California is an at-will employment state. This means that employers can terminate employees for any reason or no reason at all, as long as it is not illegal.
This does not mean that California employees do not have rights. There are situations in which the law considers termination wrongful even in an at-will state like California.
Discrimination and retaliation
The California Fair Employment and Housing Act stops employers from firing employees because of race, gender, religion, age, disability and sexual orientation. Additionally, employers cannot terminate an employee for asserting their rights under FEHA. The law considers retaliation for engaging in protected activities to be wrongful termination. According to the Equal Employment Opportunity Commission, there were 73,485 wrongful termination charges nationwide in 2022.
Breach of contract
Some employees have contracts that specify the terms of their employment. Employers cannot violate these contracts. This includes a responsibility to follow the contract’s specified termination procedures.
Violation of public policy
Employers cannot fire an employee for refusing to break the law or for reporting the employer’s illegal activities. California law also makes it illegal for employers to retaliate against such employees.
California’s whistleblower laws protect employees who report violations of state or federal laws. Terminating an employee for whistleblowing can lead to legal consequences for the employer.
Certain actions or statements by an employer can create an implied contract of continued employment. If an employee can prove that such a contract existed they may have a case for wrongful termination.
At-will employment does not mean employers have unlimited power to terminate employees at will. It is important for both employers and employees to be aware of their rights and responsibilities to ensure fair and lawful terminations in the workplace.