Can you sue your former employer for “wrongful discharge”?
According to the National Conference of State Legislatures, “[e]mployment relationships are presumed to be ‘at-will’ in all U.S. states except Montana. The U.S. is one of a handful of countries where employment is predominantly at-will. Most countries throughout the world allow employers to dismiss employees only for cause. Some reasons given for our retention of the at-will presumption include respect for freedom of contract, employer deference, and the belief that both employers and employees favor an at-will employment relationship over job security.” (http://www.ncsl.org/research/labor-and-employment/at-will-employment-overview.aspx, last accessed 10/22/14)
Thus, the great majority of states in the U.S., is an “at-will” state. This means that an employer can terminate an employee for a good reason, a bad reason, or no reason at all, provided that the termination does not violate anti-discrimination or other relevant statutes. There are exceptions for certain classes of employees, such as tenured public school teachers and others working under merit systems, as well as exceptions for engaging in statutorily protected activities such as serving on a jury.
Most employees are employed “at-will” and may quit or be fired at the whim of either party. There are no public policy exceptions in most States to the at-will doctrine. Any lawsuit that an employee may have legal and factual grounds to bring for “wrongful discharge” would be an action for breach of contract; there is no tort (with their attractive unlimited jury damages and potential punitive damages) for wrongful discharge.
Breach of contract damages are generally limited to actual damages resulting from the breach. Punitive damages are not allowed for breach of contract. Moreover, an employee suing his former employer for breach of contract has a duty to lessen the damages from the employer’s breach. This is called the “duty to mitigate”.
As with any other kind of lawsuit, the employee should talk to an attorney as soon as possible because he or she has a limited period of time to file their lawsuit.
Certain highly placed executives may have a written employment agreement for a specified term of employment which spells out in what circumstances the company may terminate the employment relationship and/or under what conditions the employee may resign. Those are far and away the exception, and whether a terminated employee may sue her company under such circumstances will largely depend on the terms of the written contract.