Wrongful Demotion (Negative Employment Action)

Definition

The term wrongful demotion refers to an employer that has unfairly reduced the rank, or lowered the title, of an employee.   A demotion is normally accompanied by a loss in pay, a reduction in work hours, or a loss of fringe benefits.

Explanation

Also referred to as negative employment action, wrongful demotion occurs when an employer places an employee in a lower ranking position in the company.  The new position would have a less critical role in the organization as well as fewer responsibilities.  As such, the employee would also have some privileges revoked and their salary would be lowered too.

Unless the employee has a contract with their employer, they are said to be employed-at-will.  This means the employer can legally terminate or demote an employee without explanation.  However, if the employee feels the decision to demote was based on their age, disability, gender, national origin, or race; the employee may be able to bring about a wrongful discrimination lawsuit against their employer. Individuals that believe they are a victim of wrongful demotion should seek the counsel of an experienced employment attorney.

Executives typically have written contracts with their employers that may offer them protection against termination and demotion.  Employees may also be offered some protection through company policy. Once again, individuals that believe they are a victim of wrongful demotion should seek the counsel of an experienced employment attorney.

Related Terms

employment contract, implied employment contract, Loudermill Rights, age discrimination, Americans with Disabilities Act, applicant pool, Equal Employment Opportunity, wrongful termination