Employment Law Questions? Ask an Employment Lawyer.
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Unfortunately, employment in the state of PA is "at will" absent an express agreement to the contrary. At will employment can be terminated for any reason not amounting to discrimination on the basis of a legally protected trait (race, religion, gender, etc.) or retaliation for engaging in certain forms of legally protected conduct (filing a wage claim, taking FMLA leave, etc.). It doesn't matter whether the basis for termination is fair, reasonable or even true.
Therefore, there would be nothing unlawful about terminating an employee based on the incident you describe, even though it was clearly an innocent hug and even though termination under such circumstances is completely unfair. The sole recourse of an employee in this circumstance is to attempt to persuade HR or upper management that termination was an overreaction, or to move on and collect unemployment benefits while looking for a new job.
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