Start Here: 5 Things You MUST Know
Employment-at-will is the default — either side can end employment at any time, unless a contract or law says otherwise
Polygraph tests are generally prohibited by the Employee Polygraph Protection Act (EPPA)
USERRA protects military employees — "escalator principle" means they return to the position they would have held
Wrongful discharge tort claims include: violation of public policy, emotional distress, defamation, invasion of privacy
Employers cannot fire an employee for a single wage garnishment (Consumer Credit Protection Act)
1. Employment-at-Will Doctrine
The Default Rule
Employment at will means an employer can fire an employee at any time, for any reason (or no reason at all), and the employee can quit at any time too. Think of it like a month-to-month apartment lease — either side can end it whenever they want.
Two Major Exceptions
A. Contract Claims
Wrongful discharge = being fired in violation of an employment contract (express or implied).
- Express contract: written or oral agreement
- Implied contract: arises from handbooks, policies, or verbal promises
B. Tort Claims (4 Types)
- Wrongful discharge — firing violates public policy (e.g., fired for filing workers' comp claim)
- Intentional infliction of emotional distress — firing conducted in outrageous manner
- Defamation — employer made false statements about employee
- Invasion of privacy — unreasonable intrusion into private affairs
Real-World Scenario: Employment-at-Will Contract Claim
The Setup: When Ed started at Plumbing Company 20 years ago, the owner told him, "If you're a good plumber, you can work for us as long as we're in business."
What Happens: Ed's boss fires him, saying "business has fallen off." Ed later learns they hired a younger plumber to replace him.
The Result: Ed MAY have a contract claim based on the owner's verbal promise. However, enforcing oral promises in employment-at-will states is very difficult. Courts rarely enforce vague employment promises when business necessity is cited.
2. Employee Privacy: Federal Statutes
Polygraph Tests (EPPA)
The Employee Polygraph Protection Act generally prohibits employers from requiring or using lie detector tests.
Narrow exceptions: Government employers, pharmaceutical companies, and security firms may use polygraphs in limited cases.
Drug & Alcohol Testing
The Drug-Free Workplace Act requires federal contractors to maintain drug-free workplaces. Employers can generally require drug testing, but rules vary by state.
Background Checks (FCRA)
The Fair Credit Reporting Act regulates employer use of background checks and credit reports. Employers must get employee consent before running background checks.
Health Information (HIPAA)
HIPAA protects the privacy of employee health information. Restricts how employers can use and disclose medical records. Requires safeguards for electronic health data.
Fourth Amendment Note
The Fourth Amendment protects against unreasonable government searches but does NOT apply to private employers. Private employer searches and surveillance are governed by state laws and common law tort claims, not the Constitution.
Real-World Scenario: Polygraph Prohibition
The Setup: An insurance company suspects an employee of embezzling claims payments.
What Happens: The company demands the employee take a lie detector test or be fired.
The Result: This likely violates the EPPA. Most private employers cannot require polygraph tests. The insurance company is not in one of the narrow exception categories (government, pharmaceutical, security). They must investigate through other means.
3. Common-Law Invasion of Privacy
Even without specific statutes, employees can sue for invasion of privacy under common law tort claims. These are judge-made rules developed through court cases.
Unreasonable Intrusion
Employer unreasonably intrudes into employee's private affairs — such as secretly recording personal calls or monitoring off-duty behavior.
Public Disclosure of Private Facts
Employer publicly reveals private information about an employee — such as sharing medical records with co-workers.
False Light
Placing someone in a false light in the public eye — such as implying an employee was fired for dishonesty when they were laid off due to budget cuts.
Unauthorized Use of Name/Likeness
Using an employee's name or image without consent — such as putting an employee's photo in company advertising without permission.
4. Military Service, Jury Duty & Wage Garnishment Protections
USERRA (Military Service Protection)
The Uniformed Services Employment and Reemployment Rights Act protects employees who leave for military service.
Escalator Principle
Employee returns to the position they would have held if they never left — including promotions
Health Insurance
Must be continued for up to 24 months during service (employee may pay up to 102% of premium)
No Discrimination
Cannot deny hiring, promotion, or benefits based on military service
Protected Period
Covers up to 5 cumulative years of military service with same employer
Real-World Scenario: USERRA Escalator Principle
The Setup: Sarah, a claims adjuster earning $65,000/year, is called up for a 12-month National Guard deployment.
What Happens: While she is gone, colleagues with similar qualifications are promoted. When Sarah returns, the employer offers her a lower position at $55,000, saying "your old role was eliminated."
The Result: Under USERRA, Sarah must be reemployed in the position she would have held had she not left — including any promotions. The employer cannot use deployment as an excuse to demote or underpay her.
Jury Service Protection
Federal and state laws prohibit employers from firing or penalizing employees for serving on a jury. This is a straightforward protection.
Wage Garnishment (Consumer Credit Protection Act)
Employer cannot fire an employee because of garnishment for any one debt. Maximum garnishment: 25% of disposable earnings or the amount exceeding 30x minimum wage, whichever is less.
Exception: Child support allows higher garnishment (50-65%). Protection is only for the first garnishment — multiple garnishments from different debts may not be protected.
Real-World Scenario: Wage Garnishment Protection
The Setup: Tom, an insurance underwriter, falls behind on credit card payments. A creditor gets a court judgment and garnishes Tom's wages.
What Happens: Tom's supervisor sees the garnishment notice and fires Tom, saying "We can't have employees with financial problems handling insurance policies."
The Result: The employer violated the Consumer Credit Protection Act. An employer CANNOT discharge an employee because of a single garnishment. Tom can be reinstated and recover lost wages. However, if Tom later gets a second garnishment from a different creditor, federal protection may not apply.
5. Whistleblower Protections & Public Policy Exceptions
The Public Policy Exception to At-Will Employment
Even in at-will states, an employer cannot fire an employee for reasons that violate public policy. This is the most important exception to employment-at-will.
What Employers CANNOT Fire You For
Filing a Workers' Comp Claim
If you are injured on the job and file for workers' compensation, your employer cannot retaliate by firing you.
Refusing to Commit a Crime
Your employer orders you to falsify records or lie under oath. You refuse. They fire you. This is wrongful discharge.
Reporting Safety Violations
Employees who report OSHA violations, environmental hazards, or other safety concerns are protected from retaliation.
Filing Discrimination Complaints
As covered in Part 1, retaliation for filing EEOC complaints is independently illegal under Title VII, ADA, and ADEA.
Real-World Scenario: Whistleblower Protection
The Setup: An insurance claims adjuster discovers that her company is systematically underpaying claims by using outdated repair cost databases.
What Happens: She reports the practice to the state insurance department. Her supervisor finds out and fires her for "performance issues."
The Result: This is wrongful discharge in violation of public policy. The adjuster was exercising her right to report illegal practices. The firing, disguised as a performance issue, is retaliation. She has both a wrongful discharge tort claim and potentially a statutory whistleblower claim.
6. Genetic Information Nondiscrimination Act (GINA)
GINA (enacted 2008) prohibits employers from discriminating based on genetic information, including family medical history. Employers cannot request, require, or purchase genetic information about employees or their family members.
Real-World Scenario: GINA Violation
The Setup: During a health screening, an employer's wellness program asks employees about their family history of cancer and heart disease.
What Happens: An employee with a family history of cancer is quietly passed over for a promotion.
The Result: The employer violated GINA in two ways: requesting family medical history and making an employment decision based on that information. Both the request and the adverse action are illegal.
Cheat Sheet
Print this page for quick referenceAt-Will & Wrongful Discharge
- At-will = default rule, fire/quit anytime
- Contract claims: express or implied
- 4 tort claims: wrongful discharge, emotional distress, defamation, invasion of privacy
- Public policy exception = strongest protection
Privacy Laws
- EPPA: polygraph tests generally prohibited
- FCRA: consent needed for background checks
- HIPAA: protects health information
- 4th Amendment does NOT apply to private employers
- GINA: no genetic info discrimination
Other Protections
- USERRA: military service, escalator principle
- Jury service: cannot fire for serving
- Garnishment: cannot fire for first garnishment
- Max garnishment: 25% of disposable earnings
- Child support: up to 50-65%
Exam Trap Alerts
1. Employment-at-Will Is the DEFAULT
Unless there is a contract, statute, or public policy exception, employers CAN fire at will. The exam will try to make you think otherwise.
2. Polygraph Tests Are Generally PROHIBITED
The EPPA bans most employer use of lie detectors. The exceptions are very narrow (government, pharma, security). If an exam question involves a regular employer demanding a polygraph, the answer is "illegal."
3. Fourth Amendment Only Applies to GOVERNMENT
The Fourth Amendment's protection against unreasonable searches does NOT apply to private employers. Private employer surveillance is governed by state laws and tort claims.
4. Garnishment Protection Is Only for the FIRST Debt
Federal law protects against firing for garnishment from one debt. Multiple garnishments from different creditors may not be protected (though some state laws are broader).
5. USERRA Escalator Principle
Returning military employees do not just get their old job back — they get the position they would have held if they never left, including promotions. This is a commonly tested concept.
Key Numbers to Memorize
5
Years max military service (USERRA)
24
Months health insurance (USERRA)
25%
Max wage garnishment (general)
50-65%
Max garnishment for child support
Quick Reference Summary
Employment-at-Will
Default rule. Exceptions: contract claims, tort claims, public policy, statutes.
EPPA (Polygraph)
Generally prohibits lie detector tests. Narrow exceptions for government/pharma/security.
HIPAA
Protects employee health information. Restricts use and disclosure.
USERRA
Military protection. Escalator principle. 5 years max. Health insurance 24 months.
Wage Garnishment
Cannot fire for first garnishment. 25% max general; 50-65% child support.
Whistleblower / Public Policy
Cannot fire for reporting violations, refusing crimes, or filing comp claims.