It happens every day—often without warning. An employee is summoned to the boss’s office and given the harsh news that they’ve been terminated. Often, employees aren’t even given the obligatory two-week notice.
“It’s an everyday occurrence in the dot-com world,” says Amy Fried, an executive recruiter specializing in new media at New York City search firm Roz Goldfarb Associates. “Virtually every one of my friends who has worked at a dot com has been fired. In fact, none of them expected to hold a job for more than a year or two.”
Most of the dot-com casualties quickly packed their things and moved on to new jobs, never thinking that perhaps they should have pursued an unlawful termination lawsuit. But even if you don’t win, it’s foolish not to at least look into whether you’ve got a case.
“Wrongful termination suits are up about 50 percent because of the exceptions to the ‘At Will’ employment doctrine,” according to Paul Lefkowitz, a principal at employment law and labor relations firm Climaco, Lefkowitz, Peca, Wilcox, Garofoli in Cleveland, OH. “A reporter called ‘wrongful termination’ the most exciting phrase in a lawyer’s vocabulary since whiplash."
The causes of unlawful termination constitute a minefield of legalese, laws, statutes, and interpretation. (And this does not even include discrimination lawsuits based on race, sex, religion, and national origin, which I’ll cover in a future column.) To begin this discussion, we’ll first identify the two broad classifications of full-time employees—at-will and contract employees.
The majority of employees are classified as “at-will,” meaning that the employer or employee may terminate the employment relationship with or without cause or notice. The open-endedness of this agreement has led many employees to think that there would be no basis for a lawsuit in the event they were terminated.
Lefkowitz said that in the recent past, it was true that at-will employees terminated without a written contract had little chance of bringing a successful suit. But that’s changed with the rise of wrongful termination litigation. “Now there are a number of exceptions [to an at-will agreement], such as leaving a job to take a new one in another city only to be fired months after taking the job, having unique skills but being unable to get a new job [after being terminated], violating public policy, whistle-blowing, breaching good faith, or failing to pay value of unvested stock options.” Any of these exceptions can be cause to bring suit against an employer for wrongful termination, but as always, any exception is subject to interpretation by the courts.
Contracted employees have slightly different options. Because they hold contracts that spell out their salary and other specific provisions, they may be able to determine a clearer cause for a valid lawsuit against an employer if those terms are violated. That’s not to say, however, that a contract will protect the employee completely. Employment contracts are basically designed to protect the employer first and the employee second. For example, Lefkowitz explains, “One of the key provisions of a contract is a covenant not to compete. If the employee quits or is terminated, he or she cannot compete with the employer in a certain geographical area over a specific period of time.”
So what do you do if you think you have a wrongful termination case? Start by asking your local legal association for a list of labor attorneys to find one who specializes in bringing wrongful termination suits against employers. If you feel you may not be able to afford the hefty legal fees, try to find an attorney who will work on a contingency basis, meaning that he or she is paid at the time of settlement. Lefkowitz said that if he thinks he has a solid case, he’ll take it on a contingency basis and ask the client to pay only for his out-of-pocket expenses.
Also, consider the financial implications of filing suit. Even if you win, that $75,000 settlement may end up being considerably less by the time you cover all expenses involved in litigation—and you may not even see that money for three to five years, depending on how long it takes for your case to go to trial.
Lefkowitz advises that you avoid litigation, if possible, and instead consider the more expedient route of settling out of court. Between 75 percent and 80 percent of all cases are resolved outside of court, and Lefkowitz adds that a wrongful termination case “could conceivably be settled in 48 hours.”
Michael Lotito, a partner with employment-law firm Jackson Lewis in San Francisco, CA, advises at-will employees to avoid these situations in the future by asking employers to sign an employment contract. “It can include all the issues surrounding employment such as salary, termination terms, severance pay, or anything else deemed important,” he says. “Have an attorney look it over before asking the employer to sign it.”
Whether or not it will stand up in court is another issue, but having something in writing that defines your employment arrangement can only serve to protect your rights.