Wrongful termination or wrongful discharge is a general reference to the illegal termination or firing of an employee. Because most employment is at will, for an indefinite term, and may be terminated at any time, wrongful termination or wrongful discharge claims are generally limited to circumstances under which (1) the employer violated an employee’s written employment agreement and terminated the employee for a reason other than good cause, or (2) the employer terminated or fired the employee for a discriminatory reason (age, race, color, sex, national origin, disability) in violation of federal or state law.

Most states follow the employment-at-will doctrine, and employment for an indefinite term may be terminated at will and without cause. Absent a specific contract term to the contrary, this doctrine allows an employee to quit or be terminated without liability on the part of the employer or the employee, with or without cause.

A discharged employee who asserts that the parties have contractually agreed to limit the employer’s right to terminate the employee at will has the burden of proving an express agreement or written representation to that effect. To rebut the presumption of employment at will, an employment contract must directly limit—in a meaningful and special way—the employer’s right to terminate the employee without cause.

In an employment-at-will situation, an employee policy handbook or manual does not, by itself, constitute a binding contract for the benefits and policies stated unless the manual uses language clearly indicating an intent to do so. In those cases holding that personnel manuals may create contractual rights, there is either language in the manuals expressing contractual intent, or the manuals were complemented by oral agreements making the policy provisions binding.

Thus, to prove a claim for wrongful discharge in breach of an employment agreement, a plaintiff must prove (1) the plaintiff had an enforceable employment agreement that directly limited—in a meaningful and special way—the employer’s right to terminate the employee without cause; (2) the plaintiff performed, tendered performance, or was excused from performing the contractual obligations; (3) the defendant breached the contract by wrongfully discharging the plaintiff from employment; and (4) the defendant’s breach of the employment contract caused the plaintiff damage.

The employment at will doctrine does not permit an employer to discriminate against an employee in violation of state or federal law, including Title VII of the Civil Rights Act of 1964 (42 U.S.C. §2000e); the Age Discrimination in Employment Act of 1967 (ADEA) (29 U.S.C. §621); and the Americans with Disabilities Act of 1990 (ADA) (42 U.S.C. §12101).

In Texas, the principle of 'employment at will' prevails, meaning that either the employer or employee can terminate employment at any time for any reason, except for illegal reasons. However, wrongful termination claims can arise if an employer violates a written employment agreement by terminating an employee without good cause or if the termination is based on discriminatory reasons, which is prohibited under federal laws such as Title VII of the Civil Rights Act, the Age Discrimination in Employment Act, and the Americans with Disabilities Act. To challenge a termination under a claim of breach of an employment agreement, the employee must demonstrate the existence of an enforceable contract that specifically limits the employer's right to terminate without cause, fulfillment of their own contractual obligations, a breach of contract by the employer, and damages resulting from the breach. Employee handbooks or manuals may create contractual rights if they contain language that clearly indicates an intent to do so. Despite the at-will employment doctrine, employers are not allowed to discriminate against employees based on protected characteristics such as age, race, color, sex, national origin, or disability.