What Texas Employers & Employees Must Know About Wrongful Termination
Texas is an “at-will” state which means that employers can terminate an employee’s position for nearly any reason. However, there are circumstances under which Texas law allows workers to challenge a discharge or termination from a job.
If you’re dealing with a wrongful termination dispute – whether you’re an employee or an employer – you should know that these types of claims can be valid under Texas law.
At Lindquist Wood Edwards, we represent both employers and employees in matters involving wrongful termination claims in Texas.
If you’re faced with a wrongful termination dispute, we suggest that you speak with a qualified employment law attorney from our firm. During the consultation we’ll discuss the specifics of your case work towards establishing an effective path forward.
If you’re not ready to speak with an attorney, keep reading to gain a basic understanding of the Texas laws that govern wrongful termination cases.
Do You Have a Valid Texas Wrongful Termination Case?
A valid wrongful termination lawsuit must also be based on an established cause of action, which is a series of legal elements that are used to justify the award of compensation. Cause of actions contain certain elements which an employee must be able to establish to form a valid legal claim.
1. Wrongful Termination Based on Breach of Contract
In the state of Texas, a large number of employees work at-will, which means that these employees can be fired at any time for any reason so long as there is not a law prohibiting this termination. Employees who have an employment contract that limits the employer’s right to fire the employee, however, are not considered at-will employees.
If an employee is fired for any reason prohibited by a contract, the employee may have a breach of contract claim. In order to establish a breach of contract claim, an one must prove several elements:
- An employment contract existed. Individuals must prove that an employment contract existed that limited the employer’s right to fire the individuals. Many employment contracts, however, are written for at-will employment, which merely enforces the fact that employers have the right to terminate an employee for any reason at any time. Not only must employees prove that an employment contract existed, employees must demonstrate that an employment contract modified the terms of at-will employment.
- The employee satisfied their duties under the employment contract. An employee must show that they satisfied their obligations under the terms of the applicable employment contract.
- The employee was fired due to circumstances that breached the terms of the employment contract. For example, if an employee contract stated that an individual would not be terminated until a certain event occurred but the employee was in fact terminated before this event, a direct breach of the employment will likely be considered to have occurred.
- Damages were caused due to the breach of the employment contract. Employees must show that they suffered some type of harm due to the termination. This type of harm is often economic in nature. If an employer breaches an employment contract, courts are reluctant to order one party to do what it said it would do. Courts are more likely to make an employer pay an employee financial compensation that the employe directly lost as a result of the breach.
2. Wrongful Termination Based on Discrimination
All employees in the state of Texas may not be fired for discriminatory reasons. Federal and Texas state law prohibits employers from firing companies on the basis of age, citizenship status, color, disability, genetic information, national origin, pregnancy, race, religion, or sex. To prove that wrongful termination occurred due to discrimination, individuals must demonstrate the following elements:
- Protected class. The employee must have been a member of a protected class. The employment relationship is considered a protected relationship. Both state and federal law prohibit discrimination in the employment context.
- Qualified employee. The employee must have been qualified for the position. This element is often not a problem for existing employees. This element, however, can be challenging in discrimination cases that involve job applications and denials of promotions. Occasionally,, this element can also present an obstacle for existing employees when qualifications for a position have changed.
- The employee was terminated from their position. More than likely, this termination was based upon the employee’s protected class status. There are various ways that employees can demonstrate this discriminatory motive including statements, statistics, or even company policies that were biased against the protected class. Employees cannot claim wrongful termination if the employee quit the position before being terminated. In some situations, however, an employer might force an employee to resign which can constitute a “constructive discharge” which will be viewed as a resignation by a court of law.
- Influential factors. Courts weigh a variety of factors in determining whether wrongful termination occurred due to discrimination. Some of these factors include: whether the employee was given a reason for termination, if an employer’s discrimination is well-documented, whether a legitimate non-discriminatory reason was given for the employee’s termination, and if the employee worked to minimize the extent of any financial harm.
- Not terminated. Another employee who is not from the same protected class was not terminated.
3. Wrongful Termination Based on Retaliation
Retaliation occurs when an employer wrongfully terminates an employee for exercising a legal right. Some of the legal rights that have resulted in retaliatory actions include: filing a discrimination or harassment complaint, requesting or exercising a right under the Family Medical Leave Act, complaining about workplace safety, filing a workers’ compensation claim, blowing the whistle on unlawful conduct, and engaging in union organizing activities.
To win a retaliation case, a party must successfully establish the following elements:
- Protected activity. The individual must have engaged in a protected legal activity or exercised a protected right. One example of a protected activity occurs when an employee refuses to comply with an employer’s request to participate in an employer’s discriminatory activity. Another example occurs when an employee participate in an investigation regarding an employer’s illegal conduct.
- Fired due to protected activity. The employee must have been fired due to the protected activity. In many cases, timing is important in arguing that termination occurred due to the exercise of a legal right. Demonstrating the connection between a protected activity and a termination can be established through either “direct” or “circumstantial” evidence. Direct evidence includes written or verbal statements, while circumstantial evidence is based off of inference that a termination was due to an employee exercising a legal right or participating in a protected activity. Employers often respond to retaliation claims by arguing that a valid reason existed for the employee’s termination.
- Damages occurred. The employee who experienced a wrongful termination must have damages as a result. These damages are often financial in nature.
4. Wrongful Termination Based on Harassment
Harassment by an employer can include many types of behavior including: exclusion from key meetings and information, applying double standards to employees, adding or removing an employee’s workload, withdrawing support from an employee, increasing criticism of an employee, setting impossible performance expectations, or spreading defamatory comments about an employee.
If an employer is aware of harassment occurring but takes no actions to remedy this behavior, an employee treating can be viewed as “constructive termination”, which means the equivalent of wrongful termination even though an employee has quit their position.
5. Wrongful Termination Based on Refusal to Perform a Criminal Act
Law in the state of Texas prohibits employers from firing employees in situations where the employer has requested that the employee commit an illegal act and the employee refuses. This law does not apply to situations where an employer suggests that an employee perform a criminal act or demands that an employee perform the criminal act but does not fire the employee.
Instead, an employer must give an employee the option to either commit the criminal act or lose the individual’s job. In addition to protecting an individual’s employment, this law also permits employees to contact law enforcement or the applicable regulatory agency to determine whether the individual is permitted to perform to the requested act. This law arises from a 1985 decision by the Texas Supreme Court that gave an action wrongful termination by an employee who had refused to perform an illegal act.
The rationale behind this regulation is that when an employer asks an employee to performing an illegal act, the employer is placing the employee in the position of having to risk being fired or face criminal penalties. In one example, a Texas court held that a car salesman fired for refusing to misrepresent the trade-in value of a vehicle.
6. Wrongful Termination Based on Violation of Civil Rights Statutes
A variety of federal and Texas law protect employees from wrongful termination due to violations of the employee’s protected rights. Employers in the state of Texas are prohibited from terminating employment on the basis of discrimination on the basis of age, disability, ethnicity, genetic information, immigration status, national origin, race, religion, sex, or as retaliation against employees who report discrimination internally or externally in a corporation.
Employers are also prohibited from terminating an employee who has the right to take time off of work for one of several reasons which include the following.
- Jury Duty. The state of Texas grants employees the right to unpaid leave for jury service. Employers who terminate employees for jury duty can face wrongful termination suits.
- Family and Medical Leave. Employees in the state of Texas are protected by the Family Medical Leave Act which requires employers with fifty or more employees to provide eligible employees with up to twelve weeks off, unpaid, every year for a serious health condition or to care for a family member with a serious health condition.
- Military Leave. Federal law grants employees the right to take up to five years off to serves in the armed forces with the right to resume the position when the individual returns to work. Federal law also prohibits discrimination against employees who have served in the military and protects employees from termination without good cause for up to one year after the employee returns from military duty.
- Voting Leave. In the state of Texas, employers must grant employees paid time off to vote unless the employee has two consecutive hours off work while polls are open.
Wrongful Termination Settlements in Texas
The value of a wrongful termination claim depends upon a variety of factors which can vary greatly between cases. Below we’ll look at what to expect from the wrongful termination settlement process.
Strategies Commonly Used by Plaintiff Attorneys in Wrongful Termination Cases
After an initial meeting, an employment attorney will assess evidence all evidence in an employee’s case and calculate approximate losses. Based upon the applicable laws violated by an employer, the strength of evidence, and the amount of losses incurred due to a wrongful termination, there are several different strategies that might be used by an attorney.
- Demand letter. These letters are sent to an employer describing laws violated by the employer and the losses that were suffered. Demand letters are most frequently used to determine whether an employer is interested in negotiating rather than pursuing matters in a court of law. These letters let individuals resolve wrongful termination disputes quickly without having to spend the significant time and resources that many lawsuits require.
- Filing an Agency Claims. In many situations, legal counsel must first file a complaint with the appropriate state or federal agency. Sometimes, only if the agency denies the claim can an attorney file a lawsuit.
- Litigation is a complicated process including several steps from filing an initial complaint to the trial itself. The discovery process is particularly complicated. An attorney will gather statements from the former employer, attempt to gather relevant documents from the employer, gather statements from the employee in addition to key witnesses.
- Settlements can happen at any stage in the litigation process and can only be reached by agreement of all involved parties. Settlements are used in a large number of cases and often take place after a wrongful termination lawsuit has been initiated. For wrongfully terminated employees, one of the main obstacles is showing convincingly that the employee was terminated for an unlawful reason including either due to discrimination, retaliation, or the violation of an employment or union contract. Employers frequently respond to these cases with valid reasons for firing an employee including poor performance. As a result of these difficulties, employees often find it easier to reach a settlement. Even if an employer prevails in a case, wrongful terminations cases can reveal potentially damaging information about a company that can significantly weaken a company’s reputation.
Factors Analyzed by Courts
Courts in wrongful termination cases analyze several types of factors which include the following:
- Lost benefits. If a wrongfully terminated employee is forced to purchase their own health insurance in order to cover medical expenses, an employer can be held liable for compensation for these types of expenses. If an employee experienced a serious illness or visited the hospital for an emergency or procedure and incurred substantial out of pocket expenses, the amount of lost benefits can prove to be quite substantial in nature. This factor can also include fringe benefits including the loss of stock options.
- Lost wages. These types of damages are often easy to calculate. This category includes the amount that employees lost from the date of termination forwards. Some financial sources including income from another job, unemployment benefits, and other sources are deducted from the total amount of lost wages. Future wage loss is sometimes calculated when an employee has been unable to find adequate replacement work after the wrongful termination.
Types of Damages that Can Be Received
There are several types of damages that individual can expect to receive due to a wrongful termination case. In many cases, there are limitations regarding the type of damages to which an individual is entitled and how much the individual could potentially receive.
Some of the various types of damages that individuals can receive in these situations include:
- Compensatory damages. These damages are designed to reimburse employees for out-of-pocket expenses due to discrimination that occurred in the workplace. This compensation frequently includes medical expenses, costs associated with job searches, and emotional harm including loss of enjoyment of life.
- Economic damages. The primary component of many wrongful termination cases are economic damages which can include the repayment of lost wages, which are divided into back and front pay. Back pay refers to the amount of wages that are lost due to being terminated from the date that the employee was terminated until the time of the resulting trial. Front pay is compensation for lost wages during the time between the judgment obtained in court and an employee’s reinstatement into the position from which the employee was wrongfully terminated.
- Emotional damages. Courts frequently have a difficult time deciding upon an amount for emotional damages. This category includes any emotional suffering like depression or stress that an employee experienced due to a wrongful termination.
- Punitive Damages. These damages are designed to punish an employer for malicious or reckless discriminatory actions. There are a small and limited type of situations in which a court will decide to award punitive damages.
Current Statistics Regarding Wrongful Termination Cases
The Equal Employment Opportunity Commision reports that 88,778 discrimination charges were filed in the year of 2014. Monetary relief from cases that were litigated total $22.5 million over this period. Some other important statistics include: 67 percent of employment cases result in favorable judgments for the employee.
Note: The content here is for informational purposes only. It should not be taken as legal advice. This information should not be taken as the formation of a lawyer or attorney client relationship.