What is Wrongful Termination?


Laura Schaefer

Wrongful termination occurs when your employer fires you for an illegal reason. For example, if you reported and refused to participate in:

If you were fired for the above reasons, you may have experienced unlawful termination and may qualify for compensation.

Likewise, if your employer fired you but did not follow their termination policies, you may have grounds for taking legal action.

73,485 individual wrongful termination charges were filed with the EEOC in 2022, more than 50% were the result of race and sexual discrimination.

There are a variety of reasons one may sue for wrongful termination that may not be mentioned in the examples above. If you feel your employment rights were violated, it’s time to contact an employment attorney to verify your legal status.

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What is Considered Wrongful Termination – Common Examples

Employers possess great power during the hiring and firing process, but they’re still beholden to follow the implied covenant of good faith and fair dealing. Employers still have to follow their contracts and keep their word, even if not explicitly stated in writing.

Below are the most common examples of wrongful termination you may experience in the workplace. Make sure to record all forms of evidence such as witness testimonies and necessary legal documents. Proving their actions directly caused your wrongful termination is key to your case.

Discrimination-Based Firing

Federal law prohibits most employers with 15 or more employees from discriminating against workers based on protected classes. These include:

  • Race
  • Color
  • National origin
  • Sexual orientation
  • Gender
  • Pregnancy
  • Religion
  • Age
  • Genetic information
  • Disability

Most states define wrongful termination differently and you may qualify for more than you know. For example, if you were fired right after announcing your pregnancy, you should talk to an employment attorney.


Federal and state laws prohibit employers from retaliating against employees who exercised their legal right to report severe violations in the workplace including:

If you reported a health and safety concern in the workplace and were fired because of it, you may have been unlawfully terminated. Additionally, there are specific laws designed to protect employees who are whistleblowers—meaning those who report illegal activity.

EEOC data from 2022 found that 51% of discrimination claims included a claim for retaliation.

You also have the right to take leave and return to your job without being fired. However, employers must have 50 or more employees for at least 20 weeks a year to be covered by the law.You are eligible for FMLA leave if you have worked at a job for at least one year and for at least 1,250 hours.

Eligible employees can receive up to 12 weeks of unpaid leave. If you were fired due to taking family or medical leave, you may have a wrongful termination lawsuit.

Violation of Employment Contract

If your employer broke a promise by firing you, explicitly or implicitly, it could be considered wrongful termination. You may be able to collect damages – a monetary settlement – for breach of contract.

Written or oral employment contracts sometimes have limits on the employer’s right to let an employee go. For example, the contract might stipulate a certain term or time period. Many states also recognize implied contracts, such as disciplinary policies that give employees the right to named procedures before termination.

Can You Sue for Being Fired Without Warning?

No, being fired without a warning does not automatically violate wrongful termination laws.

Most states follow at-will employment. This means employers can fire their employees for any reason. However, there are specific exceptions designed to give employees some legal protections. A termination is considered wrongful only if it fits within one of these exceptions.

One example is a mass layoff without notice, because it might violate the WARN Act. According to this law, companies must notify workers in advance of mass layoffs. If they fail to provide notice, employees can receive back pay and benefits for up to 60 days.

Other exceptions include firing an employee for acting as a whistleblower or as a form of retaliation. Employers also cannot fire employees for discriminatory reasons.

What to Do After Being Wrongfully Terminated

  1. If you were fired because of discrimination, file a report with the EEOC.
  2. Retaliation for reporting unsafe or illegal work practices may grant you whistleblower protections. Report your termination to the Occupational Safety and Health Administration (OSHA).
  3. If your employer fired you because you exercised rights under a state labor law, report your termination to your state’s labor department.
  4. If your employer fired you because you exercised rights related to leave, wages, or overtime, file a complaint to the Department of Labor. You can contact their Wage and Hour Division’s local office.

Evidence matters in taking any legal action, including unlawful termination. To prove your wrongful termination case, keep written records of all conversations with your supervisors.

Document any potential causes for retaliation. Take notes about any details related to the termination and your dismissal.

Gather up emails, letters, severance agreements, and performance reviews that may relate to your firing. After conversations with your employer about your dismissal, take notes and date them.

How to Prove Wrongful Termination Cases

Wrongful termination requires proving your employer violated federal and state rights granted to employees. Factors that may dramatically increase the likelihood of a successful outcome include:

  • Having an employment lawyer on your side
  • Sending a demand letter
  • Filing a lawsuit
  • Having strong evidence to support your claim

It’s wise to contact an attorney early on in the employment claim process because they can handle the lawsuit paperwork in your stead. They’ll also help you take steps to protect your evidence from your employer.

Finally, once you’ve filed a lawsuit, your attorney can make formal requests for copies of documents, emails, and other evidence in your employer’s possession.

How Often are Wrongful Termination Cases Won?

A survey by Martindale highlighted key insights on how often wrongful termination cases are won. Almost two-thirds (63%) of wrongful termination respondents involving discrimination or harassment received a settlement when they had both written evidence and witnesses.

The number of those who received a settlement dropped to 50% when the claimant had written evidence only. It dropped further to 28% for claimants who only had witnesses to back up their claims.

Of all wrongful termination cases, approximately 90% settle before going to trial. Another recent survey found that when wrongful termination claimants worked with an attorney, 64% received compensation.

What is the Average Settlement for Wrongful Termination Claims?

The monetary amount of an unlawful termination settlement varies depending on the facts of the case, the strength and amount of the evidence, and the employee’s salary. (Wrongful termination settlements are often a multiplier of your salary.)

In an unlawful termination lawsuit, employees can ask for:

  • Lost wages
  • Lost benefits
  • Emotional distress
  • Punitive damages

The average settlement amount for a wrongful termination case ranges from as little as $10,000 on the low-end, to multi-million dollar cases for severe cases.

Are Wrongful Termination Settlements Taxable?

Yes, employees must pay taxes on parts of wrongful firing settlements. This includes the money you receive in the form of compensatory damages, punitive damages, and lost wages. Any settlement amounts for back pay, lost wages, and future pay may also be subject to tax withholdings and payroll taxes.

However, some parts of the settlement are not subject to tax. Talk with your lawyer about this issue; they will be familiar with both your case and the state law in your area.

How Long Do You Have to Sue for Wrongful Termination?

Unlawful termination should not go unpunished, so if you feel you were a victim of employment discrimination, take legal action. Do not wait, as filing a legal action must be done before the statute of limitations expires in your state.

The statute of limitations on an unlawful termination lawsuit ranges from 30 days up to 3 years. The time limit varies depending on the type of case and where you choose to file.

Federal law says discrimination charges must be filed with the EEOC within 180 days of the event taking place.

Find a Local Wrongful Termination Lawyer with LegalASAP

If you feel your employer’s grounds for dismissal were illegal, you may have a wrongful termination case. To speak with a wrongful termination lawyer in LegalASAP’s network for a free consultation, fill out the short evaluation form below or call 888-927-3080.

Laura Schaefer

Laura Schaefer is the author of The Teashop Girls, The Secret Ingredient, and Littler Women: A Modern Retelling. She is also an active co-author or ghostwriter of several nonfiction books on personal and business development. Laura currently lives in Windermere, Florida with her husband and daughter and works with clients all over the world. Visit her online at lauraschaeferwriter.com and linkedin.com.