Can an employee be fired for refusing to do something illegal?

If your employer asks you to do something illegal and you refuse, and are then fired, what recourse do you have? Typically, an employee at-will can be fired at any time for any reason. However, the above question represents a narrow exception. An employee at-will cannot be fired for the sole reason that he refused to perform an illegal act. If the employee is fired only for refusing to do something illegal requested by his employer, the employee can sue the employer for wrongful discharge.

This exception encourages employees to follow the law and discourages employers from asking their employees to do illegal acts and from firing them when they refuse. In short, it promotes obeying the law and protects employees who are forced to face the difficult choice of performing an illegal act or possibly being fired.

For this exception to apply the employee must show that he was fired or otherwise adversely affected for the sole reason the he refused to perform an illegal act. First, the employee must have been fired or constructively discharged. Second, the refusal to perform the illegal act must be the sole and only reason for the firing. If there was any other motive for the employer in firing the employee, whether lawful or unlawful, the exception will not apply. For example, an employee who is fired because he refused to do something illegal and because of his age does not fall within this exception to employment at-will.

Third, the employee must have refused to commit the act, the act must have been illegal under criminal law, and the act must have been requested by the employer. So, an employee he agrees to commit the illegal act and is fired would not fall under the exception. Similarly, an employee who refuse to commit an act that is only a civil—not criminal—violation would not fall under the exception. Lastly, the employer must have actually requested the the employee do the illegal act. However, the employer does not have to explicitly state that the employee will be terminated if he refuses to do the illegal act.

For example, an employee cannot be fired for refusing to violate criminal environmental laws at the request of his employer. Similarly, if an employer requests that an employee sign falsified insurance forms or federal administrative forms and the employee refuses to do so and is then fired, the employee can sue for wrongful discharge. In both cases, the employer requested that the employee do an act illegal under criminal law, the employee refused to commit the act, and the refusal was the sole reason for the firing. These facts create an exception to employment at-will and limit the employer’s ability to fire.

On the other hand, an employee who is fired for only reporting an illegal act is not covered by this exception. Similarly, an employee who is only asked not to report a crime and is then fired for doing so is not covered by this exception. In both cases, the employee has not been asked by the employer to do an illegal act, and the employee has not been fired for refusing to do so.