California is an "at will" state. This means employment without a specified term may be terminated by either party without cause.
However, there are broad exceptions to this general rule:
- An employee may not be terminated in violation of public policy;
- An employee may not be terminated without cause if the employer agreed in writing, verbally or by implication that the employee could be terminated only for cause;
- An employee may not be terminated in breach of the covenant of good faith and fair dealing.
Regarding the first category (violation of public policy), there are myriad public policies – both state and federal – that prohibit an employer from discriminating, demoting or terminating on that basis.
Some examples of protected activities, which cannot be the basis for termination, include:
- Whistle blowing activities (that is, disclosing an actual or reasonably perceived violation of law to law enforcement or government agency);
- Refusing to participate in unlawful conduct;
- Reporting or objecting to labor law or health and safety violations;
- Seeking unemployment insurance or workers' compensation;
- Requiring a polygraph test;
- Discriminating against employees who are the subject of wage garnishment.
For an employee to prove wrongful termination, the employee need not have been actually fired from the job. The court may view an employee as "constructively discharged" where the employer intentionally or knowingly created working conditions that are so intolerable that a reasonable person in the employee’s position would resign. A wrongful termination claim may also be based on wrongful discipline, demotions, or salary reductions.
A successful employee may be able to recover back wages, future wages, prejudgment interest, emotional distress damages, punitive damages and attorney's fees.
Employment Practices Liability Insurance often provides insurance coverage for claims of wrongful termination. For employers, it is important to review insurance policies to determine whether a claim possibly triggers insurance coverage. Other types of insurance may also provide coverage for wrongful termination claims.
The information you obtain on this site is not, nor is it intended to be, legal advice. You should consult an attorney for individual advice regarding your own situation.
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