At-will employment means your employer can fire you for any reason (or no reason at all), as long as it’s not illegal. You, on the other hand, can quit your job whenever you want, without giving a reason or facing any penalty.
So, is California an at will employment state? The short answer is: generally, yes. That’s the default rule in California. However, there are several exceptions to this rule.
It’s important to understand these exceptions because they protect employee rights and ensure employers comply with the law. We’ll cover some of the exceptions to at-will employment, what constitutes an illegal reason for termination, and the rights of both employees and employers in California.
The core of at-will employment in California
California is generally considered an “at-will” employment state. This means that either the employer or the employee can end the working relationship at any time, for any reason (or no reason at all), and without notice.
California Labor Code Section 2922 puts the at-will employment doctrine into law.
However, it’s important to know that “at-will” employment isn’t a free-for-all. Employers cannot fire employees for illegal reasons. Many exceptions limit an employer’s right to terminate someone. The next section will cover these limitations in more detail.
Exceptions to at-will employment: Contractual limitations
Even though California is an at-will employment state, there are some exceptions. The main exceptions involve contracts that limit the at-will relationship.
Express contracts
An express employment contract is a written or verbal agreement specifying the terms of employment. If the agreement states how long the employment will last, or the conditions under which the employee’s job may be terminated, the at-will doctrine doesn’t apply.
An employment contract can override at-will status, so it’s important to review employment contracts carefully. Employees should understand their rights and responsibilities under the agreement. Employers, too, should make sure their contracts are clearly written and comply with California law.
Implied contracts
An implied contract is one that’s based on the employer’s actions, policies, or promises. For example, if the employer made verbal assurances about the employee’s continued employment, or the employee handbook or company policies state how employment terminations will be handled, that can create an implied contract that restricts at-will termination.
Courts consider things like the employee’s length of service, their positive performance reviews, and how consistently the employer has applied its company policies.
For example, if the manager tells the employee, “You’ll have a job here as long as you want one,” that could be interpreted as an implied contract.
Exceptions to At-Will Employment: Public Policy
Even though California is an at-will employment state, there are exceptions. One of the main exceptions is the public policy exception.
What is the public policy exception?
If your firing violates a fundamental public policy, it’s considered illegal. This means you can’t be fired as retaliation for claiming your rights, reporting illegal or unsafe situations, refusing to participate in illegal acts, or fulfilling your civic duties, such as showing up for jury duty.
Examples of public policy violations
- Whistleblowing: You can’t be fired for reporting illegal activities your employer may be undertaking. This protection extends to reporting violations of safety, health, or financial regulations.
- Refusing to participate in illegal activity: Your employer can’t fire you for refusing to commit an unlawful act, even if they ask you to do it.
- Exercising legal rights: You have the right to file a workers’ compensation claim, take legally protected leave (like family medical leave), or serve on a jury without fear of termination.
Key considerations
For the public policy exception to apply, the public policy must be clearly outlined in a statute, regulation, or constitutional provision. In addition, your actions as an employee must serve the public interest.
Illegal reasons for termination under at-will employment
Even in an at-will employment state like California, there are reasons you can’t legally be fired. It’s against the law for an employer to fire you for discriminatory or retaliatory reasons.
Discrimination
Federal and state laws prohibit employers from discriminating against employees based on what are called “protected characteristics.” This means an employer can’t fire you based on your race, religion, gender, age, disability, national origin, sexual orientation, or marital status.
Examples of discriminatory termination include firing someone because of their race or gender or firing an employee after they disclose a disability.
Retaliation
Employers also can’t retaliate against you for engaging in what’s called a “protected activity.” If you claim certain rights, report safety violations, refuse to participate in illegal acts, or fulfill a required court obligation, your employer can’t fire you for it.
Examples of retaliatory actions include firing someone for filing a complaint about discrimination or harassment or firing an employee after they report safety violations.
Violation of the implied covenant of good faith and fair dealing
California law requires both employers and employees to deal fairly with one another. Examples of violations of this covenant include firing someone just before their benefits vest or firing someone based on false pretenses.
Closing Thoughts
California is an at-will employment state, which means that, in most cases, employers can terminate employees for any reason that isn’t illegal. However, there are numerous exceptions to this rule. These exceptions can arise from implied contracts, public policy, or discrimination laws.
Because these laws can be complex, it’s essential for both employers and employees to seek legal advice. An attorney can help you understand your contract rights, protect your rights as an employee, and pursue legal remedies if you’ve been wrongfully terminated.
Whether you’re an employer who wants to make sure you’re in compliance with state and federal laws or an employee who believes they’ve been unfairly dismissed, talking with an employment attorney is a worthwhile step. Understanding at-will employment and its exceptions is key to a fair and equitable workplace for everyone.