Can You Be Fired for No Reason?

Whether you can be fired for no reason, when you did nothing wrong, depends on your employment status and specifically on whether you are an at-will employee. In most of the United States, employees are generally considered “at will” employees. At-will means that you or your employer can terminate your job on a moment's notice for any reason, whether good, bad, indifferent or for no reason at all. The law in most states presumes that an employee is at-will unless the employee can prove otherwise. This means that unless the termination violates federal or state law, company policies, or an implied contract, there is very little that an at-will employee can do to protest a termination without a reason.

For cause employment is just the opposite. In these cases, the employer cannot terminate the employee without cause, and to discharge the employee there must be a legitimate reason. For example, some companies have policies that require for-cause justifications for employee terminations. These policies are typically outlined in employee handbooks. Some employees may be protected from termination without just cause under the terms of a contract. Certain types of employees such as members of labor unions or government employees are protected as well. One state, Montana, prohibits at-will terminations if the employee successfully completes an initial probationary period of employment.

While the law in most states presumes that an employee has at will employment, there are several exceptions to the general rule that employees can be fired without cause. An at-will employee still has employment rights. If you believe you have been terminated unjustly, you should seek the advice of an employment lawyer to discuss the laws in your state.

An Employee with a Contract May Not Be Terminated without Cause

If an employee is under contract, the employer may not fire the employee without a reason, and the reasons that are acceptable under the law are limited by the contract. The first thing that an employee should do to determine if they are an at-will employee or whether they may be working according to a contract, if they aren't sure, is to review any contract that may have been signed at the time the employee was hired. If an employee signed an employment contract stating that the employee may not be terminated without just cause, this protects the employee from some terminations. For example, if an employee signs a one-year contract which states that the employee may not be fired unless they commit a crime, and the employee is later fired “for being lazy,” the employee may bring an action against the employer for breach of contract.

In most states, even when an employee takes an at-will position, an implied employment contract to terminate only for good cause might arise by oral assurances made by the employer. For example, if an employer says things to the employee like, “you'll have a job as long as your performance is satisfactory” or “we don’t terminate employees in this company without giving them a chance to correct their behavior,” this could mean an implied contract has been formed. An implied contract can also arise by the language in employee handbooks or other company policies of the employer. However, even when there is evidence of an implied contract, it is important to know that the at-will presumption is hard to overcome. Further, if an employer has made any other statements to the employee, which suggest that their employment is at-will, the employer may use this as evidence against the employee.

An Employee May Not Be Fired for a Reason that Violates Public Policy

If the reason an employee was terminated violates a state’s public interest, a court will deem the termination illegal, even if the employment was at-will. Some courts will apply this exception when an employer violates a provision of the state constitution, a code of ethics, an administrative code, or a broader notion such as the “good of the public.” For example, suppose an at-will employee is fired for refusing a drug test. Courts have sometimes found that certain types of drug tests are an unnecessary intrusion on the employee’s privacy, and therefore a termination based on a refusal to be tested in these situations is a violation of public policy.

Breach of an Implied Covenant of Good Faith and Fair Dealing

An employee may not be terminated if the termination violates common notions of fairness and good faith in transactions and dealings with others. Called a breach of an implied covenant of good faith and fair dealing, this happens when an employer terminates an employee on bad faith. For example, if an employee can show that an employer indicated that the employee would be treated fairly at their place of employment, and that based on this indication the employee’s termination was unreasonable, this is a breach of an implied covenant of good faith and fair dealing. Courts have found that this type of indication can be shown by employer affirmations such as continuous pay raises and excellent performance reviews.

Some states hold that every employment contract, express or implied, has a covenant of good faith and fair dealing inferred within its terms. This covenant is breached when either the employee or the employer keeps the other from benefiting from the terms of the contract. Courts can look at objective employer affirmations or they can find a breach simply based on broader notions of fairness.

Being Fired for No Reason Might Indicate Illegal Discrimination

Sometimes, when an employee is terminated without apparent cause, the employee may be able to show that the actual unstated reasons related to illegal discrimination. Both federal and state laws make it illegal for an employer to make certain employment decisions based on protected characteristics of an employee. These protected characteristics include gender, race, national origin, creed, age, sexual orientation, disability, religion, genetics, or military status. This means that an employer cannot discriminate based on these characteristics when making decisions about hiring, firing, demoting, promoting, training, recruiting, and other employment-related decisions. It is also illegal for an employer to create a hostile work environment based on these protected characteristics, or for an employer to refuse to take action when coworkers, other employees, or third parties create a hostile work environment. For example, suppose an employee is ridiculed by other employees about a protected disability. If the employee reports this to their employer, no action is taken, and the treatment is allowed to continue, this is an illegal hostile work environment. This means, the employee may take legal action against their employer.

However, it is important to know that an employer can discriminate based on personality, work ethic, experience, ability, resumes & references, and other unprotected characteristics. For example, while it would be illegal for an employer to decide to promote a male employee instead of a female employee because of her sex, it would not be illegal for the employer to make this decision if it were based on the level of experience each individual employee possessed.

Being Fired in Retaliation for Certain Actions Is Illegal

Federal and state law also protects an employee from being subjected to an adverse employment decision based on certain types of retaliation. This includes retaliation for refusing to commit an illegal act, for reporting an illegal act, or for exercising statutory rights, which are certain rights an employee has that are specifically provided for by state or federal law. For example, if an employee is terminated because they exercise statutory rights by making a workers' compensation claim, or because they take time off work pursuant to the Family Medical Leave Act, this would be illegal retaliation. If an employer terminates an employee after the employee reports the employer to local government for dumping waste in an illegal manner, this also would be illegal retaliation against the employee.

If you suspect that the real reason you've been fired is based on illegal discrimination or retaliation for complaining about illegal conduct, you should contact the nearest federal (EEOC) or state anti-discrimination agency. You may also contact an employment lawyer who can help you with your claim and assist you if you need to file a lawsuit against your employer.