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What Does California “At-Will” Employment Mean?

Man pointing to a button that says "maybe"  Is California an At-Will State?

According to the California Labor Code, California is an at-will employment state.  But what is this rule? And what does it mean for hourly or salaried employees?  You may be wondering if this means that you can be fired for any reason and whether you have any legal recourse for unfair dismissal.  Even though you are an “at-will”’ employee, you could be the victim of wrongful termination or workplace discrimination due to certain exceptions to the at-will rule.  

Read on to understand at-will employment in California and the labor and employment laws that protect your rights.

What Does AT Will Mean in California?

Simply, California at-will employment means that an employer can dismiss an employee with no prior warning and for any just reason. Likewise, in at-will employment states employees can also leave a company without reason or warning.

Under the California Labor Code: An employment, having no specified term, may be terminated at the will of either party on notice to the other. Employment for a specified term means an employment for a period greater than one month. CAL. LAB. CODE ‘ 2922 (2005) (first enacted 1937). Working in an “at-will” employment relationship does not mean employees have no legal rights or protections.  There are several exceptions to the “at-will” employment relationship that protects employees from being wrongfully terminated, or terminated for illegal reasons. This presumption of at-will employment may be overcome by (1) express agreement, (2) statutory exceptions, or (3) public policy.  

Exceptions to At-Will Employment

The exceptions address terminations that, although they technically comply with the at-will employment doctrine, California legislature or courts have determined are inherently unjust. These three exceptions are explained in greater detail below.

The three exceptions to at-will employment are:

  • Public Policy
  • Implied Contract
  • Covenant of Good Faith and Fair Dealing

Public Policy Exemption

In states that recognize this exemption, employees can’t be terminated if their reason for termination violates a well-established public policy. An example might be that an employee can’t be fired for filing a workers’ compensation claim because this is a documented public policy.  Similarly, it would be illegal to terminate an employee based on a protected class, like race, gender, disability, or age, under the California Fair Employment and Housing Act (FEHA). The FEHA provides protection from discrimination, retaliation, and harassment in all terms and conditions of employment based on all of the following protected categories:

  • Age (40 and over).
  • Ancestry.
  • Color.
  • Religious creed.
  • Denial of family and medical care leave.
  • Disability (mental and physical), including HIV and AIDS.
  • Marital status.
  • Medical condition (cancer and genetic characteristics).
  • Military and Veteran Status
  • Genetic information.
  • National origin.
  • Race.
  • Religion.
  • Sex (includes gender, pregnancy, childbirth, and medical conditions related to pregnancy or childbirth, breastfeeding or medical conditions related to breastfeeding).
  • Gender, gender identity and gender expression.
  • Sexual orientation.

The FEHA also prohibits retaliation against any person for making a complaint under the FEHA, for assisting another in making such a complaint or for opposing any action in the workplace that would constitute a violation of the FEHA.

Finally, terminating an employee for refusing to engage in an illegal activity requested by the employer would also fall within this exception.

Documents titled "contract agreement"Implied Contract Exception

Implied contracts can change the basis of at-will employment because employers cannot fire an employee when an implied contract is created between them. An implied contract is created based on the actions and statements of the employer and employee that reasonably leads the employee to believe that he cannot be fired at will. The oral or written representations are generally about job security and the procedures that will be followed if adverse actions (such as discipline or termination) will be taken against the employee. These representations can be contained in an employee manual, procedures, or handbook, or they may be expressed in other writings (such as emails) or orally.

Covenant of Good Faith and Fair Dealing

The implied covenant of good faith and fair dealing applies only where there is some sort of contract governing your employer’s ability to terminate you. (However, that can be an implied contract as discussed above).  The Covenant of Good Faith and Fair Dealing protects employees because it recognizes that employers cannot terminate an employee in order to avoid their duties, such as terminating you in order to keep you from enjoying benefits to which you would have otherwise been entitled under your employment agreement (like a pension or pay already earned).

What to Know About At-Will Employment

As with most laws, there are many caveats to employment relationships. The attorneys at Feldman Browne, APC are available to answer any further questions you may have about California at-will employment. Even in a state with at-will employment, employees are still entitled to rights when their job is terminated. Contact us today to speak with an employment law attorney in Los Angeles to learn more.