Ch5. Termination and Wrongful Discharge — What Is Wrongful Termination and How to Fight It

What Is Termination?

Termination: the employer’s unilateral act of ending the employment relationship.

US employment law generally follows the at-will doctrine — either party may end the relationship at any time, for any reason, without advance notice, unless a contract, statute, or public policy provides otherwise. Terminations that violate these exceptions are wrongful discharges.

Requirements for a Lawful Termination

At-will doctrine (baseline): no specific reason is required in at-will states, but certain reasons are unlawful regardless of the doctrine.

Exceptions to At-Will Termination

Statutory protections:

Anti-discrimination laws (Title VII, ADA, ADEA, GINA): employers may not discharge because of a protected characteristic
Anti-retaliation provisions: FLSA, FMLA, OSHA, Sarbanes-Oxley, NLRA — employees protected for exercising statutory rights

Contractual limitations:

Individual employment contracts specifying a term or requiring cause for termination
Collective bargaining agreements (CBAs) typically require “just cause” for discipline and discharge

Public policy exceptions (common law):

Firing for jury duty, military service, voting, or for refusing to commit a crime is unlawful in virtually every state

Procedural requirements (unionized workplaces):

Must follow the discipline procedure in the CBA
Employer must provide the reason for discharge in writing
Employee has the right to union representation (Weingarten rights) during investigatory interviews that may lead to discipline

→ Even a substantively justified termination may be unlawful if proper procedure is not followed in a unionized setting.

Protected Periods — When Termination Is Prohibited

Period	Protected Class
FMLA leave (up to 12 weeks)	All eligible employees
Pregnancy disability leave	Pregnant employees / ADA accommodation
Workers’ comp claim period + 30 days	Injured employees in many states

However, terminations for cause unrelated to the protected activity are not prohibited during these periods if properly documented.

Advance Notice of Termination

WARN Act (29 U.S.C. §§ 2101–2109): employers with 100 or more full-time employees must provide at least 60 days’ written notice before a plant closing or mass layoff.

60 days’ notice is not given → employer owes back pay and benefits for the notice period.

WARN Act Exceptions

The following trigger WARN Act obligations but allow shorter notice:

Faltering company: employer was seeking capital/business that would have prevented the closing
Unforeseeable business circumstances: sudden, dramatic, and unexpected action outside the employer’s control
Natural disaster: flood, earthquake, tornado, etc.

Mass Layoff / Reduction in Force (RIF)

WARN Act triggers: a mass layoff affecting 500 employees (or 33% of the workforce if at least 50 are affected) at a single site within a 30-day period.

Requirements for a Lawful RIF

1. Genuine business necessity

Financial difficulty, restructuring, technological change requiring workforce reduction
“Convenience” or purely profit-driven motivation may expose the employer to claims

2. Efforts to avoid the layoff

Cost-cutting measures, voluntary buyouts, hiring freezes, reduced hours before resorting to layoffs

3. Non-discriminatory and objective selection criteria

Objective factors (seniority, performance scores, skills needed going forward)
Selecting protected groups at disproportionate rates voids the layoff (disparate impact)

4. Advance notice and consultation

WARN Act: 60 days
Unionized workplaces: obligation to bargain over the decision and/or effects of the layoff

Rehire Preference

Best practice: employees laid off in a RIF receive priority consideration for rehire for a specified period (often 12–24 months) if the employer resumes hiring for the same or similar positions.

Wrongful Termination Remedies

An employee who believes they were wrongfully discharged has the following options.

Option 1: EEOC Charge / State Agency Complaint

Most common starting point for discrimination-based claims.

Filing deadline: 180 days from the discriminatory act (300 days in states with a fair employment agency)
Process: charge filed → investigation → mediation or conciliation → right-to-sue letter
Remedies if successful: reinstatement, back pay, front pay, compensatory and punitive damages, attorney’s fees

Enforcement mechanisms: if the EEOC finds probable cause and conciliation fails, it may litigate; otherwise it issues a right-to-sue letter within 180 days.

Option 2: Civil Lawsuit

Filed in federal or state court under applicable anti-discrimination statutes or breach of contract theory
Time-consuming but allows full discovery and jury trial
Damages: back wages, front pay, compensatory damages for emotional distress, punitive damages (where permitted), reinstatement

Procedural Path

EEOC charge → right-to-sue letter → federal district court → circuit court of appeals → US Supreme Court

Or file under state law in state court (shorter timelines in some states).

Effect of a Successful Wrongful Termination Claim

When a termination is found unlawful:

Employee is entitled to back pay from the date of termination through judgment
Court may order reinstatement or award front pay (projected future lost earnings) in lieu of reinstatement
Benefits and seniority may be restored
Pension/retirement vesting period is treated as continuous

Constructive Discharge and Voluntary Resignation

Constructive discharge: when working conditions become so intolerable (due to harassment, demotion, hostile environment) that a reasonable person would feel compelled to resign. Treated as a termination for legal purposes.

Forced resignation: if an employer coerces a resignation through threats or unlawful pressure, the resignation is involuntary and may be challenged as wrongful discharge.

Mutual separation agreement: a voluntary, negotiated separation is lawful if made without coercion. Courts examine the totality of circumstances. A valid release of claims (waiver) must comply with specific requirements under the Older Workers Benefit Protection Act (OWBPA) for employees 40+.

Learning Checklist

I can explain the at-will doctrine and its key exceptions
I can identify periods during which termination is prohibited or restricted
I can explain the WARN Act’s 60-day notice requirement and its exceptions
I can list the four requirements for a lawful mass layoff
I can describe the EEOC charge process and filing deadlines

Core Concept Cards

Contract Formation — Offer and Acceptance ★★★★ : Offer: a definite proposal creating the power of acceptance in the offeree. Acceptance: unequivocal agreement to all terms. Contract formed upon acceptance reaching the offeror (mailbox rule for mailed acceptances).

Breach of Contract — Types ★★★★★ : Anticipatory repudiation: clear statement before performance is due. Actual breach: failure to perform when due. Partial breach: some performance tendered with defects. Each type has different remedial consequences. Memory tip: Anticipatory = before due; Actual = on due date; Partial = incomplete

Tort Liability Elements ★★★★★ : ① Duty ② Breach of duty ③ Actual and proximate causation ④ Damages. All four elements must be established; absence of any element defeats the claim. Special categories (respondeat superior, strict liability) have their own rules.

Damages — Expectation, Reliance, and Restitution ★★★ : Expectation damages: the benefit of the bargain. Reliance damages: out-of-pocket losses. Restitution: return of unjust enrichment. Punitive damages: available in tort (not contract) for egregious conduct.

Practice Quiz

Q. What are the four elements required to establish a tort claim?

① Duty ② Breach of duty ③ Causation (actual and proximate) ④ Damages — all four must be present.

Q. What are the three types of contract breach and their core characteristics?

① Anticipatory repudiation: clear refusal before performance is due ② Actual breach: failure to perform when obligated ③ Partial breach: performance rendered but with material defects

OIYO Editorial