If the employee was terminated due to his diabetes, and if that condition would be considered a "disability" in the employee's circumstances (which it may well be), then the employer committed disability-based discrimination and the employee may have a cause of action. On the other hand, nothing in the law says that a decision once made is irrevocable: for example, a company could legitimately fire someone to save costs, then have it's economic situation improve or land a big new account, etc., and have to hire someone for that position. It depends on the facts. From what you write, though, it would be worthwhile for the employee to meet with an employment law attorney (many will provide a free initial consultation) to evaluate his situation. Also, if he is over 40 and was replaced by younger employee, this may be a case of age-based discrimination, too.