Understanding Wrongful Termination Lawsuits

Being fired from a job can be stressful. The term “wrongful termination” is used when an employee has been illegally terminated for a reason like discrimination. Wrongful termination is not an answer for simply being terminated unexpectedly.

The number of layoffs also shows how commonplace job loss is. In 2025, according to the Bureau of Labor Statistics, there were 21.2 million layoffs and discharges, a 1.2 million increase from the previous year.

In fiscal year 2025, the Equal Employment Opportunity Commission (EEOC) received over 88,000 new discrimination charges and resolved nearly 91,000 of these cases.

Learning about what makes a good argument and the time limits helps employees focus on the issues that matter most for their rights at work.

Here's a closer look at wrongful termination suits and the circumstances that may lead to a claim.

What Actually Makes a Termination Wrongful

Not every firing is a violation of the law. 49 states and Washington, D.C., follow at-will employment. Under this system, both employees and employers may terminate their working relationship anytime. Montana is the only state that does not follow an at-will employment system. Wrongful termination depends on whether the firing breaks a law, goes against public policy, or breaches an employment contract. In some states, written company policies like a disciplinary policy can count as an agreement too.

Discrimination falls into the most explicit group of terminations. For example, firing someone for reasons based on their race, sex, age, disability, religion, national origin, or other protected class characteristics is an example of discrimination. The law protects these characteristics, and firing someone for them is unlawful.

Retaliation is also associated with firing. It implies firing an employee for participation in some legally protected activities, including complaining about harassment, making a workers' compensation claim, or cooperating in the investigation of some issue in the workplace.

Whistleblowers Occupy Their Own Protected Category

Those individuals who expose any illegal activities, be it to their employers or to the regulatory body, belong to a certain well-protected category according to many state and federal statutes.

Being unwilling to participate in any such activity under an employer’s directive also falls into the same category. It also covers firings meant to stop an employee from reporting illegal conduct.

When Quitting Counts as Being Fired

One of the less obvious doctrines in this field relates to employees that effectively resign from their positions.

Constructive discharge happens when the employer makes such work conditions unbearable that the employee is forced to leave his or her job. The court may treat these circumstances as an equivalent of termination of employment.

In short, the question is not how dissatisfied an individual may have been with certain situations to the point of quitting, but whether a normal individual would react the same way in those situations. A tough boss and heavy workload are normally not sufficient to satisfy the requirements of the doctrine.

This doctrine exists so employers can't avoid responsibility by making the workplace so harsh that employees quit instead of being fired.

In this case, it is advised that a worker talk to a lawyer before they submit their resignation. Information that can be collected while still under a company's employment is useful for lawyers who are building a case.

An Orange County wrongful termination lawyer typically looks at these cases to see if an employee voiced concerns or objections about the job before they left and the employer’s response. Proof of those complaints and the employer's response can make a constructive discharge claim much stronger.

Severance Agreements Are Not Always the Final Word

When an employer fires a person, they may offer a severance package in exchange for the signing of a release document. However, such contracts can be subject to certain limitations.

For workers 40 and older, federal law requires the release to give them 21 days to think about it and 7 days to revoke it after signing.

One thing people often overlook is having a lawyer review the release before signing.

The Range of Fact Patterns Behind These Cases

Not all wrongful termination claims are the same. Some stem from very different circumstances.

Gender and age are among the reasons cited in these complaints. Discrimination cases that make it to trial are often covered in the news.

Firing someone after they report illegal activity isn't the same as firing someone for asking for a disability accommodation, but both can be wrongful termination.

What a Successful Claim Can Recover

If a lawsuit for wrongful termination is successful, it will either lead to a reinstatement or a financial award, or even both, depending on the claims made by the plaintiff and the ruling given by the court or negotiated at settlement.

The money awarded in the process usually compensates for any salary the plaintiff missed from the day the employee was terminated up until the end of their case. When reinstatement isn't possible, courts may also award future lost pay, known as front pay.

Why Documentation Matters From the Start

Winning or losing a case for wrongful termination depends heavily on the evidence presented, which is much easier to obtain when still employed.

Documentation of performance evaluations, complaints made, and the exact steps that have been taken to result in a termination or resignation will provide the lawyer with material that can be used to form a case.