Termination Laws by State: What You Need to Know

At-Will Employment

Almost every state recognizes that any employee who has not entered into an employment agreement or contract with his or her employer is considered an at-will employee. The principle behind at-will employment is that workers are employed at the will of their employer. In other words, an at-will employee can be fired at any time and for any reason. The employer does not need good cause and does not need to provide any notice to the employee.

Wrongful Termination

Under both federal and state laws, there are exceptions to the at-will employment doctrine. An employer who fires an employee in violation of one of these laws may be sued for wrongful termination. For instance, an employer may not fire an employee for a discriminatory reason. An employee may also not be fired if it violates the conditions of an employment contract or agreement you entered into with the employee. Finally, you may not fire an employee in retaliation for exercising his or her rights under the law.

Breach of Contract

In some circumstances, you may enter into an employment contract with one of your employees. Such agreements usually set forth the scope of the person’s employment, how much he or she will be paid, what benefits shall be received, how long the position is for and the process for either party to end the employment relationship. Once you enter into a contract with your employee, you are legally bound to adhere to its terms. If you fire the employer and it violates a provision contained in the agreement, it could be considered a breach of contract and wind up in court. Some states also recognize implied contracts, such as oral agreements or policies set forth in employee handbooks. For example, if the company handbook states that an employee must receive three warnings before being fired and you deviate from that policy, you could still be sued for breach of contract.

Discrimination

Under both federal and state laws, an employer may not fire an employee for a discriminatory reason that is unrelated to the worker’s job performance. If you fire an employee because of his or her sex, race, color, national original, genetic information, age, pregnancy or disability it could be considered wrongful termination and the employee may sue. Some states have protected statuses above and beyond the federal standards, including discrimination based on gender or sexual orientation, marital status, military service or political affiliation.

Retaliation

Employers are also prohibited from firing an employee in retaliation for certain actions. One common type of retaliation occurs when an employee is terminated after filing a harassment or discrimination complaint against his or her employer. Moreover, employers cannot fire employees for asserting their rights under the law, such as taking family leave or asking to have a disability reasonably accommodated. If an employer is investigated as the result of a complaint, it cannot fire any employee in retaliation for participating in that investigation. Employees who report companies for violating state or federal laws, sometimes known as whistleblowers, are also protected.

Public Policy

There are also exceptions to the at-will employment doctrine for matters of public policy. Employers cannot fire employees if doing so would violate a federal or state public policy. For instance, if an employer asks an employee to commit an illegal act and the employee refuses, he or she cannot be fired because of it. Furthermore, you cannot fire an employee for reporting a safety hazard or environmental violation. Similarly, a worker cannot be fired for filing a workers’ compensation claim after being injured on the job because the law allows them to do so. In addition, some states also protect workers’ jobs if they need time off to participate in jury duty, serve in the military or vote.Firing employees is an unpleasant but necessary part of running a successful business. Understanding how state and federal laws limit the circumstances in which an employee can be fired can help make the termination process as smooth as possible and help you avoid committing a violation that results in a wrongful termination lawsuit.