Wrongful discharge is wrong.

Here’s what we cover:

Wrongful discharge means that an employee’s discharge vio­lates the terms of his employment agreement or is against pub­lic policy. If an employee is wrongfully discharged, he is entitled to recover damages against his former employer, either for breach of contract or for the public policy tort claim. This article analyzes both types of wrongful discharge claims.

Breach of Employment Agreement

In Arizona, the law presumes that employment is “at will.” This means that an employer may discharge an employee for any reason or for no reason at all, but may not discharge an employee for an unlawful reason.

Every employment agreement contains a duty to act fairly and in good faith. This duty is implied by law and has the same force and effect as if it were set forth in writing. This duty requires that neither party do anything that prevents the other from receiving the benefits of the agreement. If the employer breaches the duty of good faith and fair dealing, the employee will be entitled to recover as damages those benefits of the agreement that were denied.

An employee, to establish a breach of an employment agreement, must prove:

  1. that there was an agreement between him and the employer that changed their “at will” relationship
  2. the specific terms of the agreement
  3. that the employer breached the agreement; and
  4. the damages suffered by him.

If the employer breaches an employment agreement, the employee will be entitled to an amount of money that reasonably and fairly compensates him for that breach. The damage award is designed to, as nearly as possible, put the employee in the same monetary position that he would have been in had the employer not breached the agreement. That amount will be the value of all sums that would have been due from the time of the breach through the end of the agreement, less any sums that reasonably could have been or, in fact, were earned from substitute employment before the end of the agreement.

A terminated employee has a duty to make reasonable efforts to reduce damages by trying to find substantially similar employment. He has no responsibility to accept employment that is not substantially similar to his prior employment, nor does he have a responsibility to accept employment that imposes an undue burden or hardship. If a terminated employee could have reduced damages but failed to do so, then his award will be reduced by the amount of damages that he could have rea­sonably avoided.

Illustration: A pastry chef is wrongfully terminated from his job at a four-star restaurant. He is then offered a job to make fancy desserts for a catering company, but declines the employment. He receives no other job offers. Because he refused to accept substantially similar employment, his award will be reduced by the amounts that he could have earned by working for the catering company before the end of the agree­ment with his former employer.

Public Policy Tort Claim

As mentioned above, an employer may not discharge an employee for a reason that violates public policy. If the employer does so, that employee has been wrongfully dis­charged and may bring a public policy tort claim against his former employer. An employer will have violated Arizona’s public policy by discharging an employee:

because of discrimination based on race, color, reli­gion, sex, age, disability or national origin, or

in retaliation for filing a complaint of discrimina­tion, or

in retaliation for refusing to engage in unlawful conduct, or

in retaliation for exercising a legal right, or

in retaliation for “whistleblowing” because he reported or attempted to report illegal or unsafe acts of the employer.

The law protects the act of reporting discrimination or whistleblowing, even if it is later determined that there was no discrimination or the conduct that he reported was not illegal or unsafe. The discharged employee must, however, show that he had a good faith belief that what was being reported consti­tuted discrimination or an illegal or unsafe practice.

If an employer discharges an employee in violation of Ari­zona’s public policy, the discharged employee will be entitled to money to compensate him for his lost earnings, mental anguish and emotional distress, physical injury, harm to his reputation, and lost insurance coverage for his medical bills.

Legal Tip

It may be necessary to file a charge with the Equal Employ­ment Opportunity Commission or the Arizona Civil Rights Division before filing a lawsuit against an employer for certain public policy tort claims.

The above article is an excerpt from Arizona Laws 101: A Handbook for Non-Lawyers, 2nd Edition (Fenestra Books, 2012), by Donald A. Loose, republished with the author’s permission. 

Disclaimer: Laws change constantly. Specific legal advice should be obtained regarding any legal matter. The information contained on this website does not constitute legal advice and no attorney-client relationship is created. 

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Don Loose Author
Lawyer | Loose Law Group | View My Profile

Donald A. Loose is an Arizona attorney, and the author of Arizona Laws 101: A Handbook for Non-Lawyers, and Estate Planning in Arizona: What You Need to Know.  Mr. Loose is a regular guest on radio shows featuring local newsmaker interviews. He may be contacted at don@looselawgroup.com.