wrongful termination in violation of public policy

Wrongful discharge in violation of public policy (WDVPP) refers to a situation in which an employee is fired for reasons that oppose public policy interests. Such interests included protecting the individual’s rights or the general well-being of the community. An action for wrongful termination (or discharge) in violation of public policy gives a terminated employee the right to action against their former employer for wrongful termination . Although employment relationships are generally at-will , and therefore, may be terminated by either party without cause, or justifiable reason, WDVPP serves as a narrow exception to the at-will principle. This exception exists when public policy interests outweigh the need to uphold the employment contract’s terms.

To make a claim for wrongful discharge in violation of public policy, a plaintiff (the terminated former employee) must show that:

  1. Clear public policy existed and was manifested in some form of government law/regulation (i.e. state or federal constitution, statute or administrative regulation, or in common law );
  2. Dismissing employees under such circumstances as the plaintiff's dismissal would jeopardize public policy;
  3. The plaintiff's dismissal was motivated by conduct related to public policy; and
  4. The employer lacked overriding legitimate business justification for the dismissal.

There are four common categories in which employees may generally assert a WDVPP claim after being terminated:

  • Exercising a statutory right;
  • Refusing to do commit illegal or unlawful acts;
    • For example, an employee is fired for refusing to commit fraud on behalf of their employer.
  • Fulfilling a public obligation;
    • For example, an employee is fired for missing work to vote in a national election.
  • Whistleblowing , or reporting illegal conduct;
    • For example, an employee is fired for reporting their employer for using hazardous materials in their production of household products.

States typically have their own requirements for successful WDVPP. For example, California case, Jie v. Liang Tai Knitwear Co. , established that terminating employees for reporting the company's practice of employing undocumented workers, is considered a violation of the Immigration Reform and Control Act (IRCA), and therefore, a wrongful termination in violation of public policy. This is because the IRCA was grounded in public policies of:

  • Protecting documented workers from employment discrimination, and
  • Protecting all documented workers from competition by undocumented workers whose willingness to accept lower wages would diminish the effectiveness of labor unions.

As a result, terminating the employees who report violations of the act would directly threaten the policy objectives of the act.

Because wrongful termination in violation of public policy is generally recognized under tort law, some state courts have permitted plaintiffs to recover for compensatory and punitive damages. However, some jurisdictions, like Arkansas , recognize this action to be exclusively grounded in contract law, and as a result, do not permit recovery of punitive damages.

[Last reviewed in January of 2025 by the Wex Definitions Team ]

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