David Fulleborn
Senior Employment Counsel

Written by: David Fulleborn

“Wrongful discharge” and “wrongful termination” are terms often used to describe any unfair termination from employment.  These are probably the two terms that we hear most often from potential clients when they are terminated. The terminated employees say they need a “wrongful discharge attorney” or a “wrongful termination lawyer.” Many prospective clients also use these terms in describing what happened to them after they experienced a “hostile work environment.”

While the meaning of these terms appears self-explanatory, they are very particular legal terms of art that define an exception to the doctrine of “at-will employment.” The definition of “wrongful discharge” or “wrongful termination” as used by the courts is far narrower than the layman’s definition of an unfair or unjust firing. The legal system’s differentiation between the layman’s definition and the legal definition of wrongful discharge or wrongful termination is a perfect example of exactly why it is so critical to hire a lawyer to represent you in your employment dispute.

The terms “wrongful discharge” and “wrongful termination” are shorthand for a legal claim properly stated as common law wrongful discharge in violation of public policy. That’s quite a mouthful, but we’ll break it down for you.

Employment Contract
At-Will vs. Right to Work

Before we can talk about common law wrongful discharge in violation of public policy, which is an exception to the doctrine of at-will employment, it’s necessary to understand what it means to be employed “at-will.”

“At-will” is another term that often confuses employees. Many believe that employment “at-will” relates to whether they live in a “right to work state.” For some reason, people have a misconception that the two terms are antonyms – you either live in an “at-will” state or a “right to work” state. The reality is that the two terms have nothing to do with each other.

The term “right to work” deals with whether a labor union can force you to join it. (FYI – we don’t practice labor law or deal with disputes with unions, but we’re happy to provide you with a referral to some experienced labor attorneys that can help you.)

The term “at-will” deals with whether your employer must have just cause to terminate you, or whether your employer can terminate you for any reason. In almost every state, your employer can terminate you for any reason and at any time, so long as that reason is not illegal. Similarly, you can quit your job at any time and for any reason. Contrast that with what it means to be in a right to work state, and you’ll see that it has nothing to do with at-will employment.

At the outset, it’s important to know that almost all employees working for a private company are employed at-will. We say “almost all” because there are technical exceptions such as those under Montana state law, and other employees with employment contracts that dictate different terms. Nearly all employees of private companies in Florida, Virginia, the District of Columbia, and elsewhere across the U.S. (we practice in too many states to list here), are engaged in an at-will relationship with their employer.

So What is Wrongful Discharge?

Wrongful discharge is common law (judge-made) rule that provides an exception to at-will employment. Under this doctrine, there are three generally recognized reasons that an employer cannot fire an employee.

First, an employer cannot fire an employee for engaging in something that the employee has a statutory right to do. For example, an employer cannot fire an employee for filing a workers’ compensation claim.

Second, an employer cannot fire an employee for refusing to break the law. For example, if an employee refuses to steal money or commit an act of violence, an employer cannot terminate an employee for refusing an illegal instruction.

Lastly, an employer cannot terminate an employee when that termination would violate the public policy of the state. For example, if an employee reports illegal or unsafe conditions, it would generally be a violation of public policy to report an employee for making such a report.  

Overlap with Other Laws – A Trap for the Unwary

If it sounds like common law wrongful discharge might overlap with other employment laws, that’s because it does. For example, under the False Claims Act, 31 U.S.C. § 3730(h), an employer cannot retaliate against an employee because the employee takes one or more lawful acts to stop their employer from submitting false claims for payment to the federal government.  It would also likely be a violation of public policy to fire an employee who refused to submit a false bill to the government or who reported to the government their employer’s fraudulent billing.

States vary widely in how they have dealt with this overlap. Still, typically, courts have found that an employee cannot pursue a common law wrongful discharge claim where another statutory remedy exists. For example, in King v. Marriott Int’l, Inc., 866 A.2d 895 (Md. Ct. Spec. App. 2005), the Maryland Court of Special Appeals held that an employee who alleged that her employer fired her after objecting to a questionable proposed transfer of funds from an employee medical plan to a general corporate account could not pursue her common law wrongful discharge claim because the Employee Retirement Income Security Act (ERISA) already afforded her protection from termination.  The court found that the employee should have pursued her claim under ERISA instead.

Similarly, in a more recent case, the Michigan Court of Appeals ruled that a management-level auditor could not pursue a common law wrongful discharge claim because of overlapping whistleblower protections found in the Sarbanes-Oxley Act of 2002.  In Nezwisky v. Borgwarner, Inc., No. 346346 (Mich. Ct. App. Apr. 16, 2020), the plaintiff claimed that her employer fired her in retaliation for objecting to alleged corporate fraud where the anti-retaliation provisions of the Sarbanes-Oxley Act of 2002 provided her with overlapping whistleblower protection. 

Yet, not all seemingly overlapping claims are precluded.  If there are separate sources of public policy that the employee can point to that would prohibit their termination, it may still be possible to bring a common law wrongful discharge claim. One such area is quid pro quo sexual harassment. Sexual harassment is a form of sex discrimination prohibited by Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e-2(a)(1), and many similar state and local laws. Some courts have allowed victims of quid pro quo sexual harassment to pursue common law wrongful discharge claims based on the public policy found in state laws prohibiting prostitution, holding that quid pro quo sexual harassment is theoretically a form of soliciting prostitution. 

Remedies

A prevailing employee can typically recover back pay, front pay, and compensatory damages.  In particularly egregious cases, courts may also award punitive damages to punish an employer and to dissuade other employers from committing similar bad acts.  However, unlike most statutory laws that protect employees, there is generally no way to recover your attorney’s fees even if you win a common law wrongful discharge claim.

It’s Important to Hire an Experienced Employment Attorney

Common law wrongful discharge is a particularly nuanced area of law. It’s important to hire an experienced employment attorney to carefully evaluate the facts of your case and identify all of the possible claims and remedies.  Call our office today for a consultation.