What is the difference between wrongful termination damages and unemployment benefits?

When it comes to the termination of one’s employment, there are typically two issues to think about.  First, is the employee eligible for unemployment benefits?  Second, was the termination “wrongful” in the sense that the terminated employee can sue the employer for damages?  Although related, these are two distinct issues that must be separately analyzed.

Generally speaking, an employee who is terminated from employment is eligible for unemployment unless the person was terminated for employment misconduct.  Misconduct is defined to mean “any intentional, negligent, or indifferent conduct, on the job or off the job, that is a serious violation of the standards of behavior the employer has the right to reasonably expect of the employee.”  Naturally, there are exceptions to this definition, but policy violations will often rise to the level of misconduct.

Wrongful termination, in contrast, really means that the termination was “illegal” in that the law prohibited the termination for a particular reason.  One of the most common claims of wrongful termination is discrimination, typically on the basis of race, age, gender, or disability.  Employment must be terminated “because of” a protected reason.  If termination is illegal, the employee may sue for damages, including lost wages and emotional distress.

The difference between these two concepts can be illustrated by a common scenario where an employee is terminated for violating the employer’s attendance policy.  If this is true, the employee likely committed “misconduct” and, therefore, is not eligible for unemployment benefits.  She will also have a hard time showing that any termination was for an illegal reason.

If, however, the employer was “wrong” about the policy violation (perhaps the employee notified her supervisor of the absence), the termination still stands, but the employee is eligible for unemployment benefits because she did not commit “misconduct.”  Even if this is proven, however, that does not give the employee a “wrongful termination” lawsuit because the reason for termination was not based on a protected class or an illegal reason; it was just an incorrect reason.  For this scenario to generate a wrongful termination claim, the employee likely needs to show that the policy violation was a lie to cover up the true reason for termination: because the employee is too old, or requested an accommodation, or reported a violation of law, or is a certain race or gender, etc.

If you believe you were terminated in violation of law, schedule a free consultation with employment attorney Joseph A. Gangi right away!  There are strict time limitations for pursuing any claim, so you should speak to someone as soon as possible.  Mr. Gangi may be reached at 507-625-2525 or via email.