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At-Will Employment and Wrongful Termination

Losing your job is one of the most traumatic experiences in life, whether it is through termination, dismissal or downsizing. It takes a severe financial and emotional toll, but California law provides some protection. Wrongful termination is illegal if:

  • it is done for discriminatory reasons
  • it violates employment agreement or public policy
  • it is done out of retaliation because the employee exercised a legal right

 California is at at-will employment state, which typically means that either the employee or the employer can end the employment relationship with or without notice for any reason and at any time. However, at-will employment is much more complex than a mere excuse that makes way for wrongful termination. Rather, at-will means that the worker does not have a specific employment period and can therefore be terminated by the employer.

However, while counsel for employers use at-will employment as a buzzword all the time, employers may not terminate employees for unlawful reasons, as that is considered wrongful termination, which is illegal. Yet, some of the biggest employers in California - and around the world - regularly commit unlawful terminations on a regular basis. If you feel that you were wrongfully terminated, it is important to get in touch with an employment attorney who specializes in wrongful termination cases who can guide you through the process of filing a claim.

Most workers in California are at-will employees, although many employees in the public or government arena and those with implied, verbal and written contracts as well as those who belong to unions may claim that they are exempt to general at-will status. While this law seems to give employers carte blanche to hire and fire employees at-will, there is one major exception, namely wrongful termination.

You do not have to have a written, formal employment agreement for it to be legal. A permanent job posting creates an agreement, as can the disciplinary procedures outlined in the company's employee handbook. An employment agreement is implied when:

  • the employer makes an offer;
  • you accept the offer;
  • both you and the employer benefit from the agreement.

 As an employee in California, you may be concerned about the fact that your employer may dismiss you without good reason and this is technically a valid concern. However, you may also fall victim to workplace discrimination or wrongful termination due to certain exceptions that apply to the at-will employment rule.

At-will employment law also gives employees the right to quit their jobs, cease work, or strike at any time and for any reason without prior warning. If an employer dismisses an employee for just cause, it must also prove that the employee exhibited behavior that was serious enough to break the employment agreement. Just cause is applied when an employee's misconduct justifies immediate termination of the employment contract.

Some companies knowingly mislead workers to such an extent that it is considered fraudulent. For an employee to prove a valid fraud claim, he or she must show that:

  1. the employer made false representations regarding the job
  2. the employer was aware of the misrepresentations
  3. the employer intended to trick the employee into taking or staying in a job by offering those representations
  4. the employee relied on the truth of the representations, and were harmed by doing so.

Proving that an employer purposefully misld you can be difficult but proving the fraud can help you recover a variety of damages, including leaving your old job and moving closer to the new job.

What is Wrongful Termination in an At-Will Employment State?

Wrongful termination in common law includes: 

  • terminations that violate the implied fair dealing and good faith covenant;
  • terminations after an implied employment contract has been established;
  • terminations that violate California public policy;
  • terminations that violate local, state, or federal anti-discrimination laws.

Although your employer does not necessarily need a valid reason to dismiss you, some exceptions apply to the at-will rule. This includes the fact that your employer has to have a cause for firing you. Likewise, if you belong to a union, the agreement should lay out circumstances for dismissal. Always be sure to carefully examine: 

  • your employment contract
  • employee handbooks
  • and employer policies.

These documents should specify your rights under your employment agreement.

The exception dealing with the covenant of good faith is recognized in California, and is included in every employment relationship. It prohibits terminations and other employer personnel decisions motivated by malice or bad faith. The court will consider factors such as basic notions of fairness, the duration of employment, the company's adherence to personnel policies, prior performance criticisms, and whether job security representations exists to see whether a covenant of good faith is to be inferred.

Public policy contract exception applies when an employer wrongfully discharges an employee in violation of a well-established and explicit public policy in California. Such violations could include an employer terminating an employee: 

  • after he or she files a workers compensation claim after a workplace injury;
  • or, if the employee refuses to engage in illegal activities requested by the employer.

Implied contract exceptions apply when the employer forms an implied contract with an employee. This applies even in the absence of a written employment contract. Employers may make written or oral representations with regard to procedures and job security and this must be followed during disciplinary procedures. Such representations may form the basis for an employment contract, along with representations and contents of employee handbooks, which may create implied contracts, unless it contains a waiver that specifically rules out such rights. Most commonly, handbooks include a provision stating the employer's specific disciplinary and termination procedures.

Wrongful Termination of At-Will Employees in California

At-will workers in California are protected by federal employment law as well as the California Fair Employment and Housing Act (FEHA). As an at-will employee who is demoted or dismissed due to protected characteristics, your employer could be guilty of illegal workplace discrimination. Wrongful termination is frequently misunderstood. Termination is considered wrongful when an employer fires a worker for an impermissible or unlawful reason. You may have a case against your employer if you are terminated for one of the following reasons: 

  • age
  • race
  • political affiliation
  • national origin
  • religion and religious practices
  • criminal accusation or arrest
  • physical (ADA or FEHA) or mental disability
  • gender identity (such as transgender)
  • sexual orientation (bi-sexual or homosexual)
  • pregnancy
  • use of family or medical leave (CFRA or FMLA)
  • constructive termination (hostile working environment)

Additionally, employers may not dismiss employees in retaliation: 

  • for filing complaints about health and safety concerns;
  • for complaining about overtime or unpaid wages;
  • for reporting failure to provide rest breaks, meals or other Labor Code violations;
  • or in retaliation against workers in the healthcare fields who report patient safety concerns.

Finally, employers may not terminate employees in violation of public policy, which includes termination for: 

  • whistleblowing
  • serving in the military
  • taking time off work to vote
  • taking time off to fulfill jury duty.

California employment lawyers typically bring wrongful termination cases under the Fair Employment and Housing Act (FEHA). Retaliation cases are also quite common when employers report Labor Code and similar violations.

State and federal law may find your employer guilty of illegal termination if it broke its own contractual or policy agreements.

Wrongful Termination and Mixed Motives

Mixed motives are when an employer uses permissible as well as impermissible reasons to justify the termination of employment. Whenever an impermissible reason is used as a motivating factor in a firing decision, it is considered a wrongful termination. If any of the factors listed above were considered - even in part - as factors in the dismissal of the employee, the worker may have a valid reason to sue for damages if the reason is more than just a trivial or remote factor.

Employers tend to use pre-text for terminations, and they usually seem legitimate at face value. However, if an impermissible reason is even a little more than a mere trivial reason, it makes the employer liable.

Whistleblowing and Retaliation as Unlawful Termination Factors

The law typically also protects whistleblowers from retaliation. Someone who reports unsafe  or illegal working conditions to law enforcement or to government agencies (such as OSHA or the Labor Board) are considered whistleblowers. These individuals are protected by:

  • section 6310 of the Labor Code (complaints about unhealthy or unsafe working conditions);
  • section 1102.5 of the Labor Code (for individuals who complain about or refuse to participate in unlawful activities). This also covers those employees who complain about Labor Code violates, including improper classifications of employees as independent contractors, missed rest breaks or meals, and unpaid overtime.

In the last few decades, anti-retaliation laws have strengthened to afford whistleblowers more protection. It provides protection for employees who complain to supervisors, and not only complaints lodged with government agencies. However, in order to benefit from protection for retaliation, you must: 

  • have good reason to believe that the company is in violation of relevant laws;
  • act with good intentions by reporting such violation.

You may have to inform the company of the violation before reporting it to the authorities.

Constructive Termination of At-Will Employees

Most often, formal termination is required to support wrongful termination claims, but constructive termination may be considered an exception that supports a claim.

Constructive termination happens when work conditions become intolerable to the extent that it would be unreasonable for the employer to expect any employee to to continue working, and this situation forces him or her to resign. If an employee is forced to face intolerable harassment and the employer fails to put an end to it, the employee may not have any option other than to resign from his or her job.

Constructive termination is essential the same as involuntary termination or unfair dismissal, which may give rise to a wrongful termination claim.

Damages for Wrongful Termination

When a worker is wrongfully terminated, he or she may be entitled to both future and past lost benefits and wages and damages for emotional distress. In addition, you may be able to recover attorney fees and other legal costs. It is easy enough to accurately calculate economic losses, but emotional distress damages are governed by various other factors.

The court may rule that the employer owes punitive damages if their conduct was malicious, reprehensible or conducted in willful disregard of the employee's legal rights. Most often, cases are resolved before trial,  because employees are incentivized by the size of wrongful termination verdicts and settlements that are common in these cases. You may also be able to recover your position.

The California Supreme Court ruled that employees may not be held liable for any legal costs or fees to their employers, unless it is found that the case was found to be completely frivolous or without any merit. However, when the employee wins a FEHA-based case of wrongful termination, the employer will be held responsible for the attorney costs and fees of the employee.

Employees may seek mediation and arbitration to resolve the dispute with an impartial mediator who can help avoid going to court. This process is usually more time and cost-effective and the employee can recover the same damages.

If you feel that you have been wrongfully terminated, it is important to act fast, because statutes of limitations and time restrictions apply. You may well lose your right to compensation if you wait too long to file a suit. You can protect your legal rights by: 

  • requesting the reasons for your termination in writing
  • requesting a copy of all the documents in your employee personnel file
  • keeping a paper trail of all documents relating to your employment and subsequent termination.

Your employer may not force you to waive your right to sue them for wrongful termination, however with the great pressure that comes with wrongful termination, most courts may not enforce such a waiver. Request time to consider before you sign, and get in touch with an attorney. 

If you are older than forty years of age, you only have 21-45 days to consider early retirement. Be sure to speak to a lawyer before you make a decision.

Call California Sexual Harassment Law now at 800-905-1856 to schedule an initial consultation with a professional employment attorney who specializes in wrongful termination.

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