The Legal Implications of Employee Termination

The termination of an employee is a serious matter. It’s important to understand the legal implications of the decision to terminate an employee. A company must be aware of the laws that govern employee termination and the potential consequences of not following those laws. The following article will discuss the legal issues that could arise if an employee is terminated.

Employment Contracts

When an employee is first hired, they often sign an employment contract. This contract outlines the terms of employment, including the length of the employment, wages, benefits, and other conditions of employment. If an employee is terminated before the end of their contract, the company may be liable for breaching the contract. In some cases, the employee may be able to sue the company for damages.


Employers are prohibited from discriminating against employees on the basis of race, color, religion, sex, national origin, age, disability, or genetic information. If an employer terminates an employee because of any of these protected characteristics, the employee may be able to sue the employer for discrimination. Employers should be sure to document any legitimate, non-discriminatory reasons for termination.

Wrongful Termination

In some cases, an employee may be terminated for a reason that is illegal or against company policy. This is known as wrongful termination. Wrongful termination can include termination for exercising a legal right, such as filing for workers’ compensation or taking medical leave. It can also include termination for refusing to perform an illegal act. An employee who is wrongfully terminated may be able to sue the employer for damages.


Retaliation is when an employer takes an adverse action against an employee for engaging in a legally protected activity. Examples of legally protected activities include complaining about discrimination or harassment, filing a workers’ compensation claim, or participating in an investigation. If an employer retaliates against an employee for engaging in one of these activities, the employee may be able to sue the employer for damages.

Whistleblower Protection

Whistleblower protection laws protect employees who report illegal or unethical conduct by their employers. If an employee is terminated for reporting this type of conduct, they may be able to sue their employer for wrongful termination. The employee may also be able to sue for any other harm that was caused as a result of their termination.

Severance Packages

In some cases, an employer may offer a severance package to an employee who is being terminated. A severance package is a set of benefits that the employer provides in exchange for the employee waiving any legal claims they may have against the employer. The package may include payment of wages, benefits, and other compensation. It is important for employers to ensure that all severance packages comply with the law.

Unemployment Benefits

Under most state laws, employees who are terminated through no fault of their own are eligible to receive unemployment benefits. These benefits are provided to help employees while they are looking for new employment. The amount of benefits and the length of time they can be collected varies by state. The employer may be responsible for paying a portion of the benefits.

Final Considerations

Employers should carefully consider the legal implications of terminating an employee. It is important to understand the laws that apply and ensure that the employee’s rights are not violated. Employers should also consider offering a severance package, as this can help protect the employer from legal liability.


Terminating an employee can have serious legal implications. It is important for employers to understand the laws that apply and take steps to ensure that they are not violating any of the employee’s rights. Offering a severance package can also help protect the employer from legal liability.

Thursday, 18 July 2024