What are the Illegal Reasons to Fire an Employee?

What constitutes as a wrongful termination? Read this guide to find out.

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While employers don't need a reason to fire an at-will employee, it's illegal to fire an employee for unlawful reasons.

Firing an employee is always an uncomfortable situation for both the employer and employee. While the employer is dealing with an awkward conversation and the knowledge that she’ll have to fill a position quickly, the employee is looking at a loss of income and career uncertainty.

In addition to those difficult feelings though, employees often feel that their termination was unfair. Perhaps they believe they should’ve been given another chance or that their performance was not as bad as their boss made it out to be.

But while many people who are fired might believe that the decision was “wrongful,” there is a very specific legal definition of “wrongful termination,” and it only applies to certain cases.

What is wrongful termination?

Wrongful termination means firing an employee for an illegal reason. Below you will find a list of illegal reasons to fire an employee.

  1. Firings that are in violation of federal anti-discrimination laws. Federal law prohibits employers from discriminating on the basis of race, gender, ethnic background, religion, or disability. That includes firing an employee for one of those reasons.
  2. Firings that violate state anti-discrimination laws. A number of states also have laws that prohibit discrimination based on sexual orientation and/or gender identity.
  3. Retaliation. It is illegal to fire an employee for making a discrimination claim against you. For example, if an employee claims that you did not offer him a raise because of his race, you may not fire him for making that claim. This is true even if a judge or jury finds that the decision to not offer a raise was unrelated to racial discrimination.
  4. Refusing to take a lie detector test. The federal Employee Polygraph Protection Act prohibits most employers from terminating staff for refusing to take a polygraph. In some states, employers are even prohibited from using lie detector tests at all.
  5. Alien status. Under the federal Immigration Reform and Control Act (IRCA), employers are prohibited from firing an employee based on their immigration status, as long as that employee is legally allowed to work in the United States.
  6. Reporting OSHA Violations (Whistleblowing). Under the federal Occupational Safety and Health Act (OSHA), employers may not fire employees for complaining that work conditions don’t meet legally mandated health and safety rules.
  7. Violations of the law. In most states, employers may not fire an employee for reasons related to the employer’s own illegal activity. Some examples include:
    • Firing an employee for refusing to break the law (ie refusing to falsify insurance claims)
    • Firing an employee for reporting their employer’s illegal activity
    • Firing an employee for exercising a legal right (ie taking family medical leave or voting)
  8. Violations of employment contracts. If an employee’s contract specifies reasons for which they cannot be terminated, you must follow those terms or risk being sued for breach of contract.

Protect yourself from wrongful termination suits

Even if you follow all of our tips, and you only fire employees for legal reasons, you might still fear that someone will sue you for wrongful termination. That is not an unjustified fear. Lawsuits happen every day, and employees who have recently been fired might feel justified in suing you.

You can protect yourself from a lawsuit in a few ways.

  • Be sure that all of your employment contracts make clear that employment is “at will,” and that none of your official documents guarantee employment in any way.
  • Practice kind termination strategies, and ensure all firings are done in a face to face meeting.
  • Ask fired employees to sign an agreement not to sue as a condition of receiving a severance package.
  • Keep detailed records of all performance issues.
  • Conduct all terminations according to your company’s disciplinary procedures policy.

Terminations are always uncomfortable, for both employer and employee. But while many people who are fired might believe that the decision was “wrongful,” there is a very specific legal definition of “wrongful termination,” and it only applies to certain cases.

We hope that this article helps you understand the law as it applies to wrongful terminations so that you can protect yourself and your employees.

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