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Employment law

wrongful termination

Wrongful termination or wrongful discharge is a general reference to the illegal termination or firing of an employee. Because most employment is at will, for an indefinite term, and may be terminated at any time, wrongful termination or wrongful discharge claims are generally limited to circumstances under which (1) the employer violated an employee’s written employment agreement and terminated the employee for a reason other than good cause, or (2) the employer terminated or fired the employee for a discriminatory reason (age, race, color, sex, national origin, disability) in violation of federal or state law.

Most states follow the employment-at-will doctrine, and employment for an indefinite term may be terminated at will and without cause. Absent a specific contract term to the contrary, this doctrine allows an employee to quit or be terminated without liability on the part of the employer or the employee, with or without cause.

A discharged employee who asserts that the parties have contractually agreed to limit the employer’s right to terminate the employee at will has the burden of proving an express agreement or written representation to that effect. To rebut the presumption of employment at will, an employment contract must directly limit—in a meaningful and special way—the employer’s right to terminate the employee without cause.

In an employment-at-will situation, an employee policy handbook or manual does not, by itself, constitute a binding contract for the benefits and policies stated unless the manual uses language clearly indicating an intent to do so. In those cases holding that personnel manuals may create contractual rights, there is either language in the manuals expressing contractual intent, or the manuals were complemented by oral agreements making the policy provisions binding.

Thus, to prove a claim for wrongful discharge in breach of an employment agreement, a plaintiff must prove (1) the plaintiff had an enforceable employment agreement that directly limited—in a meaningful and special way—the employer’s right to terminate the employee without cause; (2) the plaintiff performed, tendered performance, or was excused from performing the contractual obligations; (3) the defendant breached the contract by wrongfully discharging the plaintiff from employment; and (4) the defendant’s breach of the employment contract caused the plaintiff damage.

The employment at will doctrine does not permit an employer to discriminate against an employee in violation of state or federal law, including Title VII of the Civil Rights Act of 1964 (42 U.S.C. §2000e); the Age Discrimination in Employment Act of 1967 (ADEA) (29 U.S.C. §621); and the Americans with Disabilities Act of 1990 (ADA) (42 U.S.C. §12101).

In Texas, the principle of 'employment at will' prevails, meaning that either the employer or employee can terminate employment at any time for any reason, except for illegal reasons. However, wrongful termination claims can arise if an employer violates a written employment agreement by terminating an employee without good cause or if the termination is based on discriminatory reasons, which is prohibited under federal laws such as Title VII of the Civil Rights Act, the Age Discrimination in Employment Act, and the Americans with Disabilities Act. To challenge a termination under a claim of breach of an employment agreement, the employee must demonstrate the existence of an enforceable contract that specifically limits the employer's right to terminate without cause, fulfillment of their own contractual obligations, a breach of contract by the employer, and damages resulting from the breach. Employee handbooks or manuals may create contractual rights if they contain language that clearly indicates an intent to do so. Despite the at-will employment doctrine, employers are not allowed to discriminate against employees based on protected characteristics such as age, race, color, sex, national origin, or disability.


Texas Statutes & Rules

Texas Labor Code, Title 2, Chapter 21 - Employment Discrimination
This chapter is relevant as it outlines the unlawful employment practices in Texas, which include wrongful termination based on discrimination.

The Texas Labor Code prohibits employers from discriminating against employees based on race, color, disability, religion, sex, national origin, or age. It is unlawful for an employer to terminate an individual's employment for any of these discriminatory reasons. This statute aligns with federal laws such as Title VII of the Civil Rights Act, the Americans with Disabilities Act (ADA), and the Age Discrimination in Employment Act (ADEA). An employee who believes they have been wrongfully terminated due to discrimination may file a complaint with the Texas Workforce Commission Civil Rights Division.

Texas Labor Code, Title 2, Chapter 61 - Payment of Wages
This chapter is relevant as it addresses the timely payment of wages upon termination, which can be a component of a wrongful termination claim if an employer fails to comply.

Under this chapter, an employer is required to pay an employee who has been terminated or laid off, all wages due no later than the sixth day after the date of discharge. If an employer fails to pay these wages in a timely manner, the employee may have a claim for damages. This statute is important for employees who have been wrongfully terminated and have not received their final paycheck in accordance with the law.

Texas Labor Code, Title 4, Chapter 101 - Texas Workers' Compensation Act
This chapter is relevant as it prohibits employers from terminating an employee for filing a workers' compensation claim, which would be considered wrongful termination.

The Texas Workers' Compensation Act protects employees from retaliation by their employers for filing a workers' compensation claim. An employer may not discharge or in any other manner discriminate against an employee because the employee has filed a workers' compensation claim in good faith. If an employee is terminated for such a reason, they may have a claim for wrongful termination under this statute.

Texas Labor Code, Title 2, Chapter 20 - Employment Discrimination; Retaliation
This chapter is relevant as it provides protection against retaliation for employees who oppose discriminatory practices, which can include wrongful termination.

This chapter makes it unlawful for an employer to retaliate against an employee who opposes a discriminatory practice, files a discrimination charge, or testifies, assists, or participates in an investigation, proceeding, or hearing under the Texas Labor Code. Wrongful termination as a form of retaliation is prohibited under this statute, and employees who are terminated for engaging in protected activities may have a claim for wrongful discharge.

Texas Business and Commerce Code, Title 1, Chapter 2 - Uniform Commercial Code; Sales
This chapter is relevant as it may pertain to employment contracts and the obligations of parties under a contract, which can be related to wrongful termination claims.

While the Uniform Commercial Code generally governs the sale of goods, certain principles such as the obligation of good faith and fair dealing in the performance and enforcement of contracts may be applicable to employment contracts. If an employment contract exists and the employer terminates the employee in violation of the terms of the contract or without good faith, the employee may have a basis for a wrongful termination claim.

Federal Statutes & Rules

Title VII of the Civil Rights Act of 1964 (42 U.S.C. §2000e et seq.)
This statute is relevant as it prohibits employment discrimination based on race, color, religion, sex, and national origin, which are potential grounds for a wrongful termination claim.

Title VII of the Civil Rights Act of 1964 makes it unlawful for an employer to fail or refuse to hire, discharge, or otherwise discriminate against any individual with respect to his or her compensation, terms, conditions, or privileges of employment, because of such individual's race, color, religion, sex, or national origin. It applies to employers with 15 or more employees and includes private employers, state and local governments, and educational institutions. Title VII also establishes the Equal Employment Opportunity Commission (EEOC) to enforce its provisions. Employees who believe they have been wrongfully terminated in violation of Title VII must first file a charge with the EEOC before they can bring a lawsuit in federal court.

Age Discrimination in Employment Act of 1967 (ADEA) (29 U.S.C. §621 et seq.)
This statute is relevant as it protects employees from discrimination based on age, which could be a factor in a wrongful termination case.

The Age Discrimination in Employment Act of 1967 prohibits employment discrimination against persons 40 years of age or older. The ADEA applies to employers with 20 or more employees, including state and local governments, employment agencies, and labor organizations. The Act makes it unlawful to discriminate against a person because of their age with respect to any term, condition, or privilege of employment, including hiring, firing, promotion, layoff, compensation, benefits, job assignments, and training. Similar to Title VII, individuals must file a charge with the EEOC before pursuing a claim in court.

Americans with Disabilities Act of 1990 (ADA) (42 U.S.C. §12101 et seq.)
This statute is relevant as it prohibits discrimination against qualified individuals with disabilities, which can be a basis for wrongful termination claims.

The Americans with Disabilities Act of 1990 prohibits discrimination against individuals with disabilities in all areas of public life, including jobs, schools, transportation, and all public and private places that are open to the general public. The ADA's employment provisions apply to private employers, state and local governments, employment agencies, and labor unions with 15 or more employees. Employers are required to provide reasonable accommodations to qualified employees with disabilities, unless doing so would cause undue hardship. The ADA also prohibits retaliation against individuals for asserting their rights under the Act. As with other federal employment laws, individuals must file a charge with the EEOC before they can file a lawsuit in federal court.