What Is Wrongful Termination? Federal and State Laws Explained
Wrongful termination occurs when an employer fires an employee for an illegal reason. Under federal and state law, illegal reasons for termination include discrimination based on protected characteristics, retaliation for exercising legal rights, breach of an employment contract, and violation of public policy. A termination that is unfair but does not violate a specific law is generally not considered wrongful termination.
Most employment in the United States is at-will, meaning employers can terminate employees for any lawful reason or no reason. However, at-will employment does not permit termination for reasons that violate federal or state statutes, public policy, or contractual obligations.
Source: USA.gov — Wrongful Termination
Federal Laws That Prohibit Wrongful Termination
Multiple federal statutes establish specific protections against wrongful termination. These laws apply in all 50 states regardless of at-will employment status.
Anti-Discrimination Laws
Federal law prohibits employers from terminating employees based on protected characteristics. The U.S. Equal Employment Opportunity Commission (EEOC) enforces these statutes:
| Federal Employment Discrimination Laws | ||
|---|---|---|
| Federal Law | Protected Characteristic | Employer Coverage |
| Title VII of the Civil Rights Act of 1964 | Race, color, religion, sex (including pregnancy, sexual orientation, gender identity), national origin | 15+ employees |
| Age Discrimination in Employment Act (ADEA) | Age (40 and over) | 20+ employees |
| Americans with Disabilities Act (ADA) | Disability | 15+ employees |
| Pregnancy Discrimination Act | Pregnancy, childbirth, related medical conditions | 15+ employees |
| Genetic Information Nondiscrimination Act (GINA) | Genetic information | 15+ employees |
| Equal Pay Act (EPA) | Sex-based wage discrimination | Virtually all employers |
Many states and localities enforce additional anti-discrimination protections that extend to characteristics not covered by federal law, including sexual orientation, gender identity, marital status, and political activity.
Source: U.S. Equal Employment Opportunity Commission — Laws Enforced by the EEOC
Anti-Retaliation Laws
Federal law prohibits employers from firing employees in retaliation for engaging in protected activity:
| Federal Retaliation Protections in Employment Law | |||
|---|---|---|---|
| Federal Law | Protected Activity | Enforcing Agency | Filing Deadline |
| Title VII / ADA / ADEA / GINA | Filing a discrimination charge, participating in EEOC investigation | EEOC | 180 days (300 in FEPA states) |
| Fair Labor Standards Act (FLSA) | Filing wage or hour complaints | DOL WHD | 2 years (3 if willful) |
| Family and Medical Leave Act (FMLA) | Requesting or taking qualified leave | DOL WHD | 2 years (3 if willful) |
| Occupational Safety and Health Act | Reporting safety or health violations | OSHA | 30 days |
| National Labor Relations Act (NLRA) | Union organizing, collective bargaining, concerted activity | NLRB | 6 months |
| Sarbanes-Oxley Act | Reporting securities fraud | OSHA | 180 days |
| Whistleblower Protection Act | Federal employees reporting misconduct | Office of Special Counsel | 3 years |
Source: USA.gov — Wrongful Termination; U.S. Department of Labor — Whistleblower Protections
Common Law Exceptions to At-Will Employment
In addition to federal statutory protections, most states recognize common law exceptions that provide grounds for wrongful termination claims:
Public Policy Exception (42 States + DC)
An employer cannot terminate an employee for reasons that violate the state’s established public policy. This includes firing an employee for:
- Refusing to perform an illegal act at the employer’s request
- Exercising a statutory right (filing a workers’ compensation claim, voting, serving jury duty)
- Performing a public obligation (military service, responding to a subpoena)
- Reporting illegal activity or safety violations (whistleblowing)
States that do NOT recognize the public policy exception: Alabama, Florida, Georgia, Louisiana, Maine, Nebraska, New York, and Rhode Island.
Implied Contract Exception (36 States + DC)
A wrongful termination claim may arise when an employer’s conduct, written policies, or verbal statements create an implied agreement that limits termination. An implied contract may be formed through employee handbook language guaranteeing termination only “for cause,” verbal assurances of long-term employment, or established progressive discipline practices that create a reasonable expectation of continued employment.
Covenant of Good Faith and Fair Dealing (11 States)
In 11 states, employers are required to act in good faith when terminating employees. Under this exception, an employer cannot fire an employee to avoid paying earned benefits, commissions, or retirement benefits, or for other reasons that constitute bad faith.
States that recognize this exception: Alabama, Alaska, Arizona, California, Delaware, Idaho, Massachusetts, Montana, Nebraska, Utah, and Wyoming.
Examples of Wrongful Termination
Based on federal statutes and EEOC guidance, the following are examples of terminations that may constitute wrongful termination:
Discrimination-based termination:
- An employee is fired after disclosing a pregnancy
- An employee over 40 is replaced by a significantly younger employee with fewer qualifications
- An employee with a disability is terminated instead of receiving a reasonable accommodation
- An employee is dismissed after the employer learns of the employee’s national origin or religion
Retaliation-based termination:
- An employee is fired after filing a discrimination charge with the EEOC
- An employee is terminated after reporting safety violations to OSHA
- An employee is dismissed after requesting FMLA leave
- An employee is fired after filing a wage complaint with the Department of Labor
- An employee is terminated after participating in union organizing activity
Public policy-based termination:
- An employee is fired for refusing to commit perjury or fraud at the employer’s direction
- An employee is terminated for serving on jury duty
- An employee is dismissed for filing a workers’ compensation claim after a workplace injury
- An employee is fired for reporting the employer’s criminal conduct to law enforcement
Contract-based termination:
- An employee with a written employment contract specifying a term of employment is terminated before the term expires without cause
- An employee is fired despite an employee handbook that guarantees progressive discipline before termination
Wrongful Termination vs. Unfair Termination
Not every unfair termination is illegal. The distinction between wrongful termination and unfair termination is a legal one:
| Wrongful Termination vs. Unfair Termination | ||
|---|---|---|
| Wrongful Termination | Unfair Termination | |
| Legal definition | Termination that violates a specific federal or state law, public policy, or contractual obligation | Termination that may seem unjust but does not violate any law or legal doctrine |
| Legal recourse | Employee may file a complaint with EEOC, OSHA, DOL, NLRB, or state agency; may pursue a civil lawsuit | Generally no legal remedy in at-will employment states |
| Examples | Fired for race, fired for reporting safety violations, fired in breach of contract | Fired due to personality conflict, office politics, or personal dislike |
| Burden of proof | Employee must demonstrate that the actual reason for termination was illegal | N/A — no legal claim exists |
This distinction is important: an employee who feels the termination was unfair does not necessarily have a wrongful termination claim. The termination must violate a specific legal protection.
How to File a Wrongful Termination Complaint
The filing process depends on the type of wrongful termination claim:
Discrimination Claims (EEOC)
Employees who believe they were fired due to discrimination must file a Charge of Discrimination with the EEOC before pursuing a lawsuit. The EEOC enforces Title VII, the ADA, the ADEA, GINA, and the Equal Pay Act.
Filing deadline: 180 calendar days from the date of termination. This deadline extends to 300 calendar days if a state or local Fair Employment Practices Agency (FEPA) also enforces a law prohibiting the same type of discrimination.
How to file: Through the EEOC Public Portal at https://publicportal.eeoc.gov, by visiting an EEOC field office, or by phone at 1-800-669-4000.
Process: After filing, the EEOC may offer mediation between the employee and employer. If mediation does not resolve the charge, the EEOC investigates. The investigation may result in a settlement, a determination of reasonable cause, or a Notice of Right to Sue allowing the employee to file a lawsuit in federal court.
Source: EEOC — Filing a Charge of Discrimination
Safety and Health Retaliation Claims (OSHA)
Employees fired for reporting workplace safety violations file whistleblower complaints with OSHA.
Filing deadline: 30 days from the date of termination (deadlines vary by specific whistleblower statute).
How to file: Online at https://www.osha.gov/whistleblower/WBComplaint, by phone at 1-800-321-6742, or at a local OSHA office.
Source: OSHA — Whistleblower Complaint
Wage and Hour Retaliation Claims (DOL)
Employees fired for exercising rights under the FLSA or FMLA file complaints with the DOL Wage and Hour Division.
Filing deadline: 2 years from the date of termination (3 years if the violation was willful).
How to file: Online at https://www.dol.gov/agencies/whd/contact/complaints or by contacting a local WHD office.
Union Activity Retaliation Claims (NLRB)
Employees fired for union activity or concerted protected activity file unfair labor practice charges with the NLRB.
Filing deadline: 6 months from the date of the unfair labor practice.
How to file: Through the NLRB at https://www.nlrb.gov/about-nlrb/what-we-do/investigate-charges.
State Law Claims
Employees may file claims with their state labor department for violations of state employment laws. Filing deadlines and procedures vary by state. A directory of state labor offices is available at https://www.dol.gov/agencies/whd/state/contacts.
Statute of Limitations for Wrongful Termination Claims
Filing deadlines vary by claim type and jurisdiction. Missing a deadline may permanently bar the claim.
| Federal Deadlines for Wrongful Termination Claims | ||
|---|---|---|
| Claim Type | Federal Deadline | Notes |
| EEOC discrimination charge (Title VII, ADA, GINA) | 180 days (300 with state FEPA) | Must file charge before lawsuit |
| Age discrimination (ADEA) | 180 days (300 with state agency) | Can file lawsuit 60 days after charge without Right to Sue letter |
| OSHA whistleblower | 30 days | Varies by specific statute (some allow 90 or 180 days) |
| FLSA retaliation | 2 years (3 if willful) | No administrative filing required before lawsuit |
| FMLA retaliation | 2 years (3 if willful) | No administrative filing required before lawsuit |
| NLRA unfair labor practice | 6 months | Filed with NLRB |
| State wrongful discharge claims | Varies by state | Typically 1–6 years depending on jurisdiction and claim type |
| Breach of employment contract | Varies by state | Governed by state contract law statutes of limitations |
| Source | EEOC — How to File a Charge of Employment Discrimination | |
Remedies Available in Wrongful Termination Cases
The remedies available to employees who prevail in wrongful termination claims depend on the applicable law and jurisdiction:
Under federal anti-discrimination laws (Title VII, ADA, ADEA):
- Back pay (wages lost from termination to resolution)
- Front pay (future lost wages if reinstatement is not feasible)
- Compensatory damages (emotional distress, pain and suffering — capped under Title VII and ADA)
- Punitive damages (for intentional discrimination — capped under Title VII and ADA)
- Reinstatement to the former position
- Attorney’s fees and court costs
Under the FLSA:
- Back pay for the retaliatory period
- Liquidated damages equal to back pay
- Attorney’s fees and court costs
Under state wrongful discharge laws:
- Varies by state — some states cap damages, others allow uncapped compensatory and punitive damages
- Montana WDEA limits recovery to up to four years of lost wages; punitive damages only for actual fraud or malice
Source: 29 U.S.C. § 216(b); 42 U.S.C. § 1981a (Title VII damages caps)
Wrongful Termination and Unemployment Benefits
Employees who have been wrongfully terminated are generally eligible for unemployment insurance benefits. Filing for unemployment benefits is a separate process from pursuing a wrongful termination claim, and receiving unemployment does not prevent an employee from also filing a discrimination charge or other legal complaint.
However, the employer’s stated reason for the termination may affect unemployment eligibility. If an employer contests the unemployment claim by alleging misconduct, the state unemployment agency will make an independent determination based on the evidence provided by both parties.
Source: U.S. Department of Labor — Unemployment Insurance
Frequently Asked Questions
What is wrongful termination?
Wrongful termination occurs when an employer fires an employee for an illegal reason. Illegal reasons include discrimination based on protected characteristics, retaliation for exercising legal rights, breach of an employment contract, and in most states, violation of public policy. Not every unfair termination qualifies as wrongful termination — the reason must violate a specific law or legal doctrine.
What federal laws prohibit wrongful termination?
Federal laws prohibiting wrongful termination include Title VII of the Civil Rights Act (race, color, religion, sex, national origin), the ADA (disability), the ADEA (age 40+), GINA (genetic information), the FMLA (retaliation for taking leave), the FLSA (retaliation for wage complaints), the OSH Act (retaliation for safety complaints), and the NLRA (retaliation for union activity). These laws are enforced by the EEOC, DOL, OSHA, and NLRB.
What are examples of wrongful termination?
Examples include termination after filing a discrimination complaint with the EEOC, being fired after requesting FMLA leave, dismissal after reporting workplace safety violations to OSHA, termination due to pregnancy or disability, and firing an employee for refusing to commit an illegal act. Each example involves termination for a reason that violates a specific federal or state law.
How long do employees have to file a wrongful termination claim?
Filing deadlines vary by claim type. EEOC discrimination charges must be filed within 180 days (300 days in states with a Fair Employment Practices Agency). OSHA whistleblower complaints must be filed within 30 days. FLSA and FMLA retaliation claims have a 2-year deadline (3 years if willful). NLRB unfair labor practice charges must be filed within 6 months. State law deadlines vary by jurisdiction.
What is the difference between wrongful termination and unfair termination?
Wrongful termination violates a specific law, public policy, or contractual obligation and provides grounds for a legal claim. Unfair termination may feel unjust but does not violate any law. Under at-will employment, an employer can fire an employee for reasons that are unfair (personality conflict, office politics) as long as the reason is not illegal. Only wrongful termination provides legal recourse.
Where do employees file a wrongful termination complaint?
The filing location depends on the basis of the claim. Discrimination claims are filed with the EEOC. Safety retaliation claims are filed with OSHA. Wage and hour retaliation claims are filed with the DOL Wage and Hour Division. Union-related retaliation claims are filed with the NLRB. State law claims are filed with the state labor department.
What damages are available in a wrongful termination case?
Available remedies depend on the applicable law and may include back pay, front pay, compensatory damages for emotional distress, punitive damages, reinstatement, and attorney’s fees. Federal anti-discrimination laws cap compensatory and punitive damages based on employer size. State law remedies vary by jurisdiction.
Can I be wrongfully terminated from an at-will job?
Yes. At-will employment permits termination for any lawful reason, but it does not permit termination for illegal reasons. An at-will employee who is fired for a discriminatory reason, in retaliation for protected activity, or in violation of public policy has a wrongful termination claim regardless of at-will status.