Terminating an employee is a serious decision, and when done improperly, it can lead to wrongful termination claims that cost employers thousands or even millions in legal fees, settlements, and reputational damage. For employees, these mistakes often result in lost income, emotional distress, and a prolonged legal battle.
In this article, we’ll break down the most common mistakes employers make that lead to wrongful termination claims, how to avoid them, and what employees can do if they suspect their rights have been violated.
What Is Wrongful Termination?
Wrongful termination occurs when an employee is fired in violation of state or federal law, public policy, or an employment contract. While California is an “at-will” employment state, meaning employers can terminate workers for almost any reason, there are important legal exceptions.
Employers cannot fire someone for:
- Discriminatory reasons
- Retaliation (for filing complaints or exercising legal rights)
- Taking legally protected leave
- Refusing to break the law
- Whistleblowing
Mistake #1: Firing for Discriminatory Reasons
Discrimination is one of the top causes of wrongful termination lawsuits. Federal and state laws prohibit firing employees based on:
- Race, color, or national origin
- Gender or sexual orientation
- Pregnancy
- Disability
- Age (40+)
- Religion
Example: An employee is terminated after returning from maternity leave. If performance was not an issue, this could be a clear case of pregnancy discrimination.
Mistake #2: Retaliating Against Employees for Protected Activities
Employees have the right to report workplace violations, file complaints, or request accommodations without fear of retaliation. Terminating an employee for engaging in these activities is illegal.
Protected activities include:
- Reporting harassment or discrimination
- Filing wage and hour complaints
- Taking medical leave
- Acting as a whistleblower
Example: A worker reports unsafe conditions, then gets fired for “poor attitude” a week later. This timing could strongly suggest retaliation.
Mistake #3: Ignoring Protected Leave Laws
California and federal law protect employees who take time off for medical issues, family care, or other reasons:
- FMLA / CFRA – Up to 12 weeks of unpaid, job-protected leave
- Paid Sick Leave
- Pregnancy Disability Leave
Firing someone for exercising these rights is a common mistake that leads to lawsuits.
Mistake #4: Failing to Document Performance Issues
Employers often terminate workers citing “poor performance” but fail to provide written warnings, reviews, or evidence. Without documentation, employees can claim the termination was illegal.
Tip for Employers: Keep accurate, detailed records for every disciplinary action.
Mistake #5: Breaching Employment Contracts or Company Policies
Even in at-will states, contracts and employee handbooks often outline termination procedures. Firing someone without following these steps can create legal risk.
Mistake #6: Inconsistent Enforcement of Policies
Applying rules differently to different employees is a major red flag. If two employees violate the same policy, but only one gets fired, especially if that person belongs to a protected class, discrimination claims are likely.
Mistake #7: Forcing a Resignation (Constructive Discharge)
Employers sometimes make working conditions intolerable so employees quit. This is called constructive discharge, and it’s treated like a wrongful termination under the law.
Mistake #8: Mishandling Final Pay and Benefits
California law requires immediate payment of all earned wages and unused PTO at termination. Failing to comply can result in penalties on top of wrongful termination damages.
Consequences for Employers
- Expensive lawsuits and settlements
- Damage to brand reputation
- Payment of back wages and punitive damages
- Attorney’s fees
What Employees Should Do
- Document everything: emails, texts, and meeting notes
- Request your personnel file
- Do not sign agreements without legal advice
- Contact an employment lawyer immediately
Frequently Asked Questions About Wrongful Termination
Can my employer fire me for any reason in California?
No. California is an at-will state, but firing someone for illegal reasons like discrimination or retaliation is prohibited.
What if I signed an “at-will” agreement?
Even with at-will agreements, employers cannot terminate you for discriminatory or retaliatory reasons.
How long do I have to file a claim?
Most wrongful termination claims in California must be filed within 2 years, but some require action within months. Act quickly.
What damages can I recover in a wrongful termination lawsuit?
Lost wages, emotional distress damages, attorney’s fees, and sometimes punitive damages.
Can I sue if I quit because of harassment?
Yes. If your working conditions were unbearable and you had no choice but to resign, you may have a claim for constructive discharge.
Quick Legal Terms Explained
- Wrongful Termination: Illegal firing in violation of laws or contracts.
- Retaliation: Punishing an employee for exercising legal rights.
- Protected Leave: Time off legally guaranteed by law (FMLA, CFRA).
- Constructive Discharge: When an employee is forced to quit due to intolerable conditions.
- Damages: Compensation awarded for losses and suffering.
Quick Tip
Never sign a severance or release agreement without reviewing it with an attorney. These documents often include waivers of your legal rights.
Final Thoughts
Wrongful termination claims are increasing, often due to avoidable errors. Whether you’re an employer looking to protect your business or an employee standing up for your rights, understanding the law is essential.
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If you believe you were wrongfully terminated due to discrimination, retaliation, or exercising your legal rights, Estrada Law Group can help.
We fight for employees across Los Angeles and we don’t charge unless we win.
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