Employers can’t fire employees for refusing to engage in criminal acts. But that doesn’t mean employees can proclaim “That’s illegal!” and expect to get away with what is really insubordination. You can fire such a worker—as long as you really weren’t ordering the employee to break the law.
Recent case: Joshua Calahan was a repo man for a bank, arranging the return of equipment that was collateral on business loans. On one job, a business owner cooperated by providing the key to the premises. But her business partner refused to cooperate.
Calahan consulted a police buddy, who allegedly told him that it would be criminal trespass to seize the equipment without the partner’s consent. Calahan then refused to follow through with the seizure and the bank fired him.
He sued, alleging he’d been fired for refusing to perform an illegal act.
The court disagreed. It said that the bank did have an owner’s permission to enter—and had the keys to prove it. That was enough to make the repossession legal. It ruled Calahan was insubordinate, and that the bank was within its right to fire him. (Calahan v. First State Bank, No. 07-10-00149, Court of Appeals of Texas, 7th District, 2012)
Final note: Before firing someone who refuses to participate in an allegedly illegal activity, double-check with your lawyer. That gives you additional backup for your contention the employee was merely insubordinate. Ask whether the employee may have any whistle-blowing claims, too.