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David H. Schwartz Aug. 17, 2020

In California, all employment – with notable exceptions – is considered at-will. This means that either employer or employee can terminate the employment arrangement at any time for any or no reason at all. In other words, an employer can terminate an employee without cause or warning.

San Francisco Bay-area business litigation attorney David H. Schwartz, with 45 years of experience, is well-versed in all aspects of California employment law. He has the tools and resources to help you with your dispute. The Law Offices of David H. Schwartz, INC. represents clients in San Francisco and surrounding communities including San Jose, Santa Clara, San Mateo, Alameda County, and Oakland. Contact him today for a case assessment.

How Does California At-Will Employment Work?

The California Labor Code contains the presumption that all employment in the state is considered at-will work. This relieves the employer of having to prove “cause” in every employee termination. Cause in California law is defined as "a fair and honest cause or reason, regulated by good faith on the part of the employer." That definition – sans the at-will presumption — represents a high legal burden.

Employers will generally include an “at-will” provision in their job applications, employee handbooks, and employment acceptance documents, to reinforce the employment standard.

Most private-sector jobs in California, certainly those with hourly wages, are at-will.

What Are the Exceptions to At-Will Employment?

There are some exceptions to the at-will doctrine. Namely, when a written – or as we shall see later – an implied agreement or contract exists requiring “good” or “just” cause for termination, then the at-will assumption ceases. Such exceptions include:

  • Public-sector jobs with civil service protections

  • Collective bargaining agreements that have a “good cause” provision

  • Written employment contracts (often executive level) requiring “good cause”

  • Employers or managers who have abrogated the at-will provision by things they’ve said or done, creating an implied contract

An implied contract exists when, for instance, a manager continually promises secure, long-term employment. Also, a progressive disciplinary policy, which asserts that a series of warnings and disciplinary actions must be taken before termination, can be viewed as voiding the at-will assumption.

Another exception is based on public policy. When an employee refuses to carry out an act that violates public policy and is terminated, the at-will defense is void. The policy that the fired employee refuses to violate must:

  • Be outlined in law, constitutional provision, government regulation, or mandatory ethical rule

  • Benefit the public (as opposed to just an individual)

  • Be fundamental and substantial

  • Be well-established at the time when the employee was terminated

California is also one of 11 states that recognize a covenant of good faith exception to at-will employment. This doctrine requires that all employment agreements be based on good faith, which generally means that employees must be treated fairly. If, for instance, an employee is terminated shortly before he is eligible for retirement benefits, or an employee is terminated before a commission being paid, this can be seen as violating the covenant of good faith.

Can an At-Will Termination Ever Break the Law?

Even in a state with an at-will provision, a termination can be unlawful if it violates a variety of laws and protective provisions. In short, an employee cannot be terminated for illegal reasons, such as discrimination. Both federal and state statutes protect workers from being discriminated against based on their race, color, national origin, gender, religion, age, disability, pregnancy status, or genetic information.

An employee also cannot be terminated for purposes of retaliation. For example, an employee reports a safety violation to the Occupational Safety and Health Administration (OSHA) or a sexual harassment incident to the Equal Employment Opportunity Commission (EEOC), if the employer retaliates through termination of the employee, such retaliatory action against whistle-blowers is illegal.

Employers also cannot terminate employees who exercise their collective bargaining rights under the National Labor Relations Act (NLRA).  NLRA Section 7 allows for “protected, concerted activity” by employees seeking improved pay and working conditions.

How Legal Counsel Can Help

Just because California is an at-will state doesn’t mean employers are off the hook, so to speak, with even the simplest-seeming of terminations. As you can see above, exceptions abound, and costly legal challenges can ensue. Likewise, a terminated employee is not without available resources to fight the employer’s decision. For these reasons and more, seeking qualified legal counsel is the wisest course of action when a civil dispute over termination occurs.

Business litigation attorney David H. Schwartz has helped countless employers and employees in San Francisco, San Jose, Santa Clara, San Mateo, Alameda County, and Oakland for decades. He is a skilled strategist whose approach has resulted in precedent-setting decisions on both state and federal levels. Call him immediately for a consultation.