Under California law, employment is “at-will.” An individual can be fired at any time, for no reason or for any reason. The only exception to this rule is that the reason must not be illegal. Many types of terminations are illegal. Two examples are terminations that are based on an employee’s race or act of reporting sexual harassment that occurred at the workplace.
The at-will presumption is stated in California Labor Code § 2922. This provision states, in part, “An employment, having no specified term, may be terminated at the will of either party on notice to the other.”
The presumption of at-will employment can be revoked by an agreement between the employer and the employee. Since at-will employment provides no security for either party, an agreement typically offers more security for one or both parties.
A secure employment agreement is a contract. As any contract, an agreement regarding employment must contain an offer and acceptance. The employer-employee relationship is continued until one of the parties violates a condition of the agreement.
A party usually accepts an agreement orally or in writing. This act creates an explicit contract. An employer can modify the agreement by explaining what behavior is allowed and what steps they will take before terminating an employee. They often do this in an employee handbook. If an employer does not abide by the policies of its handbook, an employee may sue for wrongful termination.
California law also recognizes the existence of an implied contract. An implied contract is created when an employee continues to act in a manner in accordance with the conditions for their continued employment. The landmark ruling regarding implied contracts is the 1981 decision in Pugh v. See’s Candies. In that case, a California appellate court held that an agreement could be “implied” by language in employee handbooks. This case involved a termination in which the employer did not follow the policies in its employee handbook.
Since Pugh, employers have worked to create employee handbooks and other literature that set guidelines for employees without eliminating the employer’s privilege to fire an employee at will.
In order to determine if your relationship is more than at-will employment, closely review the agreements and documents that form the basis for your employment contract. If your employer has not followed the course of action that they promised in your agreement, you may have a case for wrongful termination.