California At-Will Employment Laws

The at-will employment doctrine in California and other states refers to the authority of both employers and employees to terminate the working relationship "at will." Employers can discharge employees without cause or warning, and employees can walk away for any reason and without providing notice. Certain restrictions on at-will employment provide a measure of protection for California employees.

Basics

California's labor code allows either party to terminate employment whenever and for whatever reason they choose, unless the employment has a specified term. The termination of employment takes effect "on notice," meaning an employer can discharge an employee without providing a warning or following disciplinary procedures. The employee likewise can quit without giving advance notice, whether or not treatment by the employer has been fair.

Laws

California state and federal laws prevent at-will employment from applying in some situations. Any termination, or other adverse action related to the job, is illegal if based on an employee's race, color, sex, country of birth, religion, disability or age. In addition, employers may not terminate employees for joining labor unions and participating in union activities, or for rejecting an employer's order to perform an action that violates the law.

Policy

Court rulings in California provide several restrictions to at-will employment, giving employees potential grounds for lawsuits if their termination was not for cause. One precedent expands on the aforementioned statute that employers cannot terminate employees for refusing to break the law. While courts in most states have recognized this exception to at-will employment, California courts have interpreted the exception to encompass more general notions of civic duty and public good in addition to explicit laws.

Contracts

A contract can nullify at-will employment, at least in part, by establishing that job terminations must be for cause and can happen only after the employer follows specific procedures. At-will employment might not apply to union members, therefore, because a collective bargaining agreement usually governs the terms and conditions of their employment. California courts also view implied contracts, such as written and oral assurances from employers that terminations can happen only for cause, as a hedge on at-will employment even in the absence of a real contract.

Covenant

California courts are among those in a minority of states that have recognized the broadest exception to at-will employment: the notion of a covenant of fair dealing and good faith in all employment relationships. At its broadest application, this ruling means employers can terminate employees only for cause rather than for any reason that a court might view as malicious or arbitrary.

References

• Official California Legislative Information: Labor Code Section 2920-2929 - Termination
• California Governor's Office of Economic Development: Employee Rights
• California Governor's Office of Economic Development: At-Will Employment and Wrongful Termination
• U.S. Bureau of Labor Statistics; The Employment-at-Will Doctrine: Three Major Exceptions; Charles J. Muhl; January 2001
• San Francisco Employment Law Firm Blog; Defeating the At-Will Employment Presumption in California; Arkady Itkin; March 2009

Resources

• California Employment Law Information Network: Employment-at-Will Information Articles