Wrongful Termination Lawsuits and Settlements: What You Need to Know

Dayton Uttinger
Wrongful Termination Lawsuits and Settlements
Reading Time: 4 minutes

No one likes to lose their job, but wrongful termination cases extend beyond just hurt feelings. In these cases, employees are terminated due to illegal reasons. If you feel that your loss of employment had no legal basis, you might have a case for wrongful termination. However, these lawsuits are complex and lengthy, so you should know what your up against before you file.

What is Wrongful Termination?

Wrongful termination occurs when employees lose their jobs for unlawful reasons. Many states have at-will employment laws, which basically means that your employer can fire you for any reason. They do not have to justify their decision to any government agency. However, there are a few laws that explicitly protect employees from losing their jobs due to especially unfair circumstances.

When Can You Sue for Wrongful Termination?

The standard for wrongful termination is pretty high. Not just every unfair firing qualifies as a good reason to sue. Considering the cost of a lawsuit, you should try to understand if your case fits the prerequisites beforehand.


This is probably the most well-known type of wrongful termination case. If you were fired or lost your job because of your race, religion, gender, country of origin, age, pregnancy, or disability. These are part of federal employment laws, but your state might also prevent employers from firing based on sexual orientation, gender identity, or other qualities. You’ll have to check your state’s specific laws if it’s not covered in the federal statute.

Especially if you were harassed at work due to any of these qualities, you could certainly sue for wrongful termination.

Breach of Contract

If your employer violated your employment contract by firing you, you might have a case. Furthermore, it doesn’t have to be explicitly written, although it does help; in many cases, a verbal contract can be just as binding. Your employment contract should have a clause about termination. Read that carefully.

If your employer did not follow the termination policy that is outlined in your employment contract or handbook, then this can also be grounds for wrongful termination. All employees might be entitled to a verbal warning first, for example, and if you did not receive that then you might have a case.

Time Off

Specific types of time off are protected against ramifications from your employer. Those are:

Unfair Retaliation

If your employer fired you as retaliation for whistleblowing, filing for worker’s comp, refusing to do illegal acts, or declining unwanted sexual advances, then it counts as unlawful dismissal. If you’re not sure whether you case qualifies as unfair retaliation, consult your attorney.

Wrongful Termination Claims: What to Do

1. Keep documentation of everything.

Until you know for sure if you are going to proceed with your claim or not, it’s important to keep everything just in case. You never know what might end up essential to your case, and it’s always better to have it in writing.

Once you’ve calmed down, jot down your notes of how you were fired. You might send these impressions to your former supervisor or just make note of them. Don’t be rude or argumentative; you just want to have documentation of what took place.

2. Consult an attorney.

Ultimately, a lawyer is the only one who can tell you for sure if you should file a suit. Without knowing the specific situation and your history with your employer, it’s impossible to give a for-sure answer. Instead, get a trained professional’s opinion.

3. File Your Lawsuit

Your lawyer will probably do this for you, but prepared. This is a lengthy process, taking years to resolve. After you file, your former employer will probably respond with a settlement offer. This can happen at any point in the process, but filing shows how seriously you’re taking it.

Wrongful Termination Lawsuits

You have two options once you’ve filed. You can either settle or you can go to court. You might be required to try to mediate the situation before you make it to court, depending on your state, but if none of the settlements are good enough, then you can proceed to court. However, before making that decision, you should know the risk and reward of each choice.

Settlement Amounts: How Much Can I Expect?

The average out of court settlement for employee lawsuits is about $40,000, but the exact amount will depend on the severity of the case and your former employer’s wealth. Keep in mind, though, that you will likely have to pay your attorney out of that money.

Your legal fees will vary, depending on how expensive your attorney is and how he or she likes to be paid. Some prefer a percentage of your settlement money; others stick to an hourly fee. Also count in various court fees, and you’ll only be taking home a fraction of your settlement money.

How to Prove Wrongful Termination

You might get a bigger payout in court, but you also risk getting nothing at all. Proving wrongful termination isn’t as easy as sounds, especially if you are lacking any documentation of the events. This doesn’t mean it’s impossible, but your former employer will definitely have their own version of the story.

However, the right lawyer can help you overcome hurdles like that. No case is perfect, but a lawyer will know how to maneuver the law in your favor. Wrongful termination lawsuits can get messy fast, but if you’ve truly been the victim of a unlawful discharge, then filing might be the right decision.

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