Fire At-Will! …Only When Prepared to Face the Legal Consequences: Texas Employer Attorneys Say Beware

You have likely heard that Texas is an employment at-will state. This means that an employer may terminate an employee’s employment at any time, without notice. Furthermore, there is no requirement that the employer state a cause for the termination. It fundamentally means that, absent a contract, either an employer or employee may terminate the working relationship at any time, for any reason, or even for no reason at all. This longstanding rule implies a great deal of flexibility, allowing workers to leave jobs without notice and employers to dismiss staff without justifying their decision. This general rule makes it real easy for the employer who wishes to make a personnel change, right? Wrong!

For every rule there is an exception, and in the case of at-will employment, the exceptions have nearly swallowed the rule, making the decision to terminate an employee one of the more complex decisions that a business will consider.

Personnel decisions that are based (or appear to be based) on race, color, sex, religion, national origin, or age are often called into scrutiny by the disgruntled employee or job applicant. Similarly, the decision to terminate someone who has recently filed for workers’ compensation benefits or benefits under the Family Medical Leave Act can lead to claims of retaliation.

So, although Texas does technically allow termination without cause every employer needs to understand the various exceptions to the rule. Using policies and procedures that establish the employer’s expectations and the procedure for disciplining employees when those expectations are not met will go a long way in the effort to minimize employment disputes.

Again, employment in Texas does operate under the at-will doctrine. However, this authority is not absolute, as Texas law adheres to strict exceptions that protect employees from terminations that violate public policy or statutory rights.

Despite the at-will status, employers cannot legally fire someone for discriminatory reasons, which is a major consequence for violating Texas and federal labor laws. Discrimination based on race, color, religion, sex, national origin, age, disability, or genetic information is illegal under the Texas Commission on Human Rights Act. Furthermore, employees are protected from retaliation if they file worker’s compensation claims, participate in jury duty, or refuse to engage in illegal acts on behalf of their employer.

Another critical exception in Texas involves the "Sabine Pilot" ruling, which allows an employee to sue for wrongful termination if they were fired for the sole reason of refusing to perform an illegal act. While many employers operate freely under the at-will doctrine, the legal consequences for violations, such as illegal discrimination or firing in retaliation for protected activities, can include back pay, reinstatement, and other damages. Therefore, understanding the boundaries is vital, as a "bad reason" for firing is still against the law, even in an at-will state.

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