A wrongful termination is any firing that is illegal. A firing is illegal when it:
- violates a federal, state, or local law, or
- violates an employment contract.
Just because a termination is unfair doesn’t make it illegal. For example, it might be unfair for your boss to fire you so he can hire his inexperienced niece or nephew. However, because there’s no law against nepotism, you wouldn’t have a wrongful termination claim.
Violation of Federal, State, or Local Laws
The default rule in the United States is “at-will employment.” This means employers can fire employees at any time, for any reason. However, there is one important exception to this rule. Employers cannot fire at-will employees for illegal reasons. Federal, state, and local laws carve out a handful of reasons that are illegal. For example, it’s illegal to fire employees due to their race or gender.
Violation of Employment Contract
Employees no longer work at-will when they have an employment contract. We usually think of employment contracts as being written, but they can also be formed by words and actions. (See our article explaining how employers create employment contracts and alter at-will employment.) A contract employee cannot be fired if it would violate the terms of the contract. Typically, this means that employers cannot fire employees with having a good reason (called “cause”) before the term of the contract is up. Employers also can’t fire contract employees in violation of state, federal, or local laws.
Go back to main page of Wrongful Termination FAQs for Employees.