Sarita Garg's Legal Blog

 At Smith & Garg, many clients will approach us with what they believe to be “wrongful termination” cases.  Unfortunately, 8 out of 10 people that we speak with do not have a case, at least under Texas Law.  It is important to understand what the term means, whether you are an employer or an employee.  Especially if you work or own a business in the State of Texas, you need to be aware about what rights and duties exist under Texas law with regard to termination of employment.  

I am sure you have heard it time and time again, but Texas is an “at-will employment state” and with regards to employees, this is a very tough standard. So what in god’s name does that mean?  Basically, at-will employment means that absent a contract or civil rights exception, the employer may fire the employee at any time, with or without cause. For instance, an employer can come into the office one morning and fire an employee because he or she does not like the color of the employee’s shirt. Additionally, the employer does not have to state why he/she is firing the employee.  This is completely legal in the State of Texas. For this reason, despite popular misconception, there is generally no claim or cause of action for wrongful termination or wrongful discharge. I have had several individuals call me and tell me that they just got fired, that they were not given any reasons for why, and that they felt that it was racially motivated.  When I proceed to ask questions, there is typically not any actual proof or solid evidence of racial discrimination, and unfortunately you can’t sue an employer on the grounds of a hunch or a feeling.

There are, however, a few exceptions to the general rule and these exceptions are very important. An employer’s right to terminate an at-will employee can be limited by contract, by public policy concerns, by federal and state civil right statutes, and by some tort theories.  Let us explore these a little further.

If an employee and an employer signed an employment contract, each party to the contract has the duty and obligation to adhere to the terms and conditions of that contract. Wrongful termination can occur if the employer terminates the employee in violation of the contract - oral or written. It is also important to note that an employee can also be sued for violation of an employment contract if he/she is in breach.

Employees of a publicly traded company who report fraudulent activity are protected from retaliation and cannot be terminated for reporting that activity.  This is called “Whistle-Blower Protection”.

An employer may not terminate an employee for refusing or failing to commit illegal or illicit acts. If an employee is terminated for the sole reason that he or she failed to commit a crime, he or she may have a cause of action for filing a wrongful termination lawsuit.

Certain civil right statutes prevent employers from terminating or taking adverse action against an employee for the following reasons:

• Discrimination – An employer may not discriminate on the basis of an employee’s race, color, national origin, religion or sex.
• Age – An employer may not terminate an employee on the basis of age if the employer has more than twenty employees.
• Disability — An employer cannot terminate employees who are otherwise qualified for a given job position based on disability.
• Health Related — An employer can be liable to an employee if he or she fails to allow unpaid leave for the birth or adoption of a child, or to care for a child spouse or parent suffering serious health condition.

Sometimes, issues can arise during the period of employment or after employment has terminated which can impose liability on a company or an employee. Defamation claims can arise in a variety of employment contexts including reviews, corporate communications, investigations of an employee’s conduct, and post-employment references. In Texas, to establish a claim for defamation an employee must show the following:
     (i) an employer made a false statement about him or her, which
     (ii) was published to a third party, and
     (iii) caused the plaintiff harm and the statement was made with malice.

Some common statements complained of involve dishonesty, fraud, sexual harassment, and illegal drug use.

The Family Medical Leave Act prohibits retaliation by the employer for an employee taking or requesting medical leave.

If an employee files for bankruptcy under the U.S. Bankruptcy Laws and is terminated by an employer because of the filing for bankruptcy, an action can be brought against an employer for wrongful termination.

The Fair Labor Standards Act (“FLSA”) was designed to protect workers from excessive hours and substandard wages. The FLSA entitles an employee to receive not less than one and one-half times regular rate for every hour of compensable time worked in excess of forty hours in any given workweek. Some employees, however, are exempt, such as executives, as well as certain service industries, such as domestic services.

If you are an employer or employee, violation of some of the standards and laws referenced above can have dire consequences both personally and professionally. It is important to consult with an attorney immediately if you believe that you have been wrongfully terminated or if your company has been sued or is about to be sued for wrongful termination. The attorneys at Smith & Garg, LLC are experienced attorneys who would be honored to represent you or your company’s interests in the event you need legal services.