When is an employer’s firing of an employee wrongful?
We first must exclude public employees working for government. They have certain rights to procedural “due process” and standards for termination and review of terminations. We may deal with that issue in another column.
If an employee does not work for a government or quasi-governmental employer, the next question is whether the employee has a written contract. We most often see employment contracts with executive employees of larger companies, but occasionally other employees may have them as well. Obligations and definitions can be defined by contract, including limiting the right to fire based on “cause” and also providing a term of employment. If a written contract exists, it likely controls.
The other huge exception to the rule discussed below is protection provided by federal and state statutes against discrimination based on sex, race, age, and other specifically defined acts which are by statute deemed to be wrongful – such as firing an employee who properly files a workers compensation claim or otherwise exercises rights for medical or family leave. This, too, is another topic for another column.
Most of the above categories are answered by a few questions. For whom do you work? Is it a governmental entity or agency with manuals speaking to the issue of termination? Do you believe you were fired based on your race, sex, age, or other specifically protected status or conduct? If so, why? Do you have a written employment contract?
If the answer to all the above does not provide an exception, then we go to the law of North Carolina as it generally applies to the employer-employee relationship. North Carolina is an “at-will” employment state. An employee’s continued employment is generally “at the will” of the employer and the employer can fire an employee for almost any reason other than the exceptions noted above. Most inquiries from fired employees involve personal conflicts between supervisors and the supervised. Most inquiries boil down to employees upset because their supervisors were unfair and the conflict was caused by the supervisors being unreasonable or otherwise wrong. This isn’t enough. The courts will not intervene in personality conflicts or try to impose a standard of “proper conduct” on supervisors as long as the issues don’t involve sex, race, religion, age, or other protected status.
However, there is a very meaningful further exception to the right to fire called the “public policy exception”. This judicial doctrine (it isn’t a statute) arose from a case where a nurse was fired because she provided truthful testimony in a medical negligence case against her employer (she sued, and later went to law school and is now practicing law in N.C.). Our appellate courts said although employers in N.C. can generally fire for any reason, that does not mean they can fire for a reason which violates N.C.’s public policy.
As you can imagine, this has spawned much litigation through the years since. This “public policy” exception has been narrowly construed and applied. A trucking company cannot fire an employee driver based on his refusal to make fraudulent entries in the required driving log. An employer cannot fire an employee for complying with jury service requirements. Essentially, an employer cannot fire an employee for a reason that is inconsistent with legal rights that are important to the general public. For example, an employee who is fired because he “blows the whistle” on an employer’s serious, illegal activities. In these situations, NC Courts sometimes rule that the public interest (such as punishing illegal corporate conduct) outweighs an employer’s right to terminate an employee “at-will”. Again, though, this exception has been limited and narrowly applied. One cannot successfully sue an employer after firing an employee for exercising a relatively trivial right that has no substantial public interest.
The takeaway lessons? If you want protections as an employee, you better negotiate a favorable written contract. Otherwise, you have very little job security unless your firing offends very important N.C. public policy. On the flipside, as an employer, you have wide discretion to make employment decisions. However, your discretion is not unlimited, and you could be in serious legal trouble if you abuse it. For the honest employers out there – always document issues with employees, corrective actions attempted, performance reviews, etc. So that if you must fire, you have adequate documentation proving that your reasons and motivations were legitimate.
– Lamar Armstrong, Jr.
P.S. Please call us at 919-934-1575 if you need advice concerning an employment dispute.