Introduction

Wrongful termination laws protect employees from an arbitrary discharge of discriminatory nature or firing that breaches contractually determined employment. These laws can afford employees protections from disingenuous or unfair termination that is very beneficial given the “at-will” nature of employment in the United States. “At-will” employment allows termination of an employment relationship by the employer or employee for any reason, in contrast to termination with cause required in most other countries.¹ Although this affords employees more freedom, it also has the potential to leave them vulnerable to arbitrary firing. Wrongful termination laws prove protection and recourse to employees, who are generally the more vulnerable party in an employment relationship. This paper will contrast wrongful termination laws and litigation involving these laws in the United States and Italy. Both are developed countries with well-regulated employment practices but contrasting termination practices. This precursive investigation of the principles assessed against outcomes of legal actions taken with regards to employee dismissal will attempt to place the employment termination structure of the U.S in a more global context in order to evaluate its outcomes. The utility of this research lies within a focused comparison for which there is not much scholarly reference. There are many comparative analyses of this topic between the U.S and other developed countries including the United Kingdom, China, Japan, and Australia, but no focused comparison with Italy. Given that Italy is also one of the largest trading partners of the U.S but implements very different employment legislation provides an important opportunity for comparison². 

Overview of Legal Employment Termination Structures

Italy

Italian law requires just cause for termination employment. There are two broad categories outline for these causes: “just cause” and “justified reason”.³ Just cause is such reason that the “employment relationship cannot be continued even temporarily”.⁴ This involves more serious and clear reasons for dismissal. The justified reason is further delineated into two categories: subjective and objective reason. The objective reason involves economic difficulties requiring the company to fire the employee. Subjective reasons are less serious that just cause reasons and involve violation of contractual responsibilities by the employee. One notable difference between just cause and justified reason under Italian law is that the employer is required to give advance notice of employment termination in cases involving justified reason. There is a legal burden of proof on the employer to demonstrate that the termination was true, necessary, and the employee could not have been assigned a different position.³  The legal definition of unfair dismissal in Italy also involves “discrimination on grounds of race, religion, gender, trade union activity, etc” as well as providing protection in cases of “pregnancy, marriage, disease, injury, military service, trade union appointments, public appointments, etc”. ⁵ An employee has 60 days to contest a formal dismissal. ⁵

United States

The employment relationship in the United States is known as at-will employment. This means that an employee or employer can terminate the relationship without stating a cause. This relationship has different provisions implemented in different states, with some stricter than others. For instance, Alabama does not have a racial discrimination law with regard to employment termination. Federal law, specifically the civil rights act of 1964, outlaws discrimination based on race, color, religion, sex, or national origin” by employers.⁷ These are very similar to the laws in Italy regarding categories protected from employment and termination discrimination. United States law does include what is known as “implied protection” where a verbal contract of the term of employment is still valid and termination despite this is considered unlawful. This is in contrast to Italian labor laws that require written contracts for all employment relationships and terminations. This is thus more protective than Italian law.

Maximum Compensation

Italy

The Jobs Act was implemented in Italy in 2015. This labor market reform The largest value of monetary compensation legally allowed by Italy in cases involving wrongful termination is the equivalent of 24 months’ salary.⁴ For companies employing fewer than 15 employees, this value is decreased to 12 months’ salary. In cases of legally proven wrongful dismissal, the employee must be reinstated.⁶ This award is expected to encompass back wages that employees are owed.

United States

There is no maximum compensation defined for cases of wrongful termination in the United States. Unlike in Italy, back wages are an additional award to financial legal awards in cases of wrongful termination. There are many cases of million dollar award settlements in wrongful termination cases.

Notable Cases

Italy

An executive at an Italian company called BT Italia was awarded a 1.8 million euro settlement in a whistleblower case, despite being under investigation for criminal conduct in the company at the time⁸. Large monetary settlements are not very common as a maximum award is already defined in Italian labor law.

United States

The largest settlement awarded in a wrongful termination suit in the U.S was $185,872,719.52 in the Juarez v. AutoZone Stores, Inc. case. This involved discrimination on the basis of gender and pregnancy and the plaintiff was supposedly terminated for theft, although she was fired a month after giving a deposition in a lawsuit against the company for discriminatory practices.⁹ The damages awarded included money for emotional distress, which is an important aspect to consider with regard to employment. Awards for emotional damages are an important benefit of the American legal system with regards to wrongful termination. Another notable case is Ortiz v Chipotle in which the plaintiff alleged that she was fired for previous worker compensation filings. Chipotle claimed that she was being fired for theft, however as they had allegedly gotten rid of all evidence regarding the termination, the courts sided with the plaintiff and she received $8 million.¹⁰ In Adams v. George W. Cochran & Co, an employee was terminated for whistleblowing on his company’s unsafe practices. The plaintiff’s victory in the case supported the concept of not forcing employees to choose between employment and moral or personal beliefs. The employee also received lost wages. Return of lost wages is a significant benefit of wrongful dismissal cases as many people are not able to even meet basic needs without a continuous and regular income.

Conclusion

The legal provisions of Italian labor laws initially appear more protective than those present in the United States. Upon further evaluation, however, legal outcomes of wrongful termination litigation in the U.S appeared to be more generous and beneficial to employees involved in cases of wrongful dismissal. Given the importance of employment to an individual, the option for legal recourse takes on a role of legal protection. The damages awarded are significant for employees who were unfairly targeted and serve as a warning to employers who may attempt to do the same to others in the future. Such a rigid legal structure regarding employment termination as Italy has implemented is thus not the only or possibly even the best legal structure. Further state specific provisions support employees in the United States, and specific legal cases and their outcomes highly in favor of wrongfully dismissed employees are evidence of the generally strong position employees have in the U.S, which might not initially be evident when just preliminarily comparing the employee termination provisions between the U.S and Italy. This comparison places the U.S as a good place for employees with protections through wrongful termination laws globally, although other countries may have more stringent termination laws. Rigidly laid out wrongful termination laws may limit the return to employees in legal cases.

Autor: Aroma Naeem from Wayne State University