Wrongful termination is a terminated employee's claim that the firing breached an employment contract or some public law.
Where an employment contract requires termination only for cause, a terminated employee can sue for arbitrary discharge. Wrongful discharge claims usually arise, however, under the default rule of at-will employment, in which both labor and management can terminate the relationship at will. In some states, a terminated worker can sue for wrongful discharge under contract law if he can show an implied contract for permanent employment, combined with a termination that lacked proper cause. For example, some courts have held that a provision in an employee handbook providing that termination shall be for cause served to establish an implied contract, allowing a suit for wrongful termination. E.g., Nicosia v. Wakefern Food Corp., 643 A.2d 554 (N.J. 1994).
If basing the claim on a public law, the plaintiff must show unlawful action such as illegal discrimination or retribution for whistleblowing. In Adams v. George W. Cochran & Co., 597 A.2d 28 (D.C. App. 1991), for example, the D.C. Court of Appeals allowed a wrongful discharge claim to proceed when the employee had been fired for refusing to break the law.
Wrongful termination may also be called wrongful discharge, wrongful firing, wrongful dismissal, illegal discharge, illegal termination, and illegal dismissal.
See Abusive discharge (compare).