Unfortunately, we know that just because you fire someone, doesn’t mean that’s where your story with this individual ends. If an employer makes a termination that is deemed “wrongful” in a  court of law, you could have a huge lawsuit on your hands, which we all know is extremely harmful to your organization. The legal fees alone will put a huge dent in your finances, and at the same time, your reputation could be at risk as well. Let’s go over what the judicial system considers a “wrongful termination” so that you can be prepared to avoid them in the future.

Looking for more information on EPL Insurance? Click here to learn more.

Was it Really Wrong?

Whether you think you were justified in an employee termination is irrelevant, because it’s not up to you. Let’s talk about the court’s guidelines so we can make sure we are playing by the rule book. It’s important to know that if you hire an employee that is not under an employment contract, then they are working on an “at-will” basis. Basically, this means that you can fire an employee at any time for ignoring their duties, not performing up to the standard you have agreed upon, acting dishonestly, or for directly disobeying the orders that they were given. 

Speaking of disobeying orders, we highly suggest that whenever you make a new hire, you have a clear set of guidelines that spell out all of your company’s rules, policies, and standards very clearly in an employee handbook. It’s also important that you have your employees sign the handbook stating that they understand and are willing to comply. If a court ever questions a termination and you made the termination strictly on the basis that the employee was disobeying orders, you will be able to reference their signed copy of your employee handbook on file. This can really save your back in the long run.

Wrongful Termination Cases

Over time, the courts have become more and more strict on limiting at-will employment, so the risk is now more for employers than employees. With that being said, there are some exceptions to at-will employment terminations that you must avoid at all costs.

1. First and foremost, discrimination is the leading cause of most terminations that are considered wrongful. If an employee can prove that a termination was made on the basis of discrimination of gender, race, religion, age, sexual orientation, disability, or national origin, then there will be serious repercussions for the employer.
2. Another example of wrongful termination is if an employee is hired under a contract and terminated before the specified period of time on the contract is over, and if it was for a reason that was not listed in the contract’s guidelines. So be careful in writing the fine details of your employment contracts to make sure you won’t be facing any liabilities down the road.
3. Next, you can’t terminate an employee for having filed a complaint, or an employee exercising a right under public policy. For example, if an employee were to report their employer for violating workspace safety precautions, the employer can’t then turn around and fire the employee to avoid correcting the workplace safety procedures. At the end of the day, you would then potentially be faced with two lawsuits, one for not making the corrections that violate a safety procedure, and then another for making a wrongful termination.
4. Another scenario where a termination will be deemed unlawful is when an employer requests the employee to perform an illegal act and the employee refuses, and the employer makes a termination in retaliation. This one is pretty straightforward, so try to be sure your practices are all legal and fair.
5. Next scenario, you cannot fire an employee in an attempt to cover up sexual harassment. This one is also pretty straightforward, so be sure to follow all guidelines and procedures.
6. Finally, you can’t terminate an employee for absence while an employee has the right to time off, such as military or pregnancy leave. If an employee is terminated for their absence even though it was their right to be away, you will surely be facing legal consequences.

To learn more about common EPLI claims, check out our article – Is Your Business Protected from an EPLI Lawsuit?

The Takeaway

We don’t want to have to see you face any court cases concerning employment liabilities, because it could be very harmful to your company, or in some cases, it can mean the end of your organization as you know it. Make sure you follow the court’s guidelines and use sound judgment for determining what the court would consider “reasonable” in their eyes. We always advise all of our clients to seek legal advice if they are in doubt.

We also understand that mistakes still happen. That’s why it’s important to make sure that you have the proper employment liability insurance in place to protect your business at all costs. If you are unsure if you have enough EPLI coverage, give us a call at 860-453-0116 or send us a message here.