California’s at-will labor rules generally allow employers to terminate workers at any time. Likewise, at-will employees can usually leave their job without notice. However, several exceptions exist where lawsuits against an employer can result.
Violations that can lead to wrongful termination claims
State and federal labor laws protect at-will workers from being wrongfully terminated. Legal action can result if:
- A contract or verbal agreement between the employer and employee supersedes at-will employment
- Public policy violations occur, such as firing workers who ask for time off
- Discriminating against an employee based on their gender, race, sexual orientation, gender, religion, age and other protected statuses
- The employer commits fraud, such as claiming a worker was fired for poor performance issues when company records show only positive reviews
- A breach of good faith exists, such as firing someone to avoid paying health benefits, pensions or sales commissions
- The employer defames the worker by making untrue or malicious comments that hinder their ability to find future employment
- The worker is fired in retaliation for being a whistleblower or filing a discrimination or harassment complaint
Before taking action against a worker, you should understand the law, provide corroborating documentation for why they are being let go and then communicate those reasons to the employee.
Sound policies and practices reduce the risk of lawsuits
Employers’ best defense against wrongful termination claims is avoiding litigation altogether. Taking a few preventive steps can provide substantial protection. The first is clearly stating in your handbook and offer letters that employment is “at-will.”
Additionally, create a separate document for newly-hired employees titled “At-will acknowledgement” or something similar. It may contain a box they check off or initial to indicate they understand. Finally, be careful about what you say during job interviews. Don’t say you’ve “never fired anyone,” even though it’s true. This might be construed as an implied contract.
Working with an experienced business lawyer who understands complicated federal and California employment laws is advisable when establishing policies and practices related to at-will employment. The more time you spend now crafting comprehensive employee handbooks and sound hiring procedures, the less chance you’ll face legal challenges later.