Whether or not you can successfully sue your employer for wrongful discharge or wrongful termination largely depends on two things: (1) your employment status (at-will, independent contractor, etc.), and (2) the employer's intent or motivation for terminating your employment.
1. The Employee's Employment Status
The classic wrongful discharge claim that asserts an unjust or unfair termination is based on an employment contract.
Some employees have written contracts that specify that employment will continue for an agreed-upon term or duration. A rule in contract law known as the statute of frauds requires that, to be enforceable, a contract for employment for a term of one year or more (i.e., an employment contract for a definite term of years) must be in writing. A wrongful discharge lawsuit that claims an oral or nonwritten employment contract for a term of one year or more will likely be dismissed by a judge, without a trial.
If the employee has a written contract for a definite term of years, and the contract does not otherwise address the circumstances under which the employment can be terminated before that defined term expires, the law in Michigan (and almost every state) provides that the employer must have just cause to terminate before the defined term expires. If the employer terminates the employee without just cause, a breach of contract occurs and the employer is liable to the employee for damages. The damages the employer is liable to pay would include the balance of compensation and other economic benefits due to the employee through the end of the contract's term.
Some employees have employment contracts that do not specify a term of years, but, instead, address the timing and circumstances under which their employment may be terminated. Under the statute of frauds, if the term of employment is capable of being completed in less than one year, the employment contract need not be in writing.
An employment contract that requires "just cause" for termination is capable of being completed in less than one year. However, to be enforceable, an alleged "just cause termination, only" employment contract must be supported by objective evidence (i.e., written evidence or third-party verification), and the alleged contract must clearly and unequivocally promise "termination for just cause, only."
In Michigan (and in many other states) an employer's written policy statements (such as those contained in a personnel policies employee handbook) can create an enforceable "just cause termination, only" employment contract. However, the policy must clearly and unequivocally promise or assure "termination for just cause, only."
If the employee has an indefinite-term "just cause termination, only" employment contract, and the employer terminates the employee without just cause—at any time during the employment relationship—a breach of contract occurs and the employer is liable to the employee for contract damages. The damages the employer is liable to pay would include the compensation and other economic benefits the employee would likely have earned, but for the termination.
In Michigan (and in most states), when employment is for an indefinite term or duration, the employment relationship can be terminated by the employer or the employee, at any time, at their will. "At-will" employment means that the employment relationship can be terminated at any time, for any or no reason, with or without a just cause.
If an employee does not have a written "term of years" employment contract, and/or does not have objective evidence of a promise of "termination for just cause, only," the employer can terminate the employee for any reason, fair or unfair, with no liability to the employee for an unfair or unjust discharge.
When an employee is employed for an indefinite term, the law in Michigan (and most other states) presumes an "at-will" employment relationship. The employee automatically is presumed to be employed on an "at-will" basis.
An employer is not required to have its employees sign off on some sort of statement or disclaimer acknowledging an "at-will” employment relationship. Rather, it is the employee's burden to produce evidence that the employer created or agreed to something other than an "at-will" employment relationship.
Employers typically prefer to have "at-will" employment relationships with their employees.
If a lawyer tells you that "at-will" employment does not hold up in court, start looking for another lawyer.
The United States Department of Labor Bureau of Labor Statistics reported that currently 12.5% of all employees in the United States were covered by collective bargaining agreements negotiated by labor unions.
Collective bargaining agreements usually contain "just cause termination, only" and "termination only after progressive discipline" provisions. These contract terms provide "job security."
Collective bargaining agreements usually contain grievance and arbitration provisions. The typical collective bargaining agreement provides that the grievance and arbitration provision is the employee's exclusive remedy for challenging an unfair or unjust discharge.
Employees covered by collective bargaining agreements usually cannot file a wrongful discharge lawsuit in court. Typically, when a union-represented employee files an "unfair discharge" wrongful discharge lawsuit in court, the employer's lawyer can easily get the case dismissed on the basis that the grievance and arbitration provision of the collective bargaining agreement is the only procedure under which the employee can pursue the claim.
Union-represented employees covered by collective bargaining agreements typically must pursue their wrongful discharge claims through their grievance and arbitration procedure, with their union representing them. Also, the time frame for filing a discharge grievance through the union is typically very short—usually a matter of several days.
2. The Employer's Intent or Motivation
"Just Cause" Employees:
If the employee has a "just cause termination, only" employment contract, the employee need only demonstrate that he or she fully performed the duties and responsibilities of his or her job. The burden is on the employer to prove that the employee did not perform, or engaged in some specific conduct or misconduct that justified discharge.
Because an "at-will" employee can be terminated for any reason, with or without a just cause, the only way an "at-will" employee can successfully challenge a discharge as being "wrongful" is if he or she can prove that the employer's intent or motivation for the discharge was illegal discrimination or retaliation.
An employer's intent or motivation is illegal discrimination if it is based on the employee's age, race, sex, national origin, religious beliefs, height, weight, arrest record, marital status, veteran status, qualifying disability, or other characteristic specifically protected from discrimination by federal or state law.
An employer's intent or motivation is illegal retaliation if it is based on the employee's participation in protected activity, such as reporting a violation of law to a public body (also known as "whistleblower retaliation"); exercising rights under the Workers' Compensation Act, including filing a claim for workers' compensation benefits; making a complaint of illegal workplace discrimination or harassment, or participating in an investigation or hearing related to such a complaint; exercising a right belonging to the employee under the law or fulfilling a legal obligation (such as appearing in court for jury duty, or as directed by a subpoena or court order, or providing truthful testimony under oath).