How to Terminate an Employee in California

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As California is an at-will employment state, you theoretically can fire anyone at any time for any reason. In practice, however, the law limits that power. California courts have ruled, for example, that if you fire someone for refusing to commit an illegal act, "at will" doesn't apply. If you want to protect yourself from a wrongful termination lawsuit, establish your termination policies well in advance.

Set Consistent Policies

  • Make it clear in every job announcement, interview and employee handbook that you're an at-will employer. Never imply or say that you won't fire someone if he does good work, or that his job is guaranteed. Follow your policies consistently. For example, if the company handbook says the employee is entitled to a warning notice and a chance to shape up before you fire him, send the notice. Document every problem, every discussion with the worker, and every notice you send. The paper trail can help prove your firing was justified.

Don't Discriminate

  • California is tougher on discrimination than the federal government. Federal anti-discrimination law applies to companies with 15 employees or more; in California, five workers is the cutoff. California protects all the categories federal law does, such as race, religion, pregnancy, gender and disability. The state adds several categories on top of that, forbidding employers to fire workers based on marital status, sexual orientation, political affiliation and military status, among other criteria.

Public Interest

  • California courts say you can't fire an employee for acts against the public interest, even if they're not technically illegal. For example, if you fire an employee for supporting a co-worker in a sexual harassment suit, the supportive employee may have grounds to sue. The case law defining "public interest" is quite technical, so consult a lawyer if you think it necessary.

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