Can You Terminate an Employee for Off‑Duty Conduct in Texas?
August 5, 2025
Quick Article Summary:
- Texas employers can terminate employees for lawful reasons, including off‑duty conduct, under the state’s at‑will employment rules, as long as no statute or contract prohibits it.
- Denying unemployment benefits requires proving that the off‑duty conduct meets the definition of misconduct connected with the work under Texas Labor Code §201.012.
- Employers should follow consistent policies, document all actions, and conduct fair investigations before making termination decisions.
Texas At‑Will Employment and Its Legal Boundaries
Texas follows the at‑will employment doctrine, which means an employer can end an employment relationship at any time for any lawful reason—or no reason—unless restricted by a contract or statute. According to the Texas Workforce Commission’s guidance on at‑will employment, the main legal limits come from anti‑discrimination laws and the narrow public policy exception.
The Texas Labor Code Chapter 21 prohibits termination based on race, color, disability, religion, sex, national origin, or age. Federal protections under Title VII of the Civil Rights Act of 1964 also apply. Even if off‑duty conduct is controversial, termination cannot be motivated by a protected characteristic.
When Off‑Duty Conduct Can Impact the Workplace
Off‑duty behavior can become a workplace issue when it damages the company’s reputation, undermines safety, or erodes trust in the employee’s ability to perform their role.
Arrests and Criminal Charges
If an employee is arrested for a serious offense, employers should determine whether the alleged conduct affects the employee’s job. For example, a felony arrest might impact a role involving financial trust or client interactions. Before acting, employers should meet privately with the employee to hear their account, as recommended in the TWC’s termination checklist, and avoid relying solely on third‑party information.
Extremist or Reputationally Harmful Activity
Participation in extremist activity—such as publicly displaying hate symbols—can justify termination if it violates workplace conduct policies or harms the organization’s public standing. Employers should tie the decision to clear, written policy violations and document any impact on operations or employee relations.
Linking Off‑Duty Conduct to “Misconduct” in Unemployment Claims
Under Texas Labor Code §201.012, “misconduct” includes violations of company policy, disregard for the employer’s interest, or negligence that endangers others. Off‑duty conduct can be considered misconduct if:
- It violates a reasonable, known workplace policy,
- It directly affects the employee’s work duties or safety,
- Or it causes measurable harm to the employer’s business interests.
The TWC’s unemployment claim adjudication guidance stresses that employers must demonstrate a clear connection between the conduct and the job to disqualify benefits.
Investigating Off‑Duty Conduct
Steps for Employers Upon Learning of Arrests
- Confirm information discreetly—avoid contacting law enforcement or the employee’s attorney unless necessary for legal compliance.
- Meet with the employee privately, explain the concern, and allow them to respond.
- Evaluate job impact objectively, comparing the situation to how other employees in similar positions have been treated.
Handling Public or Reputational Incidents
When off‑duty actions become public—such as participation in controversial demonstrations—employers should:
- Review applicable company policies (code of conduct, social media policy).
- Document how the incident affects workplace operations or client relationships.
- Provide the employee an opportunity to respond before deciding on termination.
Avoiding Discrimination and Ensuring Consistency
The TWC’s fair employment guidance emphasizes that all similarly situated employees must be treated consistently. If one worker is terminated for certain off‑duty conduct, others engaging in similar conduct must face comparable consequences, regardless of their protected class status.
Employer Standards and Self‑Audit Questions
Before terminating for off‑duty conduct, Texas employers should ask:
- Is the termination reason lawful under Texas and federal anti‑discrimination laws?
- Does the conduct clearly violate an existing, communicated workplace policy?
- Has the conduct harmed operations, safety, or reputation in a measurable way?
- Has the employee been given a chance to explain?
- Would another employee in the same role receive the same treatment?
- Is there documentation of the incident, the investigation, and the decision?
If the answer to all is yes, the termination is more likely to withstand both wrongful termination and unemployment benefit challenges.
The Bottom Line for Texas Employers
Texas law gives employers broad authority to terminate for off‑duty conduct under at‑will employment. However, when that conduct becomes the basis for denying unemployment benefits, employers must show how it meets the definition of misconduct in Texas Labor Code §201.012 and is connected to the job. Clear documentation, consistent enforcement, and adherence to both TWC guidelines and federal protections are key to making lawful, defensible decisions.
