It is inevitable that at some point you will likely be faced with the difficult task of letting an employee go. The reasons for the decision may be multifaceted. Perhaps your company needs to reduce redundancies or the employee is not fulfilling the role as intended. Whatever the case may be, If an employee is no longer needed, it is imperative that you make certain that the proper laws are being followed when moving forward with the termination.
What is Wrongful Termination?
Termination is classified as being "wrongful" when an employment relationship is ended by an employer in violation of the employee's legal rights in violation of state-specific or federal laws.
California's Fair Employment and Housing Act prohibits discriminatory firing while Title VII of the Civil Rights Act of 1964 focuses on equal employment opportunities at the federal level.
Generally, when you hire an employee, they are considered to be "at-will" in the eyes of the law. "At-will" means that their employment is open-ended and can be terminated at any time by their employer or by themselves without good cause. Therefore, as long as the employee holds a true, "at-will" status, terminating their employment has little to no risk as long as the termination was not premised upon an unlawful reason.
Such unlawful reasons include but are not limited to:
- Terminating because of an employee's protected class (race, religion, sexual orientation, disability, etc.)
- Terminating because of the employee's political beliefs
- Terminating because the employee is pregnant
- Terminating as a form of retaliation because the employee reported laws being broken by the company
An employee's "at-will" status can sometimes be unintentionally modified in such a way that can create legal issues when termination comes into play. Certain actions can create a contract between the employer and the employee.
For example, if you, the employer, provided a handbook to the employee that contained language to the effect of guaranteeing employment for a certain period of time as long as certain procedures were followed, it is possible that the employee will argue that the attempt at termination was wrongful. In such a scenario, you would have to show fair and honest reasons, regulated by good faith that were not trivial, arbitrary or capricious, unrelated to business needs or goals (good cause) for the termination.
If you are facing a wrongful termination claim, you run the risk of being liable for two types of damage awards; compensatory and punitive. In addition, the court may find that the employer has to pay the legal costs of the employee.
Compensatory damages are monies ordered to be paid that are intended to make the plaintiff "whole" and as though the situation never arose. An example of compensatory damages would be wages missed from the time the termination took place or other compensation for harm the employee experienced as a result of being wrongfully terminated.
Punitive damages are monies ordered to be paid that are punishment-based. This type of damage award is usually reserved for situations where the court feels something incredibly offensive was done and it deserves a monetary fine that will help to deter such behavior from taking place in the future.
To avoid the headache of wrongful termination litigation, contact Mohsen Parsa today. Having talented and experienced representation on your side will help to protect the company you worked so hard to build.