Under the employment-at-will doctrine, an employer can generally fire an employee for any reason or for no reason at all. However, employers cannot terminate employees for reasons that would violate federal, state, or local anti-discrimination laws.
An employer also cannot fire an employee for reasons that would violate public policy, including for retaliatory reasons. For example, an employer cannot fire an employee because that employee filed a discrimination complaint against the employer or reported a health and safety violation to OSHA. Another example: an employer can't fire an employee because that employee filed a workers' compensation claim. Workers' compensation laws and workers' compensation insurance exist to protect workers who are injured on the job. This public policy goal would be thwarted if employees were afraid to file claims because they might lose their jobs.
A number of federal laws prohibit employers from firing employees for discriminatory reasons:
Under Title VII, employers with at least 15 employees cannot discriminate on the basis of race, color, religion, sex, or national origin. An employer who terminates an employee even partially based on one of those factors is in violation of Title VII. One obvious example: you can't fire someone because they choose to wear a religious head covering.
The Equal Employment Opportunity Commission (EEOC), the federal agency that enforces Title VII, also interprets the law's ban on sex discrimination as covering discrimination based on sexual orientation and gender identity.
The Age Discrimination in Employment Act (ADEA) protects workers aged 40 and older from discrimination on the basis of age. The law applies to employers with 20 or more employees.
If you've fired an older worker and hired a younger replacement, you need to be able to provide a valid reason for the firing other than age, such as poor job performance. Otherwise, your decision to terminate looks like age discrimination.
The Pregnancy Discrimination Act (PDA) of 1978 is an amendment to Title VII of the Civil Rights Act. The PDA prohibits discrimination on the basis of pregnancy, childbirth, or related medical conditions, and it applies to all terms and conditions of employment, including hiring, firing, promotion, leave, and benefits. The law applies to employers with 15 or more employees.
The Americans with Disabilities Act (ADA) of 1990 prohibits employers from discriminating against qualified individuals with disabilities in any aspect of employment, including applications, testing, hiring, firing, job assignments, leave, and compensation. The ADA applies to employers with 15 or more employees.
Under the ADA, an individual has a disability if he or she has a physical or mental impairment that substantially limits one or more major life activities. An individual is also protected under the ADA if he or she has a history of such impairment or is regarded as having such impairment.
In addition to the prohibition against discrimination, the ADA imposes an affirmative duty on employers to assist qualified individuals with disabilities. The ADA requires employers to provide reasonable accommodation to individuals with disabilities to assist them in performing their duties. Generally, the duty to request an accommodation falls on the employee.
Some employers are tempted to fire (or refuse to hire) individuals who are subject to the ADA, fearing that a requested accommodation could be expensive or disruptive to the business. Such an action is not only illegal but based on false assumptions. The Job Accommodation Network has a wealth of information on free and low-cost accommodations that employers can use to help their disabled employees thrive.
In addition to the protections offered by federal law, employees in many states and municipalities benefit from additional laws that prohibit discrimination. For example, some states prohibit employers from discriminating against workers based on veteran status, use of medical marijuana, or receipt of public benefits.
It's crucial for employers to thoroughly document and maintain records of any employee problems. That way, you can prove that you had a non-discriminatory basis for terminating any employees. Fired employees often believe, rightly or wrongly, that they were singled out unfairly. If you can't provide a lawful basis for your personnel decisions, you risk serious legal jeopardy.
If you're concerned about the legal risk of terminating an employee, consult an experienced employment attorney before taking action.