Wrongful Termination Lawsuit: When Being Fired Is Actually Illegal
In almost every state your employer can fire you for a bad reason, an unfair reason, or no reason at all. A wrongful termination claim needs an illegal reason — and the deadline for the most common route is as short as 180 days.
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Reviewed by Leonard Goldberg, Editor · Last updated
At-Will Employment, and the Exceptions That Matter
At-will employment is the default in 49 states (Montana is the exception), and it means either side can end the relationship at any time for almost any reason. “Unfair” is not the test. The exceptions are what create claims: discrimination because of race, colour, religion, sex including pregnancy and sexual orientation, national origin, age at 40 or over, disability, or genetic information; retaliation for protected activity such as reporting discrimination, filing a workers' compensation claim, taking FMLA leave, or reporting safety or legal violations; breach of contract, express or implied, including collective bargaining agreements; and public policy violations, such as firing someone for jury service or for refusing to break the law. Retaliation is worth singling out: it is actionable even when the underlying complaint turns out to be unfounded, provided the employee raised it in good faith.
Case Details
For discrimination and retaliation claims, you generally cannot go straight to court. You must first file a charge with the Equal Employment Opportunity Commission or the equivalent state agency, and the deadline is short: 180 days from the discriminatory act, extended to 300 days in states with their own fair employment agency. The EEOC then investigates, may attempt conciliation, and ultimately issues a right-to-sue letter — after which you have 90 days to file suit. Missing the initial 180 or 300 days generally ends the claim regardless of its merit, and this is the single most common way valid wrongful termination cases die.
What These Cases Actually Pay
Payouts by Type of Claim
The same EEOC data broken down by the basis of the claim, with the median as the honest centre:
Age (ADEA) — 164 resolutions, median $185,000, mean $2.5 million. The highest median of any category and by far the most skewed, reflecting senior, well-paid employees and large group cases.
Race / National Origin — 382 resolutions, median $200,000.
Sex / Gender / Pregnancy — 749 resolutions, the largest category, median $125,000.
Retaliation — 463 resolutions, median $100,000.
Disability (ADA) — 650 resolutions, median $80,000.
Religion — 121 resolutions, median $65,000.
Two cautions. These are EEOC-involved resolutions, which skew toward cases the agency considered strong enough to pursue — an ordinary private settlement is typically smaller. And a settlement figure is not what reaches the employee: attorney fees, costs and tax come out of it.
What Damages Are Available
The Sequence, and the Clock
- 1
The termination
The clock starts here. Preserve everything now — emails, performance reviews, the reason given, and any inconsistency between the stated reason and what you were told before.
- 2
File with the EEOC within 180 or 300 days
180 days from the discriminatory act, or 300 in states with their own fair employment agency. This is the deadline that ends most valid claims, and it cannot be extended by negotiating with the employer.
- 3
Investigation and mediation
The EEOC may investigate, request information from the employer, and offer mediation. Many cases resolve here without litigation.
- 4
Right-to-sue letter
Whether or not the EEOC finds cause, it eventually issues a right-to-sue letter. From that date you have 90 days to file — a hard deadline, and a short one.
- 5
Litigation
Discovery, depositions, and usually a summary judgment motion. Employers win a substantial share of employment cases at summary judgment, which is why most that survive it settle.
- 6
Settlement or trial
The overwhelming majority settle. The 55 jury verdicts in our EEOC data, median $850,000, are the small tail of cases that did not — and they are why employers settle the strong ones.
What Weakens a Claim
Four things that reduce or destroy otherwise viable cases:
Missing the EEOC deadline
180 or 300 days, depending on your state. It runs from the discriminatory act, not from when you finished trying to resolve things internally, and it is the most common reason good claims fail.
Signing a severance agreement without reading the release
Severance is normally offered in exchange for waiving claims. Workers over 40 have specific rights under the OWBPA, including time to consider and a revocation period. Once signed and the revocation window closes, the claim is generally gone.
Not documenting the job search
Back pay is reduced by what you earned or reasonably could have earned. An undocumented search hands the employer an argument that reduces the largest component of the claim.
Questions People Actually Ask
What counts as wrongful termination?
Being fired for an illegal reason: discrimination based on a protected characteristic, retaliation for protected activity, breach of an employment contract, or a reason that violates public policy. Being fired unfairly, harshly or without warning is generally lawful under at-will employment.
How much is a wrongful termination case worth?
Across 2,386 EEOC resolutions the median is $110,000 and the mean is $817,329 — the gap shows how much a few very large outcomes distort the average. A quarter resolve at or below $50,000; the top 10% exceed $1.3 million. Your own range depends on your earnings, how long you were out of work, the strength of the evidence and the type of claim.
How long do I have to file?
For discrimination or retaliation, a charge must be filed with the EEOC within 180 days of the act, extended to 300 days in states with their own fair employment agency. After the right-to-sue letter you have 90 days to file suit. Contract and public policy claims follow state deadlines, which differ.
Which claims pay the most?
By median in the EEOC data: age discrimination ($185,000) and race or national origin ($200,000) lead, followed by sex, gender and pregnancy ($125,000), retaliation ($100,000), disability ($80,000) and religion ($65,000). Age cases have by far the widest spread between median and mean.
Do I need a lawyer?
You can file an EEOC charge yourself, and many people do. Representation matters more at the litigation stage, where employers are always represented and summary judgment ends a substantial share of cases. Employment lawyers commonly work on contingency for cases they take.
I signed a severance agreement. Is it over?
Usually, though not always. Releases are enforceable but not unlimited — they cannot bar filing an EEOC charge, and workers over 40 have specific protections under the OWBPA including a consideration period and a seven-day revocation window. A release signed under misrepresentation may also be challengeable.
Is my settlement taxable?
Generally yes. Unlike compensation for physical injury, employment settlements are largely taxable — lost wages as wages, with emotional distress damages taxable when not tied to physical injury. How the agreement allocates the amount between categories affects what you keep, which is worth attention before signing.
Separate from this case: were you injured in the last 2 years?
Class-action payouts are fixed amounts through an administrator. A personal injury claim is a different case — and often worth far more. Free estimate, no obligation.