinary history. Paralegals should obtain and analyze the employer's policies and procedures, including employee handbooks and progressive discipline policies. They should interview the terminated employee to identify all potential claims and gather a detailed timeline of events. They should identify and interview witnesses who can corroborate the employee's account. They should also preserve electronic communications, including emails and text messages, that may contain evidence of discriminatory or retaliatory motive.

Documenting Damages

Wrongful termination damages may include back pay (lost wages from the date of termination to the date of trial), front pay (future lost earnings when reinstatement is not feasible), lost benefits (health insurance, retirement contributions, stock options), emotional distress damages, and in cases of particularly egregious conduct, punitive damages. Paralegals assist in calculating these damages by gathering pay records, benefit information, and documentation of the employee's efforts to find new employment (mitigation of damages).

Administrative Prerequisites

Many wrongful termination claims require the employee to file a charge with an administrative agency before filing a lawsuit. For claims under Title VII, the ADEA, and the ADA, the employee must file a charge with the Equal Employment Opportunity Commission (EEOC) or the corresponding state agency within strict time limits. Paralegals must be aware of these filing deadlines and ensure that all administrative prerequisites are met before litigation is commenced.

Study wrongful termination, employment law, and other career-relevant topics with our CP exam flashcard system. Explore our study plans to find the preparation package that fits your goals.