What is Wrongful Termination in New York?

New York State is an “at-will” employment jurisdiction. This means that, unless an exception applies, employers are free to terminate their employees for any reason or no reason at all. Despite this long-standing legal trend, there are several instances where getting fired is considered a “wrongful termination” – and is therefore actionable in court.

The most common exceptions to the general rule of “at-will” employment in New York include termination as a result of:

  • Breach of an executive employment contract that prohibits a termination without “cause”;
  • Corporate whistleblower complaints under the Sarbanes-Oxley Act (SOX), including reporting securities and bank fraud and other violations of SEC rules and regulations;
  • Whistleblower complaints under the Federal False Claims Act in reporting healthcare fraud, such as Medicare and Medicaid overbilling or billing for unlicensed healthcare providers;
  • Discrimination and retaliation based on race, religion, gender, age, disability, national origin, sexual orientation, and certain other individual characteristics;
  • Engaging in “protected concerted activity” under the National Labor Relations Act, which includes communications by non-managerial employees with co-workers about work hours, pay, benefits, or other terms and conditions of employment;
  • Complaints about the failure to pay wages, sales commissions, guaranteed bonuses or other promised compensation; or
  • Violation of a union contract that only permits termination under certain circumstances, such as lay-offs or because of misconduct.

Are Employers Required to Provide Written Notice of Termination?

New York State employers must provide a written notice of termination not later than five working days following the date of termination which provides the effective date of separation from the company and the exact date that any employee benefits will cease.

What Notice is Required with an Employment Agreement?

If there is a written employment contract, the notice to the employee must conform to the termination clauses within the employment contract, including, where applicable, providing notice of the reason for the termination and an opportunity for the executive to cure any alleged misconduct before termination can be effective.

How Can Termination of Employment Result in a Breach of an Employment Agreement?

Executives, senior officers, and other high-profile individuals often sign Employment Agreements providing the terms, conditions, and duration of employment, including how the executive and company can part ways and what process needs to be followed in the event that the executive’s employment is terminated, including following an accusation by the employer that the executive has engaged in misconduct and should be fired for “cause” (as defined in the employment agreement).

How are Employers Advantaged by a Termination for “Cause”?

For executives with an Employment Agreement, employers often unjustifiably accuse the executive of misconduct, such as a refusal to follow the directions of the board of directors or failing to meet certain benchmarks, as a means of avoiding a severance payment. In this situation, the employer’s allegations of the executive’s actions are mischaracterized, or downright untruthful, and may not qualify as “cause” under the agreement or applicable law. An allegation of misconduct by the executive can be highly advantageous because this usually prevents an employee from being eligible to receive a severance package. As a result, an attorney should review the circumstances surrounding the termination, as well as carefully scrutinize the terms of the Employment Agreement, the company’s Employee Handbook, and other pertinent corporate documents, to determine whether the termination was in violation of the executive’s rights. In the instance of a wrongful termination, the employer can be held liable for a severance payment and/or other applicable damages.

Questioning the Employer’s Justification for the Termination.

Unfortunately, because of the at-will status of most New York workers, a wrongful termination can be difficult to prove. Often, employers will construct a sham excuse for termination to circumvent statutory and common law, or skirt their contractual obligations for a defined term of employment. For example, it is not uncommon for employers to falsely justify an employee’s wrongful termination because of a supposed reorganization, downsizing or reduction in force (RIF).

Executives who have been fired should consult with an experienced attorney to determine whether there is any recourse for the termination, such as obtaining a severance payment or other monetary damages. For example, executives with a written Employment Agreement may have the right to pursue a breach of contract claim if their contract is terminated without being informed of the grounds—if required under the Employment Agreement—or the justification for the termination is different from the permitted grounds for termination under the contract. For example, Employment Agreements typically limit the grounds for termination without the necessity for making a severance payment to misconduct or other evidence of “cause.” In the event of a breach of the agreement, the employment contract itself may provide the remedies for a wrongful termination, such as a severance payment for a set duration.

Proving a Wrongful Termination Case in New York.

A terminated employee should consult with a skilled employment lawyer to determine whether the employer’s reason for the termination is false or a misrepresentation, and is rather an excuse to shield an unlawful termination. This may include a termination arising out of discriminatory animus on the part of the company or in retaliation for reporting or complaining about discrimination; retaliation for whistleblower activity such as reporting securities violations or Medicare fraud such as overbilling; or in retaliation for demanding unpaid compensation.

Documentation Proving Wrongful Termination or Unfair Dismissal.

It is critical to retain all documentation that proves that the termination is in contravention of the Employment Agreement, or results from discrimination or in retaliation for complaints of unlawful conduct such as whistleblower activity. The existence of witness statements, documents, emails, text messages, video and audio recordings, and pictures, that corroborate the employee’s version of the facts or expose the employer’s false justification for the termination, often enable a quick settlement so that the employer can avoid an embarrassing and public legal action.

What Damages Are Available for a Wrongful Termination?

A successful wrongful termination suit or settlement demand can provide a wrongly terminated executive with a severance payment or compensatory damages, including lost wages and benefits, compensation for emotional pain and suffering, and attorneys’ fees, as well as punitive damages in certain situations. Depending on the reason for the termination, employees who are wrongly terminated may also be entitled to reinstatement to their former position. However, in order to secure damages for lost wages, wrongfully terminated employees must mitigate their losses by actively seeking alternative employment (with such efforts to find new employment being carefully documented).

Legal Representation for Wrongful Termination.

The facts and circumstances surrounding an employee’s termination should be carefully reviewed by an experienced New York employment lawyer to determine whether legal action can be taken to obtain compensation, or even reinstatement if desired. Act now to preserve your wrongful termination claims by contacting White Plains, NY based attorney Claudia Pollak, Esq. She will be able to determine whether there is a viable justification for demanding a severance payment or other damages to vindicate an unlawful termination. Ms. Pollak has represented several senior officers and high-profile executives facing wrongful termination resulting from a breach of their employment contract and from whistleblower activity in exposing unlawful activity by their employer. Call Claudia Pollak, Esq. today at (914-529-9111) or contact her online for a free consultation.