An employer cannot dismiss or terminate an employee out of whim. Like any other decisions, he must have a lawful, valid, and logical reason behind the decision. Otherwise, the employer is committing an illegal act known as wrongful dismissal or discharge.
Wrongful discharge is a type of unfair dismissal, which is termination that breaches the employment contract or the company policy. A dismissal is also considered wrongful if the employer failed to notify about the discharge to the employee. The following reasons may also be grounds for a wrongful termination:
- If the employee was dismissed because of his race, religion, color, ethnicity, sexual preference, gender or disability, he is wrongfully terminated. Such action falls under workplace discrimination.
- Employees who report their employer or company to authorities for doing something illegal (also called "whistleblowing") often experience retaliation from them. Retaliation may come in the form of termination, but being terminated for whistleblowing is considered illegal.
- Fabricating negative stories about an employee just to have a reason for the termination is also inappropriate. This is known as Defamation of Character.
- An employee who refuses to do his boss' dirty work cannot be terminated because of that.
- Wrongful discharge may also happen if the proper termination procedure of the company is not followed.
- Employers sometimes make changes around the workplace that makes it intolerable and forces employees to quit. Constructive discharge is also grounds for wrongful termination.
Federal and state government enacted wrongful discharge laws in order to fight off unfair termination. The most prominent is the Civil Rights Act of 1964 which prohibits discrimination. Other laws and provisions that forbid this action are:
- Federal discrimination law
- Fair Credit Reporting Act or Bankruptcy Act
- Rights granted by the US Constitution's First Amendment
- Explicit or implied employment contract
- Employer-union collective bargaining agreement
- Judiciary and Judicial Procedure Act
- Public Policy
- Uniformed Services Employment and Re-employment Rights Act (prohibits a person serving in the military to be terminated from their state-side job; they should be re-employed with the same job after serving duty)
- Federal Medical and Family Leave Act
- Provision under US Equal Employment Opportunity Commission